Ariel Investments, an investment management company, released its “Ariel Global Fund” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter of 2025, investors challenged the idea of “American exceptionalism.” After record highs in January, U.S. markets fell due to tariff fears and policy uncertainty, with the Magnificent Seven dropping nearly 15% due to concerns over America’s AI leadership. Meanwhile, international equity markets outperformed the U.S. in their strongest quarterly showing in 15 years. Against this backdrop, the Ariel Global fund traded +6.31% higher in the quarter, compared to the -1.32% return of its primary benchmark, the MSCI ACWI Index, and the +4.77% return of its secondary benchmark, the MSCI ACWI Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Ariel Global Fund highlighted stocks such as CVS Health Corporation (NYSE:CVS). CVS Health Corporation (NYSE:CVS) is a US-based health solutions provider. The one-month return of CVS Health Corporation (NYSE:CVS) was 6.23%, and its shares gained 10.98% of their value over the last 52 weeks. On June 16, 2025, CVS Health Corporation (NYSE:CVS) stock closed at $67.71 per share with a market capitalization of $85.655 billion.
Ariel Global Fund stated the following regarding CVS Health Corporation (NYSE:CVS) in its Q1 2025 investor letter:
“American healthcare company, CVS Health Corporation (NYSE:CVS) outperformed in the period. Solid quarterly earnings results, better-than-expected 2025 guidance and the release of the preliminary 2026 Medicare Advantage Rate Notice, which proposes a meaningful increase for Medicare Advantage (MA) payments, drove performance. Meanwhile, management continues its focus on improving margins and enhancing its positioning in MA. CVS believes the program can remain an attractive business for Aetna and CVS Health over time as it implements a multi-year repricing strategy across plan level benefits. Meanwhile, CVS continues to take actions to drive long-term success, including the appointments of longtime company executive, David Joyner, as President and CEO and industry veteran, Steve Nelson, as President of Aetna to lead the turnaround efforts. CVS also added four new board members.”
A row of shelves in a retail pharmacy, demonstrating the variety of drugs and over-the-counter products.
CVS Health Corporation (NYSE:CVS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 73 hedge fund portfolios held CVS Health Corporation (NYSE:CVS) at the end of the first quarter, compared to 74 in the previous quarter. In the first quarter of 2025, CVS Health Corporation (NYSE:CVS) reported revenue of $94.59 billion, representing a 7% year-over-year growth. While we acknowledge the potential of CVS Health Corporation (NYSE:CVS) 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 undervalued AI stock set for massive gains.
In another article, we covered CVS Health Corporation (NYSE:CVS) and shared the list of most undervalued retail stocks to buy. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of CVS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
