Ariel Investments, an investment management company, released its “Ariel Focus Fund” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the first quarter, the fund increased +7.45% and fell short of an +8.99% return for the Russell 1000 Value Index and a +10.56% return for the S&P 500 Index. Investor enthusiasm around artificial intelligence (AI), resilient corporate earnings growth, falling inflation, and expectations for interest rate cuts this year led the US indices to outperform in the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Ariel Focus Fund highlighted stocks like Resideo Technologies, Inc. (NYSE:REZI), in the first quarter 2024 investor letter. Resideo Technologies, Inc. (NYSE:REZI) develops, manufactures, and sells comfort, energy management, and safety and security solutions. The one-month return of Resideo Technologies, Inc. (NYSE:REZI) was -9.85%, and its shares gained 14.41% of their value over the last 52 weeks. On June 11, 2024, Resideo Technologies, Inc. (NYSE:REZI) stock closed at $19.85 per share with a market capitalization of $2.898 billion.
Ariel Focus Fund stated the following regarding Resideo Technologies, Inc. (NYSE:REZI) in its first quarter 2024 investor letter:
Additionally, supplier of residential thermal, comfort and security solutions, Resideo Technologies, Inc. (NYSE:REZI) advanced following a top- and bottom-line quarterly earnings beat. Despite a challenging macro environment and slower turnover in the housing market, stabilizing order rates and gross margin expansion aided share price appreciation. Additionally, management continues to return capital to shareholders through buybacks. In our view, the company’s best-in-class brand and vast distribution network create a narrow moat around the business resulting in high market share across its product portfolio. We believe REZI’s earnings potential is underappreciated and will be driven by a secular preference for more connected smart home solutions.
A security specialist installing a home security panel, showing the safety and security the company provides.
Resideo Technologies, Inc. (NYSE:REZI) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held Resideo Technologies, Inc. (NYSE:REZI) at the end of the first quarter which was 26 in the previous quarter. The first quarter revenue of Resideo Technologies, Inc. (NYSE:REZI) was $1.49 billion, a 4% decrease from Q1 2023. While we acknowledge the potential of Resideo Technologies, Inc. (NYSE:REZI) 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 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.