Wasatch Micro Cap Value Strategy was Rewarded for Patience with Aris Water Solutions (ARIS)

Wasatch Global Investors, an asset management company, released its “Wasatch Micro Cap Value Strategy” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. During the first quarter, the strategy outperformed the benchmark Russell Microcap Index which rose 4.68%. Most of the portfolio holdings of the strategy met or exceeded earnings and revenue expectations in the quarter. Investor sentiments gradually improved as the quarter went on. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.

Wasatch Micro Cap Value Strategy highlighted stocks like Aris Water Solutions, Inc. (NYSE:ARIS), in the first quarter 2024 investor letter. Aris Water Solutions, Inc. (NYSE:ARIS) is an environmental infrastructure and solutions company. The one-month return of Aris Water Solutions, Inc. (NYSE:ARIS) was -12.83%, and its shares gained 59.22% of their value over the last 52 weeks. On June 7, 2024, Aris Water Solutions, Inc. (NYSE:ARIS) stock closed at $14.68 per share with a market capitalization of $852.78 million.

Wasatch Micro Cap Value Strategy stated the following regarding Aris Water Solutions, Inc. (NYSE:ARIS) in its first quarter 2024 investor letter:

"Another significant contributor was Aris Water Solutions, Inc. (NYSE:ARIS), an oilfield-services company that manages the water supplies used in energy exploration and production (E&P). The company’s recent pipeline investments allow E&P businesses to increase the amount of water that can be recycled, which significantly lowers costs for Aris’s customers. In Texas, for example, water use is one of the greatest expenses incurred for drilling activities. The stock was down in the fourth quarter of 2023 due to poor operating results stemming from bad weather that prevented crews from making expected pipeline connections. At the time, we were undeterred because we didn’t think those short-term challenges would materially impact Aris’s long-term results. In the first quarter of this year, we were rewarded for our patience as the stock climbed to a 52-week high on the back of excellent earnings, lower capital expenditures and projections for increased cash flows."

An industrial complex with a pillar of steam billowing from a water recycling plant.

Aris Water Solutions, Inc. (NYSE:ARIS) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held Aris Water Solutions, Inc. (NYSE:ARIS) at the end of the first quarter which was 15 in the previous quarter. The company delivered strong results in the first quarter. Its water volume increased by 6% sequentially and 19% year-over-year and generated adjusted EBITDA of $53 million, up 8% sequentially and nearly 40% year-over-year. While we acknowledge the potential of Aris Water Solutions, Inc. (NYSE:ARIS) 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 Aris Water Solutions, Inc. (NYSE:ARIS) and shared the list of stocks Jim Cramer is Talking About. 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.