We recently published an article titled Greenhaven Associates: Top 10 Stocks to Invest in. In this article, we are going to take a look at where Avnet, Inc. (NASDAQ:AVT) stands against the other stocks.
Edgar “Ed” Wachenheim III is the founder, CEO, and chairman of Greenhaven Associates, a hedge fund management company that manages over $7 billion in investments. He serves as the vice chairman of the board of Central National-Gottesman, the chairman of WNET’s board, a trustee at the Museum of Modern Art, and a life trustee who previously chaired both the executive and investment committees of the New York Public Library. Additionally, he is a trustee emeritus and former vice chair at Skidmore College, as well as a trustee emeritus and past board president of Rye Country Day School. A notable figure in the investment community, Ed’s most recent, prominent achievement is the publishing of his book “Common Stocks and Common Sense” in 2016.
Wachenheim’s book, published by Wiley in April 2016, details his investment strategies and provides insight into his career as a successful value investor. In “Common Stocks and Common Sense”, he explains his approach to investing in undervalued companies that face a low probability of permanent loss, with a goal of achieving an annual return between 15% and 20%. He typically holds stocks for multiple years until they appreciate as expected and makes very few changes to his holdings in the shorter term. Even when his investment thesis proves incorrect, Wachenheim argues that his investments still tend to generate positive returns, given that the stock market has historically returned an average of 9% to 10% annually. His strong emphasis on downside risk and capital preservation is a hallmark of his investment philosophy. He also contributed a chapter to the 2017 book “Harriman’s New Book of Investing Rules”, and a second edition of his own book was released in 2022.
Greenhaven Associates was founded in 1987 as a branch of Central National-Gottesman, one of the largest global marketers and distributors of paper, packaging, wood, and metals. Wachenheim invests with a long-term time horizon of three to four years, disregarding short-term performance, analyst predictions, and hedge fund sentiment. This disciplined approach seems to work in Greenhaven Associates’ favor, as the hedge fund has achieved an impressive average annual return of approximately 19% between 1988 and 2017.
Beyond his career in finance, Wachenheim has been deeply involved in philanthropy and nonprofit leadership. He served on the Skidmore College board from 1993 to 2001, where three of his children studied, and later became vice chair and chair of the investment committee until 2003. He has also been a long-time supporter of Williams College, his own alma mater, where a new science center is named after him. Additionally, he is a life trustee of the New York Public Library, where the Trustees Room has been named in his honor. Wachenheim chaired the board of WNET, the PBS affiliate, from 2017 to 2022, having joined the board a year earlier.
His extensive philanthropic work includes serving on the boards of UJA-Federation of New York, the New York Foundation (1990–1999), and the Arthur Ross Foundation. He and his wife oversee the Sue & Edgar Wachenheim Foundation, a charitable organization with reported assets of $438 million in 2022. The foundation has directed significant contributions to cultural and educational institutions, including Williams College, Skidmore College, the Museum of Modern Art, WNET, and the New York Public Library.
According to its 13F filing for Q4 2024, Greenhaven Associates held stocks worth a total value of over $6.7 billion with stakes in 22 companies. Notably, the hedge fund’s recent portfolio modification has revealed that over 65% of its hedge fund is invested in just four stocks.
Our Methodology
The stocks discussed below were picked from Greenhaven Associates’ 13F filings for the fourth quarter of 2024. They have been compiled in the ascending order of Greenhaven Associates’ stake in them as of December 31, 2024. To provide readers with a more holistic analysis of each stock, we have included the hedge fund sentiment regarding each company using data from over 900 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds show interest in? The reason is simple: our research has shown that we can outperform the market by imitating the latest 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
An assembly line of specialists in goggles and face masks building electronic components.
Avnet, Inc. (NASDAQ:AVT)
Number of Hedge Fund Holders as of Q3: 26
Greenhaven Associates’ Equity Stake: $207.34 Million
Avnet, Inc. (NASDAQ:AVT), a distributor of electronic components headquartered in Phoenix, Arizona, was founded by Charles Avnet in 1921. Initially based in Manhattan’s Radio Row, the company became incorporated in 1955 and began trading on the New York Stock Exchange in 1961, later switching to Nasdaq in 2018 under the ticker AVT. Over the years, the company has adapted to technological changes, offering engineering and supply chain expertise to help customers accelerate, scale, and extend the lifecycle of their designs while providing solutions to complex challenges with global capabilities.
In late 2016, Avnet, Inc. (NASDAQ:AVT) purchased Premier Farnell Limited, a global distributor of technology products and services for electronic and industrial systems. Commonly known as Farnell, the subsidiary markets itself as an Avnet company and operates under the brands Farnell in Europe, Newark in North America, and element14 in Asia Pacific. It offers hardware kits, IoT products, development software, and an online community to support the entire life cycle of its products. In terms of current revenue streams, Avnet, Inc. (NASDAQ:AVT) generates revenue from its electronic components business, its e-commerce site, Farnell, and other emerging opportunities.
The most recent financial statements of Avnet, Inc. (NASDAQ:AVT) were reported on Wednesday, January 29, 2025. The company’s reported revenue for its second quarter ended December 28, 2024, was $5.66 billion, compared with $6.20 billion in the prior year quarter, representing a decrease of 8.72%. Its net income for the quarter was $87.25 million, reflecting a year-over-year decrease of 26%. Operating income was $155.33 million, compared with $236.28 million for the same quarter in the previous fiscal year. It reported earnings per share for the quarter to be $1.00 against $1.31 EPS for the same period last year. However, the cash dividends paid per common share for the quarter ended December 28, 2024, were $0.33 and totaled $29 million against the $0.31 from the same period the previous year.
In the Q2 2025 earnings call, the CEO of Avnet, Philip Gallagher, explained that Avnet, Inc. (NASDAQ:AVT)’s reported revenue, net income, and operating income were lower compared to the same quarter in the fiscal year 2024 due to a challenging semiconductor cycle marked by excess inventory. He highlighted that while the company remains optimistic about long-term industry recovery, the environment is currently unusually complicated by geopolitical factors and high inventory levels. Kenneth Jacobson, the company’s CFO, added that around 75% of the gross margin decline was due to a shift in the sales mix toward Asia. He was also optimistic about the company’s performance and expected its gross margin to normalize over the next few quarters. According to Jacobson, the company is focusing on higher-margin opportunities, such as demand creation, IP&E products, and digital sales, while also managing expenses and leveraging its broader customer base to drive market share growth. Despite the current financial challenges, the confidence expressed by the CEO and CFO, along with their strategic justification for future growth, positions Avnet as a strong contender in the portfolio.
Overall AVT ranks 9th on our list of Greenhaven Associates’ top stock picks. While we acknowledge the potential for AVT 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. If you are looking for an AI stock that is more promising than AVT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.