ClearBridge Investments, an investment management company, released its “ClearBridge Growth Strategy” third quarter 2024 investor letter. A copy of the letter can be downloaded here. Signs of inflation cooling, and an ambitious Federal Reserve rate-cutting cycle led to broad equity market gains in Q3, primarily driven by smaller capitalization companies. In the quarter value shares outperformed with the Russell Midcap Value increasing 10.08% compared to the Russell Midcap Growth Index’s 6.54% gain. Against this backdrop, the strategy underperformed the Russell Midcap Growth Index benchmark. Idiosyncratic headwinds across a few of the Strategy’s holdings hindered performance. In addition, please check the fund’s top five holdings to know its best picks in 2024.
ClearBridge Growth Strategy highlighted stocks like Builders FirstSource, Inc. (NYSE:BLDR) in the third quarter 2024 investor letter. Based in Irving, Texas, Builders FirstSource, Inc. (NYSE:BLDR) is a building material, manufactured components, and construction services provider. The one-month return of Builders FirstSource, Inc. (NYSE:BLDR) was 13.62%, and its shares gained 53.66% of their value over the last 52 weeks. On October 8, 2024, Builders FirstSource, Inc. (NYSE:BLDR) stock closed at $193.14 per share with a market capitalization of $22.492 billion.
ClearBridge Growth Strategy stated the following regarding Builders FirstSource, Inc. (NYSE:BLDR) in its Q3 2024 investor letter:
“The Strategy has historically been underweight industrials and consumer discretionary sectors, but positioning moves over the last year have helped close these gaps and provided several new contributors this quarter. Builders FirstSource, Inc. (NYSE:BLDR), a supplier of building products, rose strongly in the quarter on optimism that rate cuts will improve demand for single family and eventually multifamily residential construction. Cintas, a uniform rental and facilities services company, put up solid results as cross-selling and margin expansion efforts continue to bear fruit. Starbucks also provided a lift as the stock reacted positively to the naming of a new CEO, industry veteran Brian Niccol, who is expected to reinvigorate operations.”
A crane lifting a truss during the construction of a new building.
Builders FirstSource, Inc. (NYSE:BLDR) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 59 hedge fund portfolios held Builders FirstSource, Inc. (NYSE:BLDR) at the end of the second quarter which was 72 in the previous quarter. In the second quarter, Builders FirstSource, Inc. (NYSE:BLDR) reported net sales of $4.5 billion, fell 1.6% year-over-year, driven by a 3.8% decline in core organic sales, reflecting the expected slowdown in multi-family housing segment. While we acknowledge the potential of Builders FirstSource, Inc. (NYSE:BLDR) 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 Builders FirstSource, Inc. (NYSE:BLDR) and shared the list of the most volatile stocks to buy. In addition, please check out our hedge fund investor letters Q3 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.