Diamond Hill Capital, an investment management company, released its “Long-Short Strategy” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The market was mixed in the first quarter of 2025, due to the uncertainty caused by the new administration’s avalanche of activity. However, the portfolio outperformed the Russell 1000 Index and the blended benchmark (60% Russell 1000 Index/40% Bloomberg US Treasury Bills 1-3 Month Index) in the quarter. In Q1, both long and short books generated relative tailwinds, with the short book underperforming the index, while the long book was positive, despite the index being negative. In addition, you may look at the fund’s top 5 holdings to learn about its best picks in 2025.
In its first-quarter 2025 investor letter, Diamond Hill Long-Short Strategy highlighted stocks such as Matson, Inc. (NYSE:MATX). Matson, Inc. (NYSE:MATX) provides ocean transportation and logistics services. The one-month return of Matson, Inc. (NYSE:MATX) was -0.72%, and its shares lost 15.66% of their value over the last 52 weeks. On June 24, 2025, Matson, Inc. (NYSE:MATX) stock closed at $110.92 per share, with a market capitalization of $3.621 billion.
Diamond Hill Long-Short Strategy stated the following regarding Matson, Inc. (NYSE:MATX) in its Q1 2025 investor letter:
“As volatility picked up sharply in the quarter, we were active in the portfolio — and we anticipate that as volatility continues into Q2, we will likewise attempt to capitalize on compelling opportunities to reposition the portfolio for the period ahead. Among the new positions we initiated in Q1 were long positions in Salesforce and Capital One, as well as short positions in Matson, Inc. (NYSE:MATX) and eBay.
Matson is an ocean container shipping company servicing US Jones Act routes (routes regulated by federal law mandating goods shipped between US ports be transported on ships built, owned and operated by US citizens or permanent residents) in Hawaii and Alaska, as well as smaller routes in Guam, Japan, New Zealand and Micronesia. It also provides express shipping services from China to Long Beach, CA, which is its most profitable route. The company has recently benefited from several temporary tailwinds, including Houthi attacks on Red Sea shipping, port strikes and the threat of tariffs, which have pulled forward some shipping. However, we anticipate these tailwinds will reverse and industry capacity will increase while demand decreases — factors which should pressure Matson’s earnings and, with it, the share price. Accordingly, we initiated a short position in the quarter.”
A processional line of imposing cargo ships in a large port, capturing the scope of the company’s ocean transportation business.
Matson, Inc. (NYSE:MATX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held Matson, Inc. (NYSE:MATX) at the end of the first quarter, which was 36 in the previous quarter. In Q1 2025, Matson, Inc. (NYSE:MATX) reported a remarkable year-over-year net income growth of 100.3%, reaching $72.3 million, with diluted earnings per share increasing 109.6% to $2.18. While we acknowledge the potential of Matson, Inc. (NYSE:MATX) 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 Matson, Inc. (NYSE:MATX) and shared the list of best marine shipping stocks to invest in. 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 MATX 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.
