Lazard Ltd. (LAZ) Benefitted from Momentum in the Advisory Business

Ariel Investments, an investment management company, released its “Ariel Small Cap Value Strategy” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the first quarter of 2024, US indexes continued to exceed expectations. This rally was fueled by excitement surrounding artificial intelligence (AI), robust corporate earnings growth, declining inflation, and expectations for interest rate cuts. In this backdrop, Ariel Small Cap Value Tax-Exempt Composite rose +3.97% gross of fees (+3.71% net of fees) and outperformed the +2.90% return of the Russell 2000 Value Index but fell short of the +5.18% gain of the growthier Russell 2000 Index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.

Ariel Small Cap Value Strategy highlighted stocks like Lazard, Inc. (NYSE:LAZ), in the first quarter 2024 investor letter. Lazard, Inc. (NYSE:LAZ) is a financial advisory and asset management firm. Lazard, Inc.'s (NYSE:LAZ) one-month return was 1.05%, and its shares gained 28.46% of their value over the last 52 weeks. On June 5, 2024, Lazard, Inc. (NYSE:LAZ) stock closed at $39.36 per share with a market capitalization of $3.55 billion.

Ariel Small Cap Value Strategy stated the following regarding Lazard, Inc. (NYSE:LAZ) in its first quarter 2024 investor letter:

"Financial advisory and asset manager, Lazard, Inc. (NYSE:LAZ) also advanced in the period following solid top- and bottom-line results, highlighted by momentum in the advisory business, improving financing markets and early signs of progress on previously articulated cost-savings initiatives. Near-term, management reiterated its cautiously optimistic long-term guidance for the mergers & acquisitions segment given an improving macroeconomic outlook, although LAZ expects geopolitical uncertainty to remain a headwind. Notably, the company aims to increase firm-wide revenue two-fold through double-digit annual revenue growth by 2030. At current levels, we believe the LAZ represents a healthy discount to our private market value estimate."

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Lazard, Inc. (NYSE:LAZ) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held Lazard, Inc. (NYSE:LAZ) at the end of the first quarter which was 12 in the previous quarter. Lazard Ltd. (NYSE:LAZ) achieved a record first-quarter firm-wide adjusted net revenue of $747 million, up 42% year-over-year. The increase was driven mainly by the company’s financial advisory business. While we acknowledge the potential of Lazard, Inc. (NYSE:LAZ) 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 cheapest AI stock.

In another article, we discussed Lazard, Inc. (NYSE:LAZ) and shared Morgan Stanley’s top stock picks for 2024. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

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