ClearBridge Investments, an investment management company, released its “ClearBridge Growth Strategy” second quarter 2024 investor letter. A copy of the letter can be downloaded here. The strategy’s benchmark switched from the Russell 3000 Growth Index to the Russell Midcap Growth Index, during the quarter. Together with this, the strategy name was simplified from “ClearBridge Aggressive Growth” to “ClearBridge Growth”. Despite the difficult period for smaller cap stocks, the strategy outperformed the benchmark with contributions from holdings in health care and IT. Overall stock selection and sector allocation contributed to performance, relatively. In addition, please check the fund’s top five holdings to know its best picks in 2024.
ClearBridge Growth Strategy highlighted stocks like Vertiv Holdings Co (NYSE:VRT), in the second quarter 2024 investor letter. Vertiv Holdings Co (NYSE:VRT) designs, manufactures, and services critical digital infrastructure technologies and life cycle services for data centers, communication networks, and commercial and industrial environments. The one-month return of Vertiv Holdings Co (NYSE:VRT) was 0.53%, and its shares gained 261.62% of their value over the last 52 weeks. On July 5, 2024, Vertiv Holdings Co (NYSE:VRT) stock closed at 91.78 per share with a market capitalization of $34.357 billion.
ClearBridge Growth Strategy stated the following regarding Vertiv Holdings Co (NYSE:VRT) in its Q2 2024 investor letter:
“The benchmark change to the Russell Midcap Growth Index has also had a meaningful impact on the Strategy’s sector allocations, increasing our communication services overweight, reducing our health care overweight and shifting our previous market weight in IT to a meaningful overweight. These allocations are a byproduct of our bottom-up, active stock selection and may shift over time based on where we are finding the best risk/reward in our target universe.
That said, we continue to look to diversify the portfolio, seeking to add new ideas in sectors such as industrials, where we have historically had less exposure. In the second quarter, we added three new holdings in the sector: electrical product manufacturer Vertiv Holdings Co (NYSE:VRT), building products supplier Builders FirstSource and environmental waste management provider Clean Harbors. The largest new addition of the three, Vertiv, has key offerings in power and thermal management designed to power, cool, deploy, secure and maintain electronics that process, store and transmit data. The company generates the majority of its revenue from the data center end market, which we believe should benefit from continued spending growth supported in part by the rise in power requirements of next-generation AI graphic processing units (GPUs). The company is nicely profitable today though we see room for further margin expansion ahead.”
A close-up of a group of technicians working on complex data center systems.
Vertiv Holdings Co (NYSE:VRT) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 85 hedge fund portfolios held Vertiv Holdings Co (NYSE:VRT) at the end of the first quarter which was 75 in the previous quarter. Vertiv Holdings Co (NYSE:VRT) had a strong start in 2024 with an 8% increase in first quarter sales. While we acknowledge the potential of Vertiv Holdings Co (NYSE:VRT) 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.
We discussed Vertiv Holdings Co (NYSE:VRT) in another article and shared top “Mostly AI” Stock Picks of billionaire Phillipe Laffont. Vertiv Holdings Co (NYSE:VRT) positively contributed to the performance of ClearBridge Investments’ SMID Cap Growth Strategy 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.
