River Road Asset Management, an investment management company released its “River Road Mid Cap Value Fund” Q4 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, AMG River Road Small Cap Value Fund (Class N) returned 2.97% compared to -1.75% returns for the Russell MidCap Value Index. For the year 2024, the fund returned 13.56%, compared to Index return of 13.07%. Stocks rallied in November after a Republican victory but declined sharply following hawkish Fed comments. Shorter duration stocks, including small caps and value, lost most of their post-election gains by the end of December. For more information on the fund’s best picks in 2024, please check its top five holdings.

In its fourth quarter 2024 investor letter, River Road Mid Cap Value Fund emphasized stocks such as Talen Energy Corporation (NASDAQ:TLN). Talen Energy Corporation (NASDAQ:TLN) is an independent power producer and infrastructure company. The one-month return Talen Energy Corporation (NASDAQ:TLN) was 4.85%, and its shares gained 120.92% of their value over the last 52 weeks. On April 1, 2025, Talen Energy Corporation (NASDAQ:TLN) stock closed at $207.44 per share with a market capitalization of $9.441 billion.

River Road Mid Cap Value Fund stated the following regarding Talen Energy Corporation (NASDAQ:TLN) in its Q4 2024 investor letter:

"Another top contributor was Talen Energy Corporation (NASDAQ:TLN), a leading independent power producer. TLN boasts a diverse 10.7 GW generation portfolio spanning nuclear (48%), natural gas (41%), and coal (11%) assets across the PJM (northeastern states) and WECC (western regions). The electrical grid faces mounting pressure from rapidly escalating demand, fueled by transformative technologies like artificial intelligence (AI). Consequently, the price of clean and reliable nuclear power is expected to increase significantly. TLN’s crown jewel, the Susquehanna nuclear facility, enjoys dual advantages: a tax credit safeguarding its cash flow downside and upside cash flow potential as power prices respond to new agreements. These benefits are exemplified by TLN’s recent contract with Amazon® and Constellation Energy Group’s (CEG) plans to reactivate Three Mile Island to meet Microsoft’s® demand.

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Talen Energy Corporation (NASDAQ:TLN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 77 hedge fund portfolios held Talen Energy Corporation (NASDAQ:TLN) at the end of the fourth quarter compared to 68 in the third quarter. While we acknowledge the potential of Talen Energy Corporation (NASDAQ:TLN) 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.

We covered Talen Energy Corporation (NASDAQ:TLN) in another article, where we shared the list of best alternative energy stocks to buy. 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.

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