ClearBridge Investments, an investment management company, released its “ClearBridge Sustainability Leaders Strategy” second quarter 2024 investor letter. A copy of the same can be downloaded here. U.S. stocks increased during a difficult quarter for diversified portfolios due to the market leadership remaining centered around a few mega-cap firms that were thought to be the major winners in the expanding AI industry. The benchmark Russell 3000 Index returned 3.22% in the quarter. The strategy underperformed the benchmark in the second quarter and had gains in four of 10 sectors in which it was invested, on an absolute basis. Overall stock selection detracted the most, mainly stock selection in the IT, consumer discretionary, health care, industrials, and real estate sectors. Please check the top 5 holdings of the strategy, to know its best pick in 2024.
ClearBridge Sustainability Leaders Strategy highlighted stocks like Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter. Amazon.com, Inc. (NASDAQ:AMZN) provides consumer products, advertising, and subscription services through online and physical stores. The one-month return of Amazon.com, Inc. (NASDAQ:AMZN) was 5.90%, and its shares gained 44.41% of their value over the last 52 weeks. On July 10, 2024, Amazon.com, Inc. (NASDAQ:AMZN) stock closed at $194.49 per share with a market capitalization of $2.024 trillion.
ClearBridge Sustainability Leaders Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) operates the world’s leading e-commerce marketplace and the largest public cloud platform and has a burgeoning advertising business. We expect to see sustained margin improvement as Amazon’s retail regionalization efforts are bearing fruit and as its advertising business continues to scale ahead of peers. We believe the profitability ramp is still in the early innings as the company turns its attention to improving costs. One area will be inbound shipping, where faster delivery times through reduced freight, miles and packaging can reduce waste. We also see generative AI tailwinds and infrastructure modernization driving re-acceleration in growth at AWS, further enhancing Amazon’s free cash flow compounding potential. In addition, following our early 2024 ESG engagements with Amazon (after multiyear engagements) we were positively inclined to see continued improvements in labor relations (health and safety metrics, benefits and wages), as well as in environmental stewardship (climate targets, reducing packaging materials, electric delivery trucks) and innovation (commitments to responsible AI and data privacy). One of the newly announced initiatives on the retail side is consolidating deliveries into fewer boxes, which reduces packaging.”
A customer entering an internet retail store, illustrating the convenience of online shopping.
Amazon.com, Inc. (NASDAQ:AMZN) is in first position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 302 hedge fund portfolios held Amazon.com, Inc. (NASDAQ:AMZN) at the end of the first quarter which was 293 in the previous quarter. Amazon.com, Inc. (NASDAQ:AMZN) reported strong results in the first quarter and delivered $143.3 billion in revenue, up 13% year-over-year. While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) 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 Amazon.com, Inc. (NASDAQ:AMZN) and shared the best AI value stocks that are ‘money machines’ according to NYU’s Aswath Damodaran. 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.
