Ariel Investments, an investment management company, released its “Ariel Global Fund” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. In 2024, global markets surpassed expectations, driven by U.S. tech companies and AI-themed stocks. However, Eurozone challenges, uncertainty over interest rates, and a strengthening U.S. dollar impacted MSCI ACWI and EAFE Indices. Against this backdrop, the Ariel Global fund traded -3.66% lower compared to the -0.99% return of its primary benchmark, the MSCI ACWI Index, and -4.71% return of its secondary benchmark, the MSCI ACWI Value Index. The fund returned +7.14% over the trailing one-year period compared to +17.49% and +10.76% returns for the indexes. Ariel follows a non-consensus approach to identify undervalued, out-of-favor franchises that are misunderstood and mispriced. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Ariel Global Fund emphasized stocks such as CenterPoint Energy, Inc. (NYSE:CNP). CenterPoint Energy, Inc. (NYSE:CNP) is a US based public utility holding company that operates in Electric and Natural Gas segments. The one-month return of CenterPoint Energy, Inc. (NYSE:CNP) was 7.53%, and its shares gained 23.95% of their value over the last 52 weeks. On March 3, 2025, CenterPoint Energy, Inc. (NYSE:CNP) stock closed at $34.57 per share with a market capitalization of $22.53 billion.
Ariel Global Fund stated the following regarding CenterPoint Energy, Inc. (NYSE:CNP) in its Q4 2024 investor letter:
“We purchased CenterPoint Energy, Inc. (NYSE:CNP) which is a utility company that owns and operates electric and natural gas transmission and distribution facilities primarily in Texas. Shares came under pressure following political pushback on CNP’s poor response and restoration efforts following Hurricane Beryl. The uncertainty ignited concerns around the company’s balance sheet health and regulatory risks. We view the sell off as an overreaction and believe CNP is at an inflection point where recent infrastructure upgrades and momentum around a potential divestiture of its mobile generation assets to another entity should improve CNP’s regulatory standing. We think the company has a strong growth profile underpinned by economic expansion in Texas and see this supporting long-term earnings growth. Furthermore, management’s execution of asset sales in 2025 should further stabilize the company’s balance sheet.”
A technician surveying a substation site, showing the large scale operations the company undertakes.
CenterPoint Energy, Inc. (NYSE:CNP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held CenterPoint Energy, Inc. (NYSE:CNP) at the end of the fourth quarter compared to 30 in the third quarter. While we acknowledge the potential of CenterPoint Energy, Inc. (NYSE:CNP) 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 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.