What insights does John W. Rogers provide on investing strategies? How does Affiliated Managers Group, Inc. (AMG) compare to other stocks in Rogers’ portfolio? What recent challenges has the Ariel Fund faced in the market? How is Ariel Investments adapting to current market conditions? What are the implications of AMG’s recent earnings report for investors?
We recently compiled a list of the 10 Best Stocks to Buy According to John W. Rogers of Ariel Investments and in this article, we are going to take a look at where Affiliated Managers Group, Inc. (NYSE:AMG) stands against John W. Rogers’ other stock picks.
John W. Rogers Jr. is a prominent American investor and hedge fund manager who serves as the chairman, CEO, and CIO of Ariel Investments. Rogers graduated from Princeton University in 1980 and spent two and a half years as a stock broker at William Blair. Three years later, he founded Ariel Investments, the first Black-owned mutual fund company in the United States, with $200,000 supported by family and friends. Howard University would be Ariel Investments’ initial customer, with the firm receiving $100,000 to manage its endowment. The next year, the city of Chicago granted Ariel $1 million to operate a pension plan. By 2009, Ariel Investments was managing $3.3 billion in assets, which has since increased to a staggering $12.9 billion.
Notably, the investor’s flagship Ariel Fund faced one of its first hurdles back on October 19, 1987, the day of the crash known as Black Monday. The next major test came after the dot-com crisis in 2000, with the Ariel Fund rebounding strongly, returning 29% that year and 14% in 2001. During the 2008 financial crisis, Rogers’ investments in equities, such as real estate investment firm CBRE Group and newspaper publisher Gannett, caused the fund to lose 48% before returning 63% in 2009.
Rogers appreciates patience as he looks for companies that he believes will reach their full potential in a set period of years. This strategy of scooping up value stocks, pioneered by famed investors Warren Buffett and Benjamin Graham, involves buying stocks whose worth may be undervalued by the market. Speaking on a Bloomberg Invest Conference, the investor stated that market enthusiasts might get overly focused on short-term trends, and those prepared to look three or five years ahead may still uncover opportunities.
Ariel Investments remains steadfast in its belief of value investing, even within the current market climate. This confidence in its strategy was reaffirmed in the fund’s Q1 2025 Investor Letter. Here is what Ariel Fund had to say:
"Most major U.S. indices ended the first quarter of 2025 in the red, with investors fleeing to safety as optimism for another year of U.S. outperformance driven by economic momentum and the new administration’s pro-business stance was quickly replaced by tariff fears and policy uncertainty. The Magnificent Seven, which drove most of the market’s gains over the last three years, led the decline, falling nearly -15%. Value bested growth and large caps held up better than their small cap brethren. International equity markets, led by Europe and China, surged—delivering their strongest quarterly outperformance versus the U.S. in 15 years. Meanwhile, deteriorating confidence and apprehension about a global trade war is fueling recession fears. While Wall Street sits on edge and markets remain erratic, we are actively leaning into the volatility by judiciously acquiring the downtrodden shares of quality companies whose value should be realized over the long term."
For this list, we picked stocks from Ariel Investments’ 13F portfolio as of the end of the fourth quarter of 2024. These equities are also popular among elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Is Affiliated Managers Group Inc. (AMG) the Cheap Asset Management Stock to Buy Now?
Ariel Investments’ Stake as of Q4: $263.3 million
Number of Hedge Fund Holders: 34
Affiliated Managers Group, Inc. (NYSE:AMG) is an investment management firm that offers investment management services to mutual funds, institutional clients, retail, and high-net-worth individuals in the United States through partnerships with high-quality independent partner-owned firms, known as ‘Affiliates’.
Affiliated Managers Group, Inc. (NYSE:AMG) announced fourth-quarter 2024 earnings of $6.86 per share, exceeding consensus projections of $6.02. However, the company’s revenue fell short of expectations, totaling $502.7 million compared to the expected $531.53 million. In a separate strategic move, AMG expanded its $500 million Equity Distribution Program, allowing the company to sell shares through several financial institutions.
Affiliated Managers Group, Inc. (NYSE:AMG) recently agreed to acquire a minority share in Verition Fund Management, one of the fastest-growing hedge funds. As a result of the sale, AMG plans to diversify its portfolio in alternative investments, although it will not be involved in making investment choices for the hedge fund.
Horos Asset Management stated the following regarding Affiliated Managers Group, Inc. (NYSE:AMG) in its Q3 2024 investor letter:
“This quarter, we reduced our stake in Affiliated Managers Group, Inc. (NYSE:AMG), a U.S.-based company that invests in other asset management firms, following its strong performance and its relatively lower attractiveness compared to new alternatives added to the portfolio.”
Overall, AMG ranks 4th on our list of John W. Rogers’ stock picks. While we acknowledge the potential for AMG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AMG but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks to Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
Among the Best Stocks to Buy According to John W. Rogers of Ariel Investments
In the ever-evolving landscape of stock market investments, investors continuously seek insights from seasoned professionals. One respected voice in this arena is John W. Rogers Jr., the founder and co-CEO of Ariel Investments, a firm known for its value-oriented investment strategy. Rogers, a prominent figure in the investment community, shares his unique perspectives on stocks that exhibit strong potential for growth. Let’s explore some of the best stocks to buy according to Rogers, as well as the principles underpinning his investment philosophy.
The Background of John W. Rogers
John W. Rogers has made a name for himself as a leading figure in the investment world. With over 40 years of experience, Rogers combines a solid educational foundation—having graduated from Princeton University with a degree in economics—with a robust track record as an investor. His firm, Ariel Investments, focuses on identifying undervalued stocks, particularly those in the small to mid-cap sector, which tend to be overlooked by larger institutional investors.
Rogers emphasizes the importance of a long-term approach in equity investing. His strategy involves thorough research to identify companies with strong fundamentals, solid management, and the potential for sustainable competitive advantages. This perspective often translates into detecting growth opportunities at lower price points, allowing for substantial long-term returns.
Investment Principles
At the core of Rogers’ investment philosophy is the belief in value investing—a practice popularized by legendary investors like Benjamin Graham and Warren Buffett. Rogers advocates for identifying companies whose stock prices do not reflect their true intrinsic value. This approach often includes:
- Understanding the Business: Analyzing a company’s financial metrics, competitive position, industry dynamics, and management quality.
- Long-Term Focus: Rogers highlights the importance of holding investments for extended periods to ride out the inevitable market fluctuations.
- Market Inefficiencies: The belief that the market does not always accurately price stocks creates opportunities for astute investors who conduct thorough research.
Notable Stocks Recommended by Rogers
Though the market landscape continuously shifts, several stocks consistently emerge in Rogers’ recommendations. Here are a few prominent names that aficionados of Ariel Investments may find appealing:
Ford Motor Company (F)
As the automotive industry pivots towards electric vehicles (EVs), Ford stands out for its restructuring efforts and innovative product line. Rogers has pointed to Ford’s commitment to electric mobility and its strategic investments in EV technology as significant growth drivers. With a history that dates back over a century, Ford’s ability to adapt to changing consumer preferences positions it as a compelling option for forward-thinking investors.
Bank of America (BAC)
The financial sector, particularly banking, offers distinct advantages in a rising interest rate environment. Bank of America, one of the largest financial institutions in the United States, has a diversified revenue stream and a focus on technology-driven enhancements in its services. Rogers sees Bank of America as a well-capitalized institution poised to benefit from economic recovery and increasing loan demand.
Amazon (AMZN)
Known for its customer-centric approach and massive e-commerce platform, Amazon remains a staple recommendation among savvy investors. Despite its recent fluctuations, Rogers believes in Amazon’s long-term growth potential due to its continuous investments in technology, logistics, and cloud computing through Amazon Web Services (AWS). The company’s ability to innovate ensures its relevance in various sectors, making it a worthy addition to an investment portfolio.
Procter & Gamble (PG)
In the consumer goods space, Procter & Gamble stands out for its strong brand portfolio and consistent performance. Rogers values the stability that P&G provides, especially in challenging economic environments. The company’s focus on brand loyalty and innovative products allows it to maintain a competitive edge, which is crucial for long-term investor confidence.
The Importance of Diversification
While Rogers showcases select stocks with strong fundamentals, he also emphasizes the necessity of diversification within an investment portfolio. Exposure to different sectors and regions can help mitigate risks. Rogers encourages investors to balance their portfolios with both growth and value-oriented stocks for optimal performance.
Final Thoughts
For investors seeking actionable insights, John W. Rogers of Ariel Investments offers a wealth of knowledge rooted in decades of experience. His emphasis on value investing principles helps prioritize long-term success over short-term market trends. By focusing on companies with compelling fundamentals and sustainable growth prospects, savvy investors can make informed decisions that may lead to robust returns.
In navigating the complexities of stock market investing, leveraging Rogers’ insights can serve as a crucial tool. Whether considering individual stocks like Ford, Bank of America, Amazon, or Procter & Gamble, a balanced and researched approach is essential for maximizing potential in today’s dynamic market environment. As always, investors should conduct their research and consider professional guidance tailored to their unique financial situations.
John W. Rogers, founder of Ariel Investments, is known for his value-driven investment philosophy. Here are some stocks he favors, showcasing a mix of sectors and growth potential:
Apple Inc. (AAPL): Recognized for its strong brand loyalty and innovative products, Apple continues to drive growth through its ecosystem.
Amazon.com Inc. (AMZN): A leader in e-commerce and cloud computing, Amazon shows resilience and diversification in its business model.
Microsoft Corp. (MSFT): With a robust presence in software and cloud services, Microsoft benefits from ongoing digital transformation trends.
Berkshire Hathaway Inc. (BRK.B): This conglomerate’s diversified portfolio, led by Warren Buffett, makes it a stable investment choice.
Procter & Gamble Co. (PG): Known for its strong consumer brands, P&G offers stability and consistent dividends, appealing in volatile markets.
Johnson & Johnson (JNJ): This healthcare giant provides steady revenue through its pharmaceuticals, medical devices, and consumer health products.
- Alphabet Inc. (GOOGL): As the parent company of Google, Alphabet remains a powerhouse in digital advertising and AI developments.
These selections are influenced by their sustainable growth potential, strong fundamentals, and ability to adapt to changing market conditions.