Patient Capital Management, a value investing firm, released its “Patient Capital Opportunity Equity Strategy” second quarter 2024 investor letter. A copy of the letter can be downloaded here. During the quarter, the strategy returned -1.9% net of fees compared to the S&P 500’s 4.3% return. According to a three-factor performance attribution model, allocation and interaction effects led to the portfolio’s underperformance which was partially offset by selection effects. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Patient Capital Opportunity Equity Strategy highlighted stocks like Alphabet Inc. (NASDAQ:GOOGL), in the second quarter 2024 investor letter. Alphabet Inc. (NASDAQ:GOOGL), the parent company of Google, offers various platforms and services operating through Google Services, Google Cloud, and Other Bets segments. The one-month return of Alphabet Inc. (NASDAQ:GOOGL) was -4.69%, and its shares gained 35.58% of their value over the last 52 weeks. On July 23, 2024, Alphabet Inc. (NASDAQ:GOOGL) stock closed at $181.79 per share with a market capitalization of $2.173 trillion.
Patient Capital Opportunity Equity Strategy stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q2 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOGL) was a top contributor in the second quarter, finally catching up to its peers in the Magnificent 7. The company gained 20.8% in the period following strong first quarter earnings, a new $70B repurchase program (3% of shares outstanding) and the initiation of a cash dividend ($0.20 per share; 0.42% yield). We continue to believe the market underappreciates Google’s exposure to AI with its Gemini model being integrated into search results, YouTube advertising and its cloud offering. We continue to think that the cloud players will be the AI winners in the long-term, with Google being well positioned to take advantage. While the company trades at 24x 2024 earnings, if you remove the money-losing and under-earning businesses, you realize that you are paying below a market multiple for the core Google business. We do not believe there are many other AI winners trading at such an attractive multiple.”
A laptop and phone open to Google’s services in an everyday setting.
Alphabet Inc. (NASDAQ:GOOGL) is in 4th position on our list of 31 Most Popular Stocks Among Hedge Funds. Alphabet Inc. (NASDAQ:GOOGL) was held by 222 hedge fund portfolios at the end of the first quarter, compared to 214 in the previous quarter, according to our database. In the first quarter Alphabet Inc. (NASDAQ:GOOGL) generated $80.5 billion in revenues, up 15% year-over-year (see the details here). While we acknowledge the potential of Alphabet Inc. (NASDAQ:GOOGL) 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 Alphabet Inc. (NASDAQ:GOOGL) and shared the list of biggest AI stock upgrades and downgrades in July so far. In addition, please check out our hedge fund investor letters Q2 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.
