Artisan Partners, an investment management company, released its “Artisan Small Cap Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. US stocks concluded a strong year with strong gains in Q4. In Q4, the portfolio's performance was flat and narrowly trailed the Russell 2000® Growth Index. In 2024, the portfolio produced a robust absolute return that was in line with the Russell 2000® Growth Index but outperformed the Russell 2000 Index. In the quarter, its Investor Class fund ARTSX returned 0.61%, Advisor Class fund APDSX posted a return of 0.66%, and Institutional Class fund APHSX returned 0.67%, compared to a return of 1.70% for the Russell 2000 Growth Index. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2024.

In its fourth quarter 2024 investor letter, Artisan Small Cap Fund emphasized stocks such as VSE Corporation (NASDAQ:VSEC). VSE Corporation (NASDAQ:VSEC) is a diversified aftermarket products and services company that operates through Aviation and Fleet. The one-month return of VSE Corporation (NASDAQ:VSEC) was 8.89%, and its shares gained 54.85% of their value over the last 52 weeks. On March 7, 2025, VSE Corporation (NASDAQ:VSEC) stock closed at $116.32 per share with a market capitalization of $2.4 billion.

Artisan Small Cap Fund stated the following regarding VSE Corporation (NASDAQ:VSEC) in its Q4 2024 investor letter:

"During the quarter, we initiated new GardenSM positions in VSE Corporation (NASDAQ:VSEC), Flowserve and Integer Holdings. VSE Corporation provides aftermarket distribution and maintenance, repair and overhaul services for the aviation (commercial and business jets) and fleet (delivery vehicles) industries. The company recently divested its federal and defense assets and is exploring strategic alternatives for its fleet segment. This would allow VSE to transform into a pure-play aviation aftermarket company, which we believe is an attractive market due to growing commercial airline passenger traffic, an aging fleet and delayed deliveries for new aircraft that increase the need for more aftermarket parts and services."

A close-up of a technician's hands assembling parts for a commercial aircraft.

VSE Corporation (NASDAQ:VSEC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held VSE Corporation (NASDAQ:VSEC) at the end of the fourth quarter compared to 14 in the third quarter. In the fourth quarter of 2024, VSE Corporation (NASDAQ:VSEC) reported revenue of $299 million, an increase of 27% compared to Q4 2023. While we acknowledge the potential of VSE Corporation (NASDAQ:VSEC) 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 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.