Diamond Hill Capital, an investment management company, released its “Small Cap Fund” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. In Q4, markets rose unevenly, ending another positive year for markets. Stocks rose generally after the US election, but several lost most or all of their gains before the end of the year. Against this backdrop, the strategy outperformed the Russell 2000 Index in Q4 and for the full year. Relative strength in Q4 was concentrated among industrials holdings outperforming benchmark peers by a wide margin. Additionally, consumer staples and energy holdings also provided relative tailwinds. On the other hand, consumer discretionary holdings were the main cause of strategy’s relative weakness. Even though holdings were quite favorable on an absolute basis, underweight to the technology sector was another headwind in Q4. The strategy returned 0.93% in Q4 and 13.22% in 2024, compared to 0.33% and 11.54% return for Russell 2000 Index for the same periods. For more information on the fund’s top picks in 2024, please check its top five holdings.
In its fourth quarter 2024 investor letter, Diamond Hill Small Cap Fund emphasized stocks such as FTAI Infrastructure Inc. (NASDAQ:FIP). Headquartered in New York, New York, FTAI Infrastructure Inc. (NASDAQ:FIP) acquires, develops, and operates assets and businesses that represent infrastructure for customers in the transportation and energy industries. One-month return of FTAI Infrastructure Inc. (NASDAQ:FIP) was -13.27%, and its shares gained 50.22% of their value over the last 52 weeks. On February 12, 2025, FTAI Infrastructure Inc. (NASDAQ:FIP) stock closed at $6.73 per share with a market capitalization of $765.504 million.
Diamond Hill Small Cap Fund stated the following regarding FTAI Infrastructure Inc. (NASDAQ:FIP) in its Q4 2024 investor letter:
“As valuations have continued rising and the economic cycle has gotten relatively long in the tooth, it’s become increasingly challenging to find high-quality, small-cap companies trading at attractive discounts to their intrinsic values. However, given the neglected pool of opportunities and our lunch pail mentality, the quarter yielded several new positions to the portfolio, including FTAI Infrastructure Inc. (NASDAQ:FIP), Mesa Laboratories, Cimpress and Curbline Properties.
FTAI Infrastructure owns scarce, critical infrastructure assets, including several short-line freight railroads servicing certain manufacturing and production facilities, a strategic multi-modal energy terminal in Beaumont, TX, a Delaware River deep-water port with natural gas capabilities and a hydrogen-capable power terminal on the Ohio River. These assets are well-positioned to benefit from long-term trends around the energy transition, increased global trade and demand for efficient logistics infrastructure.”
Aerial view of a deep-water port, with cargo ships coming and going.
FTAI Infrastructure Inc. (NASDAQ:FIP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held FTAI Infrastructure Inc. (NASDAQ:FIP) at the end of the third quarter which was 22 in the previous quarter. While we acknowledge the potential of FTAI Infrastructure Inc. (NASDAQ:FIP) 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 FTAI Infrastructure Inc. (NASDAQ:FIP) and shared the list of best conglomerate 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.