Loomis Sayles, an investment management company, released its “International Growth Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund returned 13.10% vs. 8.06% for the MSCI ACWI Ex USA Index (Net) in the quarter. Stock selection in consumer discretionary, information technology, financials, consumer staples, and communication services sector, as well as allocation s to the consumer discretionary and consumer staples sectors, all positively impacted the fund’s relative performance. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Loomis Sayles International Growth Fund highlighted stocks like Arm Holdings plc (NASDAQ:ARM) in the third quarter 2024 investor letter. Headquartered in Cambridge, the United Kingdom, Arm Holdings plc (NASDAQ:ARM) provides semiconductor technology. On December 26, 2024, Arm Holdings plc (NASDAQ:ARM) stock closed at $129.69 per share. One-month return of Arm Holdings plc (NASDAQ:ARM) was -3.43%, and YTD its shares gained 72.59% of their value. Arm Holdings plc (NASDAQ:ARM) has a market capitalization of $136.304 billion.
Loomis Sayles International Growth Fund stated the following regarding Arm Holdings plc (NASDAQ:ARM) in its Q3 2024 investor letter:
“Arm Holdings plc (NASDAQ:ARM) is the world’s leading microprocessor intellectual property (IP) supplier. The company develops and licenses its microprocessor IP technology to a network of partners to facilitate the design and manufacture of semiconductor chips used in a wide range of end markets, with a primary focus on mobile, cloud, automotive, and IoT (internet of things). Arm’s clients include most of the world’s leading semiconductor companies, which pay licensing fees to utilize the company’s industry-standard technologies and ongoing royalties for the resulting chips incorporating its technology. While it can take in excess of five years before newly licensed technology is commercialized into new products, the resulting royalty payments to Arm can span decades. We owned Arm in our large cap and all cap growth portfolios from 2012 until it was acquired by SoftBank Group in 2016. Under SoftBank, the company invested substantially in research and development (R&D) and accelerated its pace of innovation. As a result, Arm launched Armv9, its most advanced processor architecture, and its NeoVerse microarchitecture that now enables the company to effectively compete in the data center business.
A holding since the company’s September 2023 initial public offering (IPO) in which SoftBank spun-off a minority interest in the company, Arm reported record quarterly financial results that were in-line with consensus expectations. Shares may have responded negatively to guidance for lower-than-expected royalty revenues for the current quarter and fiscal year, which it attributed to weaker-than-expected unit growth among industrial and IoT clients. While the company is seeing weaker-than-expected unit growth, it is seeing faster-than-expected incorporation of its higher-royalty technology as companies look to monetize AI, and Arm offers the only available design tool allowing for customization…” (Click here to read the full text)
A technician focused on a complex semiconductor chip in their lab.
Arm Holdings plc (NASDAQ:ARM) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held Arm Holdings plc (NASDAQ:ARM) at the end of the third quarter which was 38 in the previous quarter. While we acknowledge the potential of Arm Holdings plc (NASDAQ:ARM) 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 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.