Artisan Partners, an investment management company, released its “Artisan Value Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. US stocks recovered from brief periods of volatility to hit fresh all-time highs in Q3 due to incoming economic data supporting a soft landing, US inflation continuing to slow, and positive underlying profit growth. Against this backdrop, the portfolio generated a solid absolute return but trailed the Russell 1000® Value Index. Due to the absence of real estate and utility holdings, the switch to bond proxies was a performance headwind. The fund’s Investor Class ARTLX, Advisor Class APDLX, and Institutional Class APHLX returned 6.65%, 6.69%, and 6.69% respectively, in the third quarter compared to a 9.43% return for the Russell 1000 Value Index. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2024.
Artisan Value Fund highlighted stocks like United Parcel Service, Inc. (NYSE:UPS), in the third quarter 2024 investor letter. United Parcel Service, Inc. (NYSE:UPS) is a package delivery company, with a market capitalization of $114.078 billion. The one-month return of United Parcel Service, Inc. (NYSE:UPS) was -1.28%, and its shares lost 9.01% of their value over the last 52 weeks. On November 13, 2024, United Parcel Service, Inc. (NYSE:UPS) stock closed at $133.68 per share.
Artisan Value Fund stated the following regarding United Parcel Service, Inc. (NYSE:UPS) in its Q3 2024 investor letter:
“We made no new purchases in Q3. Instead, our purchase activity was focused on adding to a few of our existing names that remain cheap, such as Dollar General and United Parcel Service, Inc. (NYSE:UPS). When we initiated our position in UPS in late 2023, shares were under pressure due to concerns about its new labor contract diverting volumes and driving up costs, as well as the continued normalization of volumes following COVID-related gains. We welcomed the market’s short-term focus as it provided us an opportunity to purchase UPS at an undemanding valuation of less than 11X our view of normalized earnings. UPS is a good transport operation that easily earns its cost of capital, generates significant free cash, has a wide economic moat, has a strong financial profile and pays an attractive dividend—now yielding 4.8%. More recently, the stock has been weak because profits came in weaker than expected. UPS’ customers traded down to the lower yielding ground segment, which negatively impacted overall pricing and margins. These shifts are common and occur in both directions, but what is important, in our view, is the long-term trend of volume growth remains intact. Nevertheless, investors have lost patience with UPS after a string of earnings disappointments.”
A warehouse filled with boxes of parcels, symbolizing the companies reliable logistics services.
United Parcel Service, Inc. (NYSE:UPS) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 44 hedge fund portfolios held United Parcel Service, Inc. (NYSE:UPS) at the end of the second quarter which was 43 in the previous quarter. United Parcel Service, Inc.’s (NYSE:UPS) consolidated revenue was $22.2 billion in the third quarter, up 5.6% from Q3 2023 and consolidated operating profit was $2 billion, up 22.8% from last year. While we acknowledge the potential of United Parcel Service, Inc. (NYSE:UPS) 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 United Parcel Service, Inc. (NYSE:UPS) and shared the list of best delivery stocks to invest in. 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.