Madison Investments, an investment advisor, released its “Madison Mid Cap Fund” third-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, the fund (Class Y) returned 7.17% compared to the 9.21% increase for the Russell Midcap Index. The Fund returned 12.44%, in the year-to-date nine months, compared to 14.63% for the index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Madison Mid Cap Fund highlighted stocks like Graco Inc. (NYSE:GGG) in the third quarter 2024 investor letter. Graco Inc. (NYSE:GGG) is a leading manufacturer of systems and equipment to move, measure, control, dispense, and spray fluid and powder materials. The one-month return of Graco Inc. (NYSE:GGG) was 1.55%, and its shares gained 22.49% of their value over the last 52 weeks. On October 17, 2024, Graco Inc. (NYSE:GGG) stock closed at $85.90 per share with a market capitalization of $14.511 billion.
Madison Mid Cap Fund stated the following regarding Graco Inc. (NYSE:GGG) in its Q3 2024 investor letter:
“During the quarter we added three new holdings: Graco Inc. (NYSE:GGG), Lithia Motors, and Asbury Automotive. Graco is the leading manufacturer of fluid handling equipment designed for difficult-to-handle materials with high viscosities, abrasive and corrosive properties, or precise ratio control. While the company has customers across several cyclical end-markets, around 40% of revenue is from parts and accessories, which have a more stable demand profile. Graco’s premium products provide a strong return on investment (ROI) for its customers, helping to reduce their use of labor, material, and energy as well as improve quality and environmental performance. The company’s products also represent a small portion of an end users’ total expense. As a result, Graco has strong pricing power and best-in-class margins, including gross margin above 50% and earnings before interest and taxes (EBIT) margin approaching 30%. We’ve long admired this business and their exceptional management team. With the stock underperforming on general economic weakness, valuation in the shares appeared reasonable, providing a good entry point.”
A technician in a factory controlling the production of fluid and powder materials.
Graco Inc. (NYSE:GGG) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held Graco Inc. (NYSE:GGG) at the end of the second quarter which was 26 in the previous quarter. In the second quarter, Graco Inc. (NYSE:GGG) reported net sales of $553 million, a decrease of 1% from Q2 2023. While we acknowledge the potential of Graco Inc. (NYSE:GGG) 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 addition, please check out our hedge fund investor letters Q3 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.
