Diamond Hill Capital, an investment management company, released its “Small Cap Fund” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. In Q4, markets rose unevenly, ending another positive year for markets. Stocks rose generally after the US election, but several lost most or all of their gains before the end of the year. Against this backdrop, the strategy outperformed the Russell 2000 Index in Q4 and for the full year. Relative strength in Q4 was concentrated among industrials holdings outperforming benchmark peers by a wide margin. Additionally, consumer staples and energy holdings also provided relative tailwinds. On the other hand, consumer discretionary holdings were the main cause of strategy’s relative weakness. Even though holdings were quite favorable on an absolute basis, underweight to the technology sector was another headwind in Q4. The strategy returned 0.93% in Q4 and 13.22% in 2024, compared to 0.33% and 11.54% return for Russell 2000 Index for the same periods. For more information on the fund’s top picks in 2024, please check its top five holdings.

In its fourth quarter 2024 investor letter, Diamond Hill Small Cap Fund emphasized stocks such as Allegiant Travel Company (NASDAQ:ALGT). Based in Las Vegas, Nevada, Allegiant Travel Company (NASDAQ:ALGT) is a leisure travel company. One-month return of Allegiant Travel Company (NASDAQ:ALGT) was -16.94%, and its shares gained 5.50% of their value over the last 52 weeks. On February 12, 2025, Allegiant Travel Company (NASDAQ:ALGT) stock closed at $84.82 per share with a market capitalization of $1.571 billion.

Diamond Hill Small Cap Fund stated the following regarding Allegiant Travel Company (NASDAQ:ALGT) in its Q4 2024 investor letter:

"On an individual holdings’ basis, among our top Q4 contributors were Allegiant Travel Company (NASDAQ:ALGT) and United States Lime & Minerals. Shares of regional airline Allegiant rose in the quarter as concerns about the company moderated — significantly, the Boeing strike was resolved, providing Allegiant clarity on the delivery schedule of its 737s."

A busy airport terminal with travelers passing through on their leisure travels.

Allegiant Travel Company (NASDAQ:ALGT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held Allegiant Travel Company (NASDAQ:ALGT) at the end of the third quarter which was 17 in the previous quarter. Allegiant Travel Company (NASDAQ:ALGT) reported consolidated net income of $45.7 million, resulting in a consolidated EPS of $2.48 for the full year and net income of $38.9 million, yielding earnings per share of $2.10 for the fourth quarter. While we acknowledge the potential of Allegiant Travel Company (NASDAQ:ALGT) 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 Allegiant Travel Company (NASDAQ:ALGT) and shared the list of top airline stocks benefiting from the air travel boom. Allegiant Travel Company (NASDAQ:ALGT) detracted from Diamond Hill Small Cap Fund's performance in the previous quarter due to an unfavorable pricing environment. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.