Darling Ingredients (DAR) Traded Lower as its EBITDA Guidance Fell Short of Estimates
Aristotle Atlantic Partners, LLC, an investment advisor, released its “Large Cap Growth Strategy” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, Aristotle Atlantic’s Large Cap Growth Strategy delivered 8.77% gross of fees (8.71% net of fees) outperforming the Russell 1000 Growth Index’s return of 8.33%. Security selection led the portfolio to outperform in the quarter. Security selection in Information Technology and Financials contributed the most to relative performance while health care and Industrials detracted. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Aristotle Atlantic Large Cap Growth Strategy highlighted stocks like Darling Ingredients Inc. (NYSE:DAR), in the second quarter 2024 investor letter. Darling Ingredients Inc. (NYSE:DAR) develops, produces, and sells natural ingredients from edible and inedible bio-nutrients. The one-month return of Darling Ingredients Inc. (NYSE:DAR) was 1.91%, and its shares lost 44.57% of their value over the last 52 weeks. On July 19, 2024, Darling Ingredients Inc. (NYSE:DAR) stock closed at $37.41 per share with a market capitalization of $5.977 billion.
Aristotle Atlantic Large Cap Growth Strategy stated the following regarding Darling Ingredients Inc. (NYSE:DAR) in its Q2 2024 investor letter:
"Darling Ingredients Inc. (NYSE:DAR) detracted from portfolio performance in the quarter, as shares continued to be weak following an in-line quarterly earnings report where the company provided initial 2024 EBITDA guidance of $1.3B to $1.4B, below consensus estimates. On a positive note, the company called out improving fat prices exiting the first quarter. Additionally, in its renewable diesel joint venture, the company has worked through higher-cost feedstocks contracted during start-up, so renewable diesel margins should improve on the lower input prices. We believe there are several catalysts for Darling going forward, including the blenders tax credit transitioning to a producer’s tax credit on January 1, 2025 and positive commentary around contracting sustainable aviation fuel (SAF) at a $1-$2 per gallon premium to renewable diesel. SAF production starts were pulled forward to the fourth quarter from prior guidance of early 2025."
A selection of pet food ingredients being prepared in a kitchen for quality and safety testing.
Darling Ingredients Inc. (NYSE:DAR) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held Darling Ingredients Inc. (NYSE:DAR) at the end of the first quarter which was 34 in the previous quarter. Net sales of Darling Ingredients Inc. (NYSE:DAR) for Q1 2024 were $1.42 billion compared to $1.79 billion for Q1 2023. While we acknowledge the potential of Darling Ingredients Inc. (NYSE:DAR) 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 Darling Ingredients Inc. (NYSE:DAR) and shared Carillon Scout Mid Cap Fund's views on the company. In addition, please check out our hedge fund investor letters Q2 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.