Does Envista Holdings Corp. (NVST) have Opportunities to Drive Upside Over the Long Term?
Ariel Investments, an investment management company, released its “Ariel Fund” first-quarter 2024 investor letter. A copy of the same can be downloaded here. US equities exceeded expectations in the first quarter of 2024. The market was driven by optimism and strong market sentiment. The fund appreciated +6.41% in the quarter against this backdrop, outperforming the Russell 2500 Value Index’s +6.07% gain however, slightly trailing the Russell 2500 Index's +6.92% return. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Ariel Fund highlighted stocks like Envista Holdings Corporation (NYSE:NVST), in the first quarter 2024 investor letter. Envista Holdings Corporation (NYSE:NVST) manufactures and markets dental products. The one-month return of Envista Holdings Corporation (NYSE:NVST) was -0.54%, and its shares lost 41.99% of their value over the last 52 weeks. On June 6, 2024, Envista Holdings Corporation (NYSE:NVST) stock closed at $18.44 per share with a market capitalization of $3.169 billion.
Ariel Fund stated the following regarding Envista Holdings Corporation (NYSE:NVST) in its first quarter 2024 investor letter:
"Lastly, global dental manufacturing company, Envista Holdings Corporation (NYSE:NVST), declined on mixed earnings results and disappointing full year guidance implying a step-down in profitability. The company is navigating heightened investments, sanctions in Russia and pricing pressures in China due to volume-based procurement (VBP) reimbursement, as well as a weakening environment in North America for large dental equipment and implants. Meanwhile, NVST is in search of a new CEO and CFO creating another business distraction and further uncertainty. Shares are likely range bound for the next couple of quarters until a new leadership team is installed and NVST works through its challenges. We are deeply disappointed with this investment. After reassessing the name, we have concluded that the company has multiple opportunities to drive upside over the long-term. We believe NVST will benefit from its rich research and development pipeline, several new products in high-growth dental segments, facility consolidation and previous IT investments. At current levels, we believe the downside is priced in. We are now evaluating the upside return potential with shares trading at a significant discount to our estimate of private market value."
A close-up of a dental bracket and wires being fitted into a patient’s mouth.
Envista Holdings Corporation (NYSE:NVST) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held Envista Holdings Corporation (NYSE:NVST) at the end of the first quarter which was 33 in the previous quarter. While we acknowledge the potential of Envista Holdings Corporation (NYSE:NVST) 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 Envista Holdings Corporation (NYSE:NVST) and shared the list of best healthcare stocks to buy under $20. Ariel Small Cap Value Strategy commented about Envista Holdings Corporation (NYSE:NVST) in the previous quarter. The stock declined in the fourth quarter 2023 on weak earnings results. 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.