Artisan Partners, an investment management company, released its “Artisan Mid Cap Value Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. In Q3, US stocks recovered from brief periods of volatility to hit new all-time highs. The portfolio returned strong absolute returns in the third quarter but lagged the benchmark. In the quarter, its Investor Class fund ARTQX returned 8.58%, Advisor Class fund APDQX posted a return of 8.63%, and Institutional Class fund APHQX returned 8.61%, compared to a 10.08% return for the Russell Midcap Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Artisan Mid Cap Value Fund highlighted stocks like NOV Inc. (NYSE:NOV) in the third quarter 2024 investor letter. NOV Inc. (NYSE:NOV) provides solutions for oil and gas drilling and production, and industrial and renewable energy sectors. The one-month return of NOV Inc. (NYSE:NOV) was 4.92%, and its shares lost 16.66% of their value over the last 52 weeks. On November 14, 2024, NOV Inc. (NYSE:NOV) stock closed at $16.21 per share with a market capitalization of $6.307 billion.
Artisan Mid Cap Value Fund stated the following regarding NOV Inc. (NYSE:NOV) in its Q3 2024 investor letter:
“Our next biggest detractor was NOV Inc. (NYSE:NOV), a provider of oilfield equipment, technology and expertise. NOV was down along with the broader energy sector on the sharp drop in oil prices. NOV is our sole energy holding. In the mid-cap segment, it’s more challenging to find higher quality businesses in a sector that also has above-average risk due to the volatility in underlying commodity prices. NOV has a moat around the rig technologies business, and unlike many energy-focused companies, it has a history of generating free cash flow and acceptable returns on tangible capital over the business cycle. Free cash flow, which bounced back in the latest quarter to $350 million, is helping to fund the company’s new capital return program. Executing on its capital return framework, which is designed to return 50% of free cash flow to shareholders, the company authorized $1 billion in share repurchases expected to be executed over 3 years and raised its quarterly dividend by 50%. Additionally, NOV reduced its net debt to $920 million from $1.3 billion. NOV’s valuation remains undemanding, in our view, and we believe margins still have room to rise as the cycle continues and cost savings opportunities are realized.”
An engineer inspecting a complete set of oil and gas components.
NOV Inc. (NYSE:NOV) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held NOV Inc. (NYSE:NOV) at the end of the second quarter which was 33 in the previous quarter. NOV Inc. (NYSE:NOV) generated revenues of $2.19 billion and a net income of $130 million or $0.33 per fully diluted share in the third quarter 2024. While we acknowledge the potential of NOV Inc. (NYSE:NOV) 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 NOV Inc. (NYSE:NOV) and shared the list of best falling 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.