Ariel Investments, an investment management company, released its “Ariel Global Fund” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the first quarter, the Ariel Global fund appreciated +7.35% lagging behind the +8.20% gain of its primary benchmark, the MSCI ACWI Index, but ahead of the +6.85% return of its secondary benchmark, the MSCI ACWI Value Index. The upward rally of developed markets continued in the first quarter of 2024. The rally was driven by investors’ excitement over artificial intelligence (AI), a rebound in bank lending growth, decreased energy costs, a rise in global manufacturing activity, recent structural reforms in Japan, and the near-term possibility of a rate-cutting cycle in the U.S. and Europe. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Ariel Global Fund highlighted stocks like Capital One Financial Corporation (NYSE:COF), in the first quarter 2024 investor letter. Capital One Financial Corporation (NYSE:COF) is a financial services holding company for the Capital One, National Association. The one-month return of Capital One Financial Corporation (NYSE:COF) was -5.72%, and its shares gained 21.47% of their value over the last 52 weeks. On June 14, 2024, Capital One Financial Corporation (NYSE:COF) stock closed at $133.70 per share with a market capitalization of $51.063 billion.
Ariel Global Fund stated the following regarding Capital One Financial Corporation (NYSE:COF) in its first quarter 2024 investor letter:
“We also added global financial services company, Capital One Financial Corporation (NYSE:COF). The company is the largest online consumer and commercial bank with a leading position in general purpose and small business credit cards. We view the company as competitively advantaged particularly due to their investment in technology. According to recent reports, COF is also rated as one of the leading banks within Artificial Intelligence (AI). Notably, the company recently announced an acquisition of Discover Financial Services (DFS) which we believe would produce significant long-term earnings accretion. COF will be able to leverage DFS’ proprietary payments network, enabling direct interaction with merchants and consumers. This closed loop dynamic should lead to higher volumes of credit card conversions presenting further upside for its shares. At current levels, we view the long-term outlook to be attractive, given favorable business trends, stabilizing delinquency rates within the credit card industry, synergies from the DFS acquisition and COF’s enhanced focus on technology.”
A smiling face of a customer as they make a deposit at this company’s branch.
Capital One Financial Corporation (NYSE:COF) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held Capital One Financial Corporation (NYSE:COF) at the end of the first quarter which was 51 in the previous quarter. Capital One Financial Corporation (NYSE:COF) reported $1.3 billion or $3.13 per diluted common share in the first quarter. While we acknowledge the potential of Capital One Financial Corporation (NYSE:COF) 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 Capital One Financial Corporation (NYSE:COF) and shared the list of largest publicly traded financial companies in the US. In addition, please check out our hedge fund investor letters Q1 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.
