Longleaf Partners, managed by Southeastern Asset Management, released its “Partners Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund returned 10.42% in the third quarter, compared to the S&P 500’s 5.89% return and Russell 1000 Value’s 9.43% return. In the quarter, there were very few detractors, and more than half of the portfolio holdings generated double-digit returns. The market is starting to see the value in many of the companies that the firm highlighted in the first two letters this year, which is positive. For more information on the fund’s best picks in 2024, please check its top five holdings.
Longleaf Partners Fund highlighted stocks like Kellanova (NYSE:K), in the third quarter 2024 investor letter. Kellanova (NYSE:K) engages in the manufacturing and marketing of snacks and convenience foods. The one-month return of Kellanova (NYSE:K) was 0.47%, and its shares gained 59.27% of their value over the last 52 weeks. On October 23, 2024, Kellanova (NYSE:K) stock closed at $80.96 per share with a market capitalization of $27.925 billion.
Longleaf Partners Fund stated the following regarding Kellanova (NYSE:K) in its Q3 2024 investor letter:
Kellanova (NYSE:K) – Packaged food company Kellanova was the top contributor for the quarter. The company is being purchased by Mars at a slight premium to our appraisal. This outcome was one of multiple potential paths to value recognition when we first invested. The company’s portfolio of strong brands had been undervalued by the market, but the spin-off of its less attractive cereal business allowed the snacks division to showcase its strengths. While we would have liked to own it longer, the company delivered strong results this year and ultimately attracted Mars, who offered a full and fair price. We exited our position on this price strength during the quarter.
A stack of grocery bags filled with ready-to-eat cereals, frozen waffles, and savory snacks.
Kellanova (NYSE:K) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held Kellanova (NYSE:K) at the end of the second quarter which was 37 in the previous quarter. While we acknowledge the potential of Kellanova (NYSE:K) 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.