Diamond Hill Capital, an investment management company, released its “Small Cap Fund” first-quarter 2025 investor letter. A copy of the letter can be downloaded here. In Q1, markets were uneven due to the new presidential administration’s activity, leading to concern about the future. The Russell 3000 Index fell by 4.7% in Q1, the first quarterly loss since Q3 2023. Diamond Hill Small Cap Fund returned -11.56% in Q1, trailing the Russell 2000 Index’s -9.48% return. For more information on the fund’s top picks in 2025, please check its top five holdings.

In its first-quarter 2025 investor letter, Diamond Hill Small Cap Fund highlighted stocks such as Allegiant Travel Company (NASDAQ:ALGT). Based in Las Vegas, Nevada, Allegiant Travel Company (NASDAQ:ALGT) is a leisure travel company. The one-month return of Allegiant Travel Company (NASDAQ:ALGT) was 1.85%, and its shares lost 6.88% of their value over the last 52 weeks. On May 6, 2025, Allegiant Travel Company (NASDAQ:ALGT) stock closed at $49.41 per share with a market capitalization of $901.965 billion.

Diamond Hill Small Cap Fund stated the following regarding Allegiant Travel Company (NASDAQ:ALGT) in its Q1 2025 investor letter:

"Other bottom Q1 contributors included First Advantage, Civitas Resources and Allegiant Travel Company (NASDAQ:ALGT). Regional airline Allegiant Travel fell against a challenging macroeconomic backdrop and concerns about consumer spending, which could hurt customer demand. Further, there are some concerns the recently announced US tariffs could impact Boeing’s ability to deliver new planes to Allegiant as expected. However, we maintain our conviction in Allegiant’s resiliency in the long term and are maintaining our position."Is Allegiant Travel Company (ALGT) the Best Airline Stock to Buy Now?

A busy airport terminal with travelers passing through on their leisure travels.

Allegiant Travel Company (NASDAQ:ALGT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held Allegiant Travel Company (NASDAQ:ALGT) at the end of the fourth quarter, compared to 15 in the third quarter. While we acknowledge the potential of Allegiant Travel Company (NASDAQ:ALGT) 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 covered Allegiant Travel Company (NASDAQ:ALGT) and shared the list of best airline stocks to buy. In the previous quarter investor letter, Diamond Hill Small Cap Fund discussed Allegiant Travel Company (NASDAQ:ALGT), highlighting its rise as concerns eased—particularly following the resolution of the Boeing strike. In addition, please check out our hedge fund investor letters Q1 2025 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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