We recently compiled a list of the Top 10 Stocks to Buy According to Lee Munder Capital Group. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOGL) stands against the other stocks.
Lee Munder Capital Group Investments, more commonly known as LMCG Investments, LLC, is an independent, employee-owned investment management company. Established in 2000 as Lee Munder Capital Group, it has 25 years of average investment experience and typically deals with alternative investments and wealth management. Specifically, the globally focused investment management firm provides a diverse array of investment strategies tailored to institutional investors, financial advisors, and private clients. The firm specializes in global equity, fixed income, and absolute return or relative value credit strategies. With a client-first approach, LMCG prioritizes aligning its interests with those of its investors, emphasizing transparency and long-term value creation. By leveraging its expertise and disciplined investment approach, the firm aims to deliver strong financial performance and best-in-class investment solutions. Founded and managed by Lee Munder himself, the firm has established a strong reputation in the financial industry.
As of March 2024, LMCG Investments manages discretionary assets totaling approximately $5.5 billion, serving 1,527 clients. The firm reported $1.63 billion in managed 13F securities for the fourth quarter of 2024, with its top 10 holdings making up over 28% of its portfolio. LMCG’s strategic investment approach and diversified portfolio reflect its commitment to delivering strong financial performance and value to its clients.
Munder also established Lee Munder Venture Partners LLC and founded Munder Capital Management. With extensive experience in investment management, Munder has held key positions, including Vice President at Loomis, Sayles & Co. LP. Currently, he serves as Chairman at IC Real Tech, an innovation-driven video technology company. Lee Munder holds an MBA from Wayne State University and an undergraduate degree from Ohio State University. Given this, we will take a look at top 10 stocks in Lee Munder’s portfolio.
Our Methodology
The stocks discussed below were picked from LMCG’s 13F filings for the fourth quarter of 2024. They have been compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To provide readers with a more holistic analysis of each stock, we have included the hedge fund sentiment regarding each company using data from over 900 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds show interest in? The reason is simple: our research has shown that we can outperform the market by imitating the latest 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A user’s hands typing a search query into a Google Search box, emphasizing the company’s search capabilities.
Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders as of Q3: 202
LMCG’s Equity Stake: $48.80 Million
One of the prominent stocks Munder holds in the technology sector, Alphabet Inc. (NASDAQ:GOOGL) is headquartered in Mountain View, California. It is a multinational technology conglomerate and the third-largest technology company in the world by revenue, following Amazon and Apple. Established in 2015 through a restructuring of Google, Alphabet became the parent company of Google and several other former Google subsidiaries. Alphabet is part of the Big Five American tech companies.
Alphabet Inc. (NASDAQ:GOOGL) generates revenue from its search engine, artificial intelligence developments, mobile operating systems, cloud computing services, and advertising. For Q3 2024, the company reported a revenue of $88.27 billion, representing an 11% increase compared to the same period last year and surpassing analysts’ expectations of $86.39 billion. The company’s net income for the quarter reached $26.3 billion, marking a year-over-year growth of 33.6%. Operating income stood at $28.5 billion, an improvement from $21.3 billion in Q3 2023. Alphabet exceeded the consensus estimate for earnings per share (EPS) by $0.29, reporting an EPS of $2.12 for the quarter, compared to $1.55 in the same period of the previous year.
The company’s Q3 2024 financial performance appears strong, as Alphabet Inc. (NASDAQ:GOOGL) exceeded both revenue and earnings expectations. The 11% year-over-year increase in revenue and 33.6% rise in net income demonstrated solid growth and operational efficiency. The operating income boost from $21.3 billion to $28.5 billion, alongside a $0.29 earnings per share (EPS) beat, reflects enhanced profitability and solid market performance. This is positive news for investors and indicates that Alphabet is successfully expanding its business and maintaining competitive advantages, especially given the ongoing challenges in the tech sector.
Oakmark Equity and Income Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOGL) in its Q4 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. Despite ongoing litigation with the Department of Justice in its antitrust case, the U.S.-headquartered interactive media and services company’s stock price rose after posting solid third-quarter earnings. In the Search division, the company generated low-teens year-over-year revenue growth and management highlighted that they’re seeing strong user engagement with their new AI Overviews feature. The biggest upside surprise came from the Cloud division, where revenue growth accelerated to 35% and margins reached a record of 17%. This performance was driven by client demand for AI Infrastructure and Generative AI Solutions as well as core Google Cloud Platform (GCP) products. We continue to believe Alphabet is a collection of great businesses that can unlock further value over the long term through its world-class AI capabilities.”
Overall GOOGL ranks 4th on our list of Lee Munder Capital Group’s top stock picks. While we acknowledge the potential of GOOGL 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. If you are looking for an AI stock that is more promising than GOOGL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.