Wedgewood Partners, an investment management company, released its second-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, Wedgewood Composite’s net return was 3.7% compared to the Standard & Poor’s 4.3%, the Russell 1000 Growth Index’s 8.3%, and the Russell 1000 Value Index’s -2.2% return for the same period. Year to date the composite returned 15.7% compared to the 15.3%, 20.7%, and 6.6% returns for the indexes, respectively. In addition, you can check the fund’s top 5 holdings to know its best picks in 2024.
Wedgewood Partners highlighted stocks like CDW Corporation (NASDAQ:CDW), in the second quarter 2024 investor letter. CDW Corporation (NASDAQ:CDW), with a market capitalization of $31.85 billion, manufactures, is an information technology (IT) solutions provider. The one-month return of CDW Corporation (NASDAQ:CDW) was 2.79%, and its shares gained 24.89% of their value over the last 52 weeks. On July 17, 2024, CDW Corporation (NASDAQ:CDW) stock closed at $236.98 per share.
Wedgewood Partners stated the following regarding CDW Corporation (NASDAQ:CDW) in its Q2 2024 investor letter:
“CDW Corporation’s (NASDAQ:CDW) gross profit dollar slightly declined compared to last year as small and medium-sized businesses; IT budgets remained languid after a boom during the Covid-19 years. Often, hardware and software cycles help drive small and medium-sized business investment activity. CDW should benefit from a couple larger upcoming cycles, particularly related to the proliferation of AI-enabled edge computing devices as well as the refresh of Covid-19- era hardware. CDW’s core customer typically has very limited IT department staffing and resources, making it difficult for large enterprise-focused IT vendors to reach those customers. As a result, there are plenty of proven technologies that have been adopted by larger businesses, often long ago, that will eventually find their way into small and medium-sized businesses with the help of CDW. CDW is agnostic to the consumption models or form factors of technologies, which is why the Company has been able to maintain superior returns over many different technology cycles and innovation trends. Helping small and medium-sized businesses set up and run their IT departments is more important than any specific technology that happens to enable those departments and should help the Company continue to grow and take share of IT budgets over time.”
An IT Executive reviewing blueprints and schematics for a hardware solution.
CDW Corporation (NASDAQ:CDW) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held CDW Corporation (NASDAQ:CDW) at the end of the first quarter which was 30 in the previous quarter. CDW Corporation’s (NASDAQ:CDW) first-quarter results fell short of expectations. Gross profit for the quarter was $1.1 billion, a 2% decrease from the previous year. Non-GAAP operating income was $404 million, down 7%, and non-GAAP net income per share was $1.92, a 6% decline. While we acknowledge the potential of CDW Corporation (NASDAQ:CDW) 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 CDW Corporation (NASDAQ:CDW) and shared the list of best hardware stocks according to Goldman Sachs. CDW Corporation (NASDAQ:CDW) was a positive contributor to Wedgewood Partners’ performance in Q1 2024. 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.