Diamond Hill Capital, an investment management company, released its “Mid Cap Strategy” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. Q4 witnessed an uneven increase in markets, capping off yet another positive year for the markets. In general, equities rose after the US election, but some gave up most or all of those gains by the end of the year. The portfolio trailed the Russell Midcap Index in Q4 and for the full year. The strategy returned -2.18% (gross) and -2.35% (net) in the quarter compared to 0.62% for the index. For the full year, the strategy returned 11.39% (gross) and 10.61% (net) compared to 15.34% return for the index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Diamond Hill Mid Cap Strategy emphasized stocks such as Solventum Corporation (NYSE:SOLV). Solventum Corporation (NYSE:SOLV) is a healthcare company. The one-month return of Solventum Corporation (NYSE:SOLV) was 1.09%, and YTD its shares gained 13.76% of their value. On March 17, 2025, Solventum Corporation (NYSE:SOLV) stock closed at $75.15 per share with a market capitalization of $13 billion.
Diamond Hill Mid Cap Strategy stated the following regarding Solventum Corporation (NYSE:SOLV) in its Q4 2024 investor letter:
“As valuations have continued rising and the economic cycle has gotten relatively long in the tooth, we’ve thought carefully about where and how we are exposed to more cyclical stocks. As such, we initiated a number of new positions in Q4, including ICON, Informatica, Teledyne Technologies, LPL Financial Holdings, Teleflex Incorporated and Solventum Corporation (NYSE:SOLV).
Solventum, formerly 3M’s health care business, was spun out to shareholders in 2024. It provides a portfolio of solutions to address critical patient needs. The company has been challenged by years of underinvestment and market-share losses. However, the new management team is focused on driving revenue growth in line with peers’ — which we think is likelier as a standalone company. We also expect Solventum to optimize research and development to improve its sales mix and include new products.”
A healthcare professional wearing a health communications device discussing patient data with a colleague.
Solventum Corporation (NYSE:SOLV) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held Solventum Corporation (NYSE:SOLV) at the end of the fourth quarter compared to 48 in the third quarter. In the fourth quarter Solventum Corporation (NYSE:SOLV) generated $2.1 billion in sales, up 2.3% year-over-year on an organic basis. While we acknowledge the potential of Solventum Corporation (NYSE:SOLV) 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 Solventum Corporation (NYSE:SOLV) and shared the list of top health information services stocks outpacing the market in 2025. In addition, please check out our hedge fund investor letters Q4 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.