Madison Investments, an investment advisor, released its “Madison Mid Cap Fund” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund (Class Y) returned 7.17% compared to the 9.21% increase for the Russell Midcap Index. The Fund returned 12.44%, in the year-to-date nine months, compared to 14.63% for the index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Madison Mid Cap Fund highlighted stocks like Lithia Motors, Inc. (NYSE:LAD) in the third quarter 2024 investor letter. Lithia Motors, Inc. (NYSE:LAD) is a global automotive retailer that operates in Vehicle Operations and Financing Operations segments. The one-month return of Lithia Motors, Inc. (NYSE:LAD) was 4.07%, and its shares gained 20.54% of their value over the last 52 weeks. On October 17, 2024, Lithia Motors, Inc. (NYSE:LAD) stock closed at $315.37 per share with a market capitalization of $8.336 billion.
Madison Mid Cap Fund stated the following regarding Lithia Motors, Inc. (NYSE:LAD) in its Q3 2024 investor letter:
“During the quarter we added three new holdings: Graco, Lithia Motors, Inc. (NYSE:LAD), and Asbury Automotive. We purchased shares in Lithia Motors and Asbury Automotive, two of the largest auto franchise dealer groups in the country, owning a diversified portfolio of dealerships ranging from Toyota to Ford to Mercedes. Investors tend to pay a lot of attention to the level of new car sales, but dealers actually earn more in profits from parts and service than they do from selling new cars, and this steady business provides a nice ballast throughout the economic cycle. In addition, we believe these businesses have a long runway to create value via consolidation of this fragmented industry, as the advantages of scale are increasing.”
A customer in a store, examining a new vehicle on the showroom floor.
Lithia Motors, Inc. (NYSE:LAD) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held Lithia Motors, Inc. (NYSE:LAD) at the end of the second quarter which was 39 in the previous quarter. In the second quarter of 2024, Lithia Motors, Inc. (NYSE:LAD) reported $9.2 billion in sales, up 14% year-over-year. While we acknowledge the potential of Lithia Motors, Inc. (NYSE:LAD) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Lithia Motors, Inc. (NYSE:LAD) and shared the list of best used car stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.