Ariel Investments, an investment management company, released its “Ariel Small Cap Value Strategy” fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. In 2024, mega-cap technology stocks, known as the "magnificent seven," outperformed expectations. The bullish sentiment was driven by U.S. election results, strong earnings momentum, and a robust labor market. Ariel Small Cap Value Tax-Exempt Composite decreased -0.69% gross of fees (-0.83% net of fees) in the quarter, against this backdrop, compared to -1.06% and +0.33% returns of the Russell 2000 Value Index and the Russell 2000 Index, respectively. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.

In its fourth quarter 2024 investor letter, Ariel Small Cap Value Strategy emphasized stocks such as Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH). Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) is a cruise company that operates through Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises brands. The one-month return of Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) was -17.86%, and its shares gained 16.99% of their value over the last 52 weeks. On February 28, 2025, Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) stock closed at $22.72 per share with a market capitalization of $9.996 billion.

Ariel Small Cap Value Strategy stated the following regarding Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) in its Q4 2024 investor letter:

"Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) advanced over the period following a top- and bottom-line earnings beat and subsequent raise in full-year guidance. Stronger than anticipated consumer demand, healthy onboard spending, robust pricing, solid cost containment and continued progress on leverage reduction boosted results. Looking ahead, NCLH remains focused on right sizing its cost base and improving margins to further strengthen its foundation for sustainable and profitable growth. With a young average fleet and solid liquidity position, we remain enthusiastic about the name."

A luxurious cruise ship overlooking a stunning horizon, highlighting the variety of its itineraries.

Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 58 hedge fund portfolios held Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) at the end of the fourth quarter compared to 33 in the third quarter. While we acknowledge the potential of Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) 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 Norwegian Cruise Line Holdings Ltd. (NYSE:NCLH) and shared the list of stocks Jim Cramer recently discussed. 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.