Is Knowles Corporation (KN) a Bet with Growth Potential?

Ariel Investments, an investment management company, released its “Ariel Appreciation Fund” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. The Ariel Appreciation fund increased +4.06% in the quarter, trailing the +8.23% and +8.60% returns of the Russell Midcap Value and Russell Midcap indices. Except for real estate, all sectors in the S&P 500 saw increases, even though momentum was the main factor influencing performance across size and style. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.

Ariel Appreciation Fund highlighted stocks like Knowles Corporation (NYSE:KN) in the first quarter 2024 investor letter. Knowles Corporation (NYSE:KN) provides capacitors, radio frequency (RF) filtering products, balanced armature speakers, micro-acoustic microphones, and audio solutions. The one-month return of Knowles Corporation (NYSE:KN) was 1.53%, and its shares gained 1.82% of their value over the last 52 weeks. On June 13, 2024, Knowles Corporation (NYSE:KN) stock closed at $17.86 per share with a market capitalization of $1.603 billion.

Ariel Appreciation Fund stated the following regarding Knowles Corporation (NYSE:KN) in its first quarter 2024 investor letter:

"Leading provider of audio components and precision electrical devices, Knowles Corporation (NYSE:KN), also traded lower on mixed earnings results. Strength within their core hearing health market was offset by weaker demand for precision devices from Industrial clients. However, management is focused on cost controls and inventory management which should help drive meaningful earnings growth this year. Longer-term, we believe KN will benefit from further focusing its business on its niche and market leading positions in hearing health and precision devices, and away from the more competitive consumer electronics market. Additionally, we are optimistic in the synergy opportunities driven by the recent acquisition of Cornell Dubilier, which has enhanced KN’s existing customer base and revenue streams. At current levels, KN is trading at a meaningful discount to our estimate of private market value."

A research and development lab, assembling a network of high-performance capacitors.

Knowles Corporation (NYSE:KN) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held Knowles Corporation (NYSE:KN) at the end of the first quarter which was 18 in the previous quarter. In Q1 2024, Knowles Corporation (NYSE:KN) delivered $196 million in revenues, up 36% from Q1 2023. While we acknowledge the potential of Knowles Corporation (NYSE:KN) 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 Q1 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.