Effective Management Drove CNO Financials' (CNO) Terrific Performance

Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the fund returned -2.51% compared to a -7.74% return for the Russell 2000 Value Index. President Trump announced his tariffs on April 2nd, causing equity markets to decline sharply and increasing volatility. Additionally, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its first-quarter 2025 investor letter, FPA Queens Road Small Cap Value Fund highlighted stocks such as CNO Financial Group, Inc. (NYSE:CNO). CNO Financial Group, Inc. (NYSE:CNO) is an insurance holding company that develops and markets health insurance, annuity, individual life insurance, and other insurance products. The one-month return of CNO Financial Group, Inc. (NYSE:CNO) was -4.98%, and its shares gained 34.54% of their value over the last 52 weeks. On May 21, 2025, CNO Financial Group, Inc. (NYSE:CNO) stock closed at $37.78 per share with a market capitalization of $3.746 billion.

FPA Queens Road Small Cap Value Fund stated the following regarding CNO Financial Group, Inc. (NYSE:CNO) in its Q1 2025 investor letter:

"CNO Financial Group, Inc. (NYSE:CNO) is a life insurer that also sells supplemental medical and group insurance. Under CEO Gary Bhojwani, the company has done a terrific job growing its agent force, growing its direct-to consumer (“D2C”) channel, adding a suite of third-party products, bolting on a worksite channel (Optavise), and incrementally optimizing its balance sheet. The company generates a lot of cash and has reduced shares outstanding by nearly a third since 2019.12 CNO had an exceptional 2024 with strong earnings growth and achieved a nearly 12% return on equity. Shares performed well but continue to trade at the reasonable price of 10x EPS."

CNO Financial Group, Inc. (NYSE:CNO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held CNO Financial Group, Inc. (NYSE:CNO) at the end of the fourth quarter, compared to 22 in the third quarter. While we acknowledge the potential of CNO Financial Group, Inc. (NYSE:CNO) 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 undervalued AI stock set for massive gains.

In another article, we covered CNO Financial Group, Inc. (NYSE:CNO) and shared Hotchkis & Wiley Mid-Cap Value Fund's views on the company in the previous quarter. 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.