We recently compiled a list of the 10 Best Stocks to Buy According to John W. Rogers of Ariel Investments. In this article, we are going to take a look at where Affiliated Managers Group, Inc. (NYSE:AMG) stands against John W. Rogers’ other stock picks.
John W. Rogers Jr. is a prominent American investor and hedge fund manager who serves as the chairman, CEO, and CIO of Ariel Investments. Rogers graduated from Princeton University in 1980 and spent two and a half years as a stock broker at William Blair. Three years later, he founded Ariel Investments, the first Black-owned mutual fund company in the United States, with $200,000 supported by family and friends. Howard University would be Ariel Investments’ initial customer, with the firm receiving $100,000 to manage its endowment. The next year, the city of Chicago granted Ariel $1 million to operate a pension plan. By 2009, Ariel Investments was managing $3.3 billion in assets, which has since increased to a staggering $12.9 billion.
Notably, the investor’s flagship Ariel Fund’s faced one of its first hurdles back on October 19, 1987, the day of the crash known as Black Monday. The next major test came after the dot-com crisis in 2000, with the Ariel Fund rebounding strongly, returning 29% that year and 14% in 2001. During the 2008 financial crisis, Rogers’ investments in equities, such as real estate investment firm CBRE Group and newspaper publisher Gannett, caused the fund to lose 48% before returning 63% in 2009.
Rogers appreciates patience as he looks for companies that he believes will reach their full potential in a set period of years. This strategy of scooping up value stocks, pioneered by famed investors Warren Buffett and Benjamin Graham, involves buying stocks whose worth may be undervalued by the market. Speaking on a Bloomberg Invest Conference, the investor stated that market enthusiasts might get overly focused on short-term trends, and those prepared to look three or five years ahead may still uncover opportunities.
Ariel Investments remains steadfast in its belief of value investing, even within the current market climate. This confidence in its strategy was reaffirmed in the fund’s Q1 2025 Investor Letter. Here is what Ariel Fund had to say:
Most major U.S. indices ended the first quarter of 2025 in the red, with investors fleeing to safety as optimism for another year of U.S. outperformance driven by economic momentum and the new administration’s pro-business stance was quickly replaced by tariff fears and policy uncertainty. The Magnificent Seven, which drove most of the markets gains over the last three years, led the decline, falling nearly -15%. Value bested growth and large caps held up better than their small cap brethren. International equity markets, led by Europe and China, surged—delivering their strongest quarterly outperformance versus the U.S. in 15 years. Meanwhile, deteriorating confidence and apprehension about a global trade war is fueling recession fears. While Wall Street sits on edge and markets remain erratic, we are actively leaning into the volatility by judiciously acquiring the downtrodden shares of quality companies whose value should be realized over the long term.
Our Methodology
For this list, we picked stocks from Ariel Investments’ 13F portfolio as of the end of the fourth quarter of 2024. These equities are also popular among elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
An expert investment advisor consulting a high net worth individual in a modern office.
Affiliated Managers Group, Inc. (NYSE:AMG)
Ariel Investments’ Stake as of Q4: $263.3 million
Number of Hedge Fund Holders: 34
Affiliated Managers Group, Inc. (NYSE:AMG) is an investment management firm that offers investment management services to mutual funds, institutional clients, retails, and high-net-worth individuals in the United States through partnerships with high-quality independent partner-owned firms, known as ‘Affiliates’.
Affiliated Managers Group, Inc. (NYSE:AMG) announced fourth-quarter 2024 earnings of $6.86 per share, exceeding consensus projections of $6.02. However, the company’s revenue fell short of expectations, totaling $502.7 million compared to the expected $531.53 million. In a separate strategic move, AMG expanded its $500 million Equity Distribution Program, allowing the company to sell shares through several financial institutions.
Affiliated Managers Group, Inc. (NYSE:AMG) recently agreed to acquire a minority share in Verition Fund Management, one of the fastest-growing hedge funds. As a result of the sale, AMG plans to diversify its portfolio in alternative investments, although it will not be involved in making investment choices for the hedge fund.
Horos Asset Management stated the following regarding Affiliated Managers Group, Inc. (NYSE:AMG) in its Q3 2024 investor letter:
“This quarter, we reduced our stake in Affiliated Managers Group, Inc. (NYSE:AMG), a U.S.-based company that invests in other asset management firms, following its strong performance and its relatively lower attractiveness compared to new alternatives added to the portfolio.”
Overall AMG ranks 4th on our list of John W. Rogers’ stock picks. While we acknowledge the potential for AMG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AMG but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks to Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.