River Road Asset Management, an investment management company released its “River Road Small Cap Value Fund” Q4 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, AMG River Road Small Cap Value Fund (Class N) returned 7.35% compared to -1.06% returns for the Russell 2000® Value Index. For the year 2024, the fund returned 14.07%, significantly outperforming Index return of 8.06%. Stocks rallied in November after a Republican victory but declined sharply following hawkish Fed comments. Shorter duration stocks, including small caps and value, lost most of their post-election gains by the end of December. Small caps lagged their large counter parts for eight consecutive years. For more information on the fund’s best picks in 2024, please check its top five holdings.

In its fourth quarter 2024 investor letter, River Road Small Cap Value Fund emphasized stocks such as Air Transport Services Group, Inc. (NASDAQ:ATSG). Air Transport Services Group, Inc. (NASDAQ:ATSG) offers aircraft leasing, and air cargo transportation services. The one-month return of Air Transport Services Group, Inc. (NASDAQ:ATSG) was 0.54%, and its shares gained 68.47% of their value over the last 52 weeks. On March 28, 2025, Air Transport Services Group, Inc. (NASDAQ:ATSG) stock closed at $22.43 per share with a market capitalization of $1.479 billion.

River Road Small Cap Value Fund stated the following regarding Air Transport Services Group, Inc. (NASDAQ:ATSG) in its Q4 2024 investor letter:

"Another positive contributor was Air Transport Services Group, Inc. (NASDAQ:ATSG), the premier lessor of Boeing 767 freighter aircraft essential to support e-commerce. On November 4, ATSG rallied 26% after agreeing to a takeover bid from the private equity infrastructure firm Stonepeak at $22.50 per share, representing only 87% of our $26 assessed value. In hindsight, we believe our assessed value did not properly handicap the wide range of potential outcomes after the company made the ill-fated decision in 2023 to significantly expand its fleet and increase financial leverage without signed customer contracts. However, by mid-year 2024, ATSG had stabilized its fleet and inflected to attractive positive free cash flow. Our thesis on ATSG hinged on secular demand for its fleet capabilities and a pivot to free cash flow, thus we believe private equity is likely making a well-timed acquisition of ATSG. After the conclusion of the go-shop period with no superior offers, we exited ATSG for better risk/reward opportunities shortly after quarter-end."

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Air Transport Services Group, Inc. (NASDAQ:ATSG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held Air Transport Services Group, Inc. (NASDAQ:ATSG) at the end of the fourth quarter compared to 16 in the third quarter. While we acknowledge the potential of Air Transport Services Group, Inc. (NASDAQ:ATSG) 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.

We covered Air Transport Services Group, Inc. (NASDAQ:ATSG) in another article, where we shared the list of companies Jeff Bezos is investing in. In addition, please check out our hedge fund investor letters Q4 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.

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