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 LKQ Corporation (NASDAQ:LKQ), in the second quarter 2024 investor letter. LKQ Corporation (NASDAQ:LKQ) distributes vehicle products and parts to repair, maintain, and accessorize automobiles. The one-month return of LKQ Corporation (NASDAQ:LKQ) was 8.71%, and its shares lost 24.73% of their value over the last 52 weeks. On July 12, 2024, LKQ Corporation (NASDAQ:LKQ) stock closed at $43.78 per share with a market capitalization of $11.679 billion.
ClearBridge Sustainability Leaders Strategy stated the following regarding LKQ Corporation (NASDAQ:LKQ) in its Q2 2024 investor letter:
“LKQ Corporation (NASDAQ:LKQ) is also focused on recycling heavy materials. LKQ is the largest wholesale distributor of alternative parts for the auto aftermarket in North America and Europe. It provides “like kind and quality” (‘LKQ’) auto parts as lower-cost alternatives to those provided by auto OEMs. It is the largest wholesale distributor of collision parts (used to repair vehicle exteriors) in the U.S. and Canada and the largest distributor of mechanical parts (used to repair internal components) in Europe. LKQ also runs its own salvage and recycling operations. As the world’s largest recycler of cars at end-of-life, recovering 90%+ of the materials from scrap cars for reuse or recycling, LKQ supports resource efficiency and responsible consumption as an investable theme.
In a recent engagement with LKQ we had an extensive discussion about how it has become increasingly efficient over time at inventorying and selling more parts from its salvage vehicles, which reduces the amount of parts going for scrap and increases LKQ’s margins, as it earns higher revenues from same fixed cost of goods.”
A worker in a factory using a robotic arm to assemble automotive body panels.
LKQ Corporation (NASDAQ:LKQ) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held LKQ Corporation (NASDAQ:LKQ) at the end of the first quarter which was 25 in the previous quarter. LKQ Corporation’s (NASDAQ:LKQ) revenue for the first quarter of 2024 was $3.7 billion an increase of 10.6% year over year. While we acknowledge the potential of LKQ Corporation (NASDAQ:LKQ) 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 LKQ Corporation (NASDAQ:LKQ) and shared Artisan Mid Cap Value Fund’s views on the company in the previous quarter. 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.
