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 Owens Corning (NYSE:OC). Owens Corning (NYSE:OC) is a residential and commercial building products manufacturer. The one-month return of Owens Corning (NYSE:OC) was -4.14%, and its shares lost 23.89% of their value over the last 52 weeks. On June 16, 2025, Owens Corning (NYSE:OC) stock closed at $136.56 per share, with a market capitalization of $11.509 billion.
Ariel Global Fund stated the following regarding Owens Corning (NYSE:OC) in its Q1 2025 investor letter:
“Finally, we purchased global manufacturer of residential and commercial building materials, Owens Corning (NYSE:OC). The company’s roofing segment is its primary profit driver, benefiting from a concentrated market with resilient revenues and high margins. OC’s insulation business also offers solid profitability and long-term growth potential, given its focus on sustainability and CO2 footprint reduction, while the Door and Composite segments further diversify end market exposure. OC operates within an industry with high barriers to entry due to the requirements for localized manufacturing and robust distribution across channels. In our view, the company’s leading market share in key product categories, such as U.S. asphalt shingle roofing and the North American fiberglass market, suggests significant scale advantages. We think management’s focus on productivity and efficiency enhancements will lead to margin expansion and solid earnings growth over the long-term.”
A construction site with workers in hard hats building a new commercial property, financing provided by the regional bank.
Owens Corning (NYSE:OC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 50 hedge fund portfolios held Owens Corning (NYSE:OC) at the end of the first quarter, which was 48 in the previous quarter. Owens Corning (NYSE:OC) reported revenue of $2.5 billion in the first quarter of 2025, marking an increase of 25% from Q1 2024. While we acknowledge the potential of Owens Corning (NYSE:OC) 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 Owens Corning (NYSE:OC) and shared the list of small-cap manufacturing stocks hedge funds are buying. 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 OC 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.
