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Ariel Investments, an investment management company, released its “Ariel Focus Fund” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. Small cap issues fell in December due to uncertainty and slower Federal Reserve easing, but investors should focus on solid fundamentals as stock prices rise. In the fourth quarter, the fund declined -1.19%, compared to -1.98% return for the Russell 1000 Value Index and the +2.41% return for the S&P 500 Index. The fund increased +13.48%, over the trailing one-year period, compared to +14.37% and +25.02%, respectively, for the indexes. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Ariel Focus Fund emphasized stocks such as Resideo Technologies, Inc. (NYSE:REZI). 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 -12.12%, and its shares lost 13.90% of their value over the last 52 weeks. On February 28, 2025, Resideo Technologies, Inc. (NYSE:REZI) stock closed at $19.21 per share with a market capitalization of $2.841 billion.
Ariel Focus Fund stated the following regarding Resideo Technologies, Inc. (NYSE:REZI) in its Q4 2024 investor letter:
“Additionally, supplier of residential thermal, comfort and security solutions, Resideo Technologies, Inc. (NYSE:REZI) traded higher over the period. Despite a challenging macro environment, positive organic sales growth and structural cost efficiencies drove margin expansion. Encouraging commentary around improving consumer demand trends, new product offerings and cross-selling opportunities further aided share price appreciation. Also in the quarter, President and CEO, Jay Geldmacher, announced his intention to retire from his executive and board roles in 2025. Once a successor is identified, Mr. Geldmacher expects to become a senior advisor to the company to facilitate a smooth transition. In our view, this leadership change is indicative of the successful completion of the transformation plan the team initiated following the spin-out from Honeywell. We believe the company is entering a new phase of sustainable growth which will be driven by a secular preference for more connected smart home solutions and product innovation.”
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 30 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held Resideo Technologies, Inc. (NYSE:REZI) at the end of the fourth quarter compared to 33 in the third quarter. Resideo Technologies, Inc.'s (NYSE:REZI) total revenue grew 8% year-over-year in 2024 reaching around $6.8 billion. 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.