Night Watch Investment Management, an investment management company, released its fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter the fund LP depreciated by -2.92% net of fees and ended the quarter at 10.30%.  In the fourth quarter of 2024, the market experienced significant volatility. The initial excitement following the US elections quickly gave way to discouragement as rising inflation figures prompted the Federal Reserve to revise their interest rate cut expectations for 2025 downward. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Night Watch Investment Management highlighted stocks like Distribution Solutions Group, Inc. (NASDAQ:DSGR) in the fourth quarter 2024 investor letter. Headquartered in Fort Worth, Texas, Distribution Solutions Group, Inc. (NASDAQ:DSGR) is a specialty distribution company. The one-month return of Distribution Solutions Group, Inc. (NASDAQ:DSGR) was -11.67%, and its shares gained 14.12% of their value over the last 52 weeks.  On January 7, 2025, Distribution Solutions Group, Inc. (NASDAQ:DSGR) stock closed at $34.63 per share with a market capitalization of $1.617billion.

Night Watch Investment Management stated the following regarding Distribution Solutions Group, Inc. (NASDAQ:DSGR) in its Q4 2024 investor letter:

"During the aftermath of the Covid pandemic, US industrials were seeing rapid growth backed by elevated fiscal spending, as well as the reshoring of activities which for the past decades had shifted towards Asia. Low energy prices combined with tariffs started moving this activity back to the USA. Unfortunately, industrial activity has since gone into decline caused by a slowing economy and a prolonged destocking cycle, with the ISM Purchasing Manager Index going under 50 – indicating contraction – since November 2022.

We believe the long-term trend still exists and might come back alive under President Trump. Our preferred exposure is through Distribution Solutions Group, Inc. (NASDAQ:DSGR), a rollup of value-add distributors where we co-invest alongside CEO Bryan King who owns 77% of the company through his family office LKCM."

A worker loading goods onto a truck in a distribution center.

Distribution Solutions Group, Inc. (NASDAQ:DSGR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 7 hedge fund portfolios held Distribution Solutions Group, Inc. (NASDAQ:DSGR) at the end of the third quarter which was 8 in the previous quarter. Distribution Solutions Group, Inc.'s (NASDAQ:DSGR) consolidated revenue for the third quarter increased 6.6% to $468 million. While we acknowledge the potential of Distribution Solutions Group, Inc. (NASDAQ:DSGR) 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 addition, please check out our hedge fund investor letters Q4 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.