ClearBridge Investments, an investment management company, released its “ClearBridge Large Cap Growth Strategy” third quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, increased volatility was caused by weak employment reports, leading to a brief correction in parts of the U.S. equity market. However, after a 50 basis point interest rate cut by the Federal Reserve, stocks rallied, with the S&P 500 Index rising by 5.89% and the small-cap Russell 2000 Index jumping by 9.27%. Leadership in equities broadened beyond the Magnificent Seven companies. In the quarter, profit-taking among large-cap companies and early signs of a possible market rotation caused growth stocks to underperform value stocks. The benchmark Russell 1000 Growth Index increased by 3.19%, falling behind the Russell 1000 Value Index, which saw a growth of 9.43%. The strategy outperformed in the quarter driven by broader participation among stable and cyclical growth positions in health care, communication services, and industrials. In addition, please check the fund’s top five holdings to know its best picks in 2024.
ClearBridge Large Cap Growth Strategy highlighted stocks like The Estée Lauder Companies Inc. (NYSE:EL), in the third quarter 2024 investor letter. The Estée Lauder Companies Inc. (NYSE:EL) is a global manufacturer of skin care, makeup, fragrance, and hair care products. The one-month return of The Estée Lauder Companies Inc. (NYSE:EL) was 9.04%, and its shares lost 34.32% of their value over the last 52 weeks. On October 3, 2024, The Estée Lauder Companies Inc. (NYSE:EL) stock closed at $95.41 per share with a market capitalization of $34.25 billion.
ClearBridge Large Cap Growth Strategy stated the following regarding The Estée Lauder Companies Inc. (NYSE:EL) in its Q3 2024 investor letter:
“The Estée Lauder Companies Inc. (NYSE:EL), a well-known global cosmetics and skin care brand in consumer staples, was purchased as a cyclical turnaround investment in late 2022. At that time, the company had already reduced its earnings outlook due to softness in its high-margin skincare business, primarily driven by bloated inventory in the Asia travel retail distribution channel. Although we appreciated that operating margin improvement was going to be a journey, weak results in China have persisted longer and been more pronounced than we appreciated. Estee Lauder’s outlook for fiscal year 2025 points to another year of challenges in its end markets. While we still believe Estee Lauder’s long-term profitability is underappreciated, we fully exited the position in the quarter due to lack of visibility on fundamental improvement to the business.”
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The Estée Lauder Companies Inc. (NYSE:EL) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held The Estée Lauder Companies Inc. (NYSE:EL) at the end of the second quarter which was 51 in the previous quarter. The Estée Lauder Companies Inc.’s (NYSE:EL) net sales increased by 8% in the fiscal fourth quarter compared to last year. While we acknowledge the potential of The Estée Lauder Companies Inc. (NYSE:EL) 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 The Estée Lauder Companies Inc. (NYSE:EL) and shared the list of top Recommended Stocks of Jim Cramer. 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.