Is Axalta Coating Systems (AXTA) A Smart Long-Term Buy?

Ariel Investments, an investment management firm, published its “Ariel Fund”, “Ariel Appreciation Fund”, “Ariel Focus Fund”, “Ariel International Fund”, and “Ariel Global Fund” first-quarter 2021 investor letter – a copy of which can be downloaded here. A return of 19.50% was recorded by Ariel Fund for the first quarter of 2021, 15.65% by Ariel Appreciation Fund, 16.48% by  Ariel Focus Fund, 0.14% by Ariel International Fund, and 3.47% by Ariel Global Fund for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Ariel Investments, in its Q1 2021 investor letter, mentioned Axalta Coating Systems Ltd. (NYSE: AXTA), and shared their insights on the company. Axalta Coating Systems Ltd. is a Philadelphia, Pennsylvania-based chemical industry company that currently has a $7.5 billion market capitalization. Since the beginning of the year, AXTA delivered a 13.63% return, extending its 12-month returns to 40.37%. As of May 28, 2021, the stock closed at $32.44 per share.

Here is what Ariel Investments has to say about Axalta Coating Systems Ltd. in its Q1 2021 investor letter:

“While we did not exit any holdings during the quarter in Ariel Fund, we initiated a position in Axalta Coating Systems, Ltd. (AXTA) which is emerging from the shadow of its former parent, DuPont. We expect Axalta—a leading manufacturer of coatings for cars and trucks—to continue to gain market share from ongoing consolidation in its refinishing business and further margin improvement through cost savings programs.”

Our calculations show that Axalta Coating Systems Ltd. (NYSE: AXTA) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, Axalta Coating Systems Ltd. was in 43 hedge fund portfolios, compared to 46 funds in the fourth quarter of 2020. AXTA  delivered an 18.65% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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Disclosure: None. This article is originally published at Insider Monkey.