Soumya Eswaran
3 min read
In This Article:
The London Company, an investment management company, released “The London Company Mid Cap Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. After two years of robust earnings, US equities entered a correction territory in Q1. The portfolio declined 4.3% (-4.5%, net) during the quarter compared to a 3.4% decrease for the Russell Midcap Index. Sector exposure was a headwind to the strategy’s relative performance in the quarter. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its first-quarter 2025 investor letter, The London Company Mid Cap Strategy highlighted stocks such as Ally Financial Inc. (NYSE:ALLY). Ally Financial Inc. (NYSE:ALLY) is a digital financial company that offers various digital financial products and services. The one-month return of Ally Financial Inc. (NYSE:ALLY) was 13.36%, and its shares lost 10.13% of their value over the last 52 weeks. On May 13, 2025, Ally Financial Inc. (NYSE:ALLY) stock closed at $36.65 per share with a market capitalization of $11.26 billion.
The London Company Mid Cap Strategy stated the following regarding Ally Financial Inc. (NYSE:ALLY) in its Q1 2025 investor letter:
"Initiated: Ally Financial Inc. (NYSE:ALLY) - Largest digital-only bank in the U.S., best known for its strong position in auto lending. It focuses on prime borrowers, making its loan book higher quality than many competitors. With a new leadership team in place, ALLY is streamlining operations, cutting costs, and focusing on its most profitable areas. While current earnings are lower than normal, we believe the credit performance of ALLY's auto loan book should improve reflecting higher net interest margin and cost controls. As conditions normalize, ALLY could resume stock buybacks and deliver meaningful earnings growth. We see this as a compelling opportunity to invest in a quality business at à discount, with clear catalysts that could drive solid returns over the next few years."
Ally Financial Inc. (NYSE:ALLY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held Ally Financial Inc. (NYSE:ALLY) at the end of the fourth quarter which was 56 in the previous quarter. While we acknowledge the potential of Ally Financial Inc. (NYSE:ALLY) 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.
