Aristotle Atlantic Partners, LLC, an investment advisor, released its “Core Equity Strategy” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the U.S. equity market reached a record high. Aristotle Atlantic’s Core Equity strategy returned 5.61% gross of fees (5.51% net of fees) in the quarter outperforming the S&P 500 Index’s 4.28% total return. The relative outperformance was due to security selection. Security selection in Information Technology and Health Care contributed the most to relative performance while Consumer Staples and Consumer Discretionary detracted. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Aristotle Atlantic Core Equity Strategy highlighted stocks like Microchip Technology Incorporated (NASDAQ:MCHP), in the second quarter 2024 investor letter. Microchip Technology Incorporated (NASDAQ:MCHP) manufactures and distributes smart, connected, and secure embedded control solutions. The one-month return of Microchip Technology Incorporated (NASDAQ:MCHP) was 4.45%, and its shares gained 2.51% of their value over the last 52 weeks. On July 22, 2024, Microchip Technology Incorporated (NASDAQ:MCHP) stock closed at $93.12 per share with a market capitalization of $49.959 billion.
Aristotle Atlantic Core Equity Strategy stated the following regarding Microchip Technology Incorporated (NASDAQ:MCHP) in its Q2 2024 investor letter:
“Microchip Technology Incorporated (NASDAQ:MCHP), manufactures and sells smart, connected and secure embedded control solutions used by its customers for a wide variety of applications. With over 30 years of technology leadership, Microchip’s broad product portfolio is a Total System Solution for its customers that can provide a large portion of the silicon requirements in their applications. Total System Solution is a combination of hardware, software and services that helps customers increase their revenue, reduce their costs and manage their risks compared to other solutions. Microchip’s synergistic product portfolio empowers disruptive growth trends, including 5G, data centers, sustainability, Internet of Things and edge computing, advanced driver assist systems and autonomous driving, and electric vehicles in key end markets such as automotive, aerospace and defense, communications, consumer appliances, data centers and computing, and industrial.
We believe Microchip’s Total System Solution will continue to support industry share gains and margin expansion as end-market demand for industrial and Internet of Things compute needs begins to recover off current lows. Management has accelerated the drawdown of high customer inventory levels by shutting down manufacturing facilities, and current industry data as well as commentary from peers indicates that overall end demand is seeing early signs of improvement. The company has a demonstrated track record of margin expansion, and we expect to see gross margins trough at the current level and, through internal efficiencies and pricing initiatives for its Total System Solution, expand and drive increasing operating margins and higher levels of free cash flow.”
A semiconductor wafer at various stages of fabrication, showing the company’s range of expertise.
Microchip Technology Incorporated (NASDAQ:MCHP) is not on our list of 31 Most Popular Stocks Among Hedge Funds. Microchip Technology Incorporated (NASDAQ:MCHP) was held by 35 hedge fund portfolios at the end of the first quarter, compared to 43 in the previous quarter, according to our database. In the March quarter, Microchip Technology Incorporated (NASDAQ:MCHP) reported $1.326 billion in net sales, down 24.9% sequentially. While we acknowledge the potential of Microchip Technology Incorporated (NASDAQ:MCHP) 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 Microchip Technology Incorporated (NASDAQ:MCHP) and shared the list of buzzing AI semiconductor stocks in 2024. In addition, please check out our hedge fund investor letters Q2 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.