Bretton Capital Management, an investment management company, released “Bretton Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The market is experiencing a period of high returns, with two consecutive years of around 25% returns and 15 years of mid-teens returns, prompting investors to be cautious. The average stock market return is around 9-10% per year, historically, based on corporate earnings growth and dividends and buybacks. The 20 companies the fund owns are well-positioned and expected to perform well. Against this backdrop, in the fourth quarter, the fund returned -0.98% compared to 2.41% return for the S&P 500. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
In its fourth quarter 2024 investor letter, Bretton Fund emphasized stocks such as Alphabet Inc. (NASDAQ:GOOG). Alphabet Inc. (NASDAQ:GOOG), the parent company of Google, offers various platforms and services operating through Google Services, Google Cloud, and Other Bets segments. The one-month return of Alphabet Inc. (NASDAQ:GOOG) was -5.41%, and its shares gained 31.82% of their value over the last 52 weeks. On February 14, 2025, Alphabet Inc. (NASDAQ:GOOG) stock closed at $186.87 per share with a market capitalization of $2.267 trillion.
Bretton Fund stated the following regarding Alphabet Inc. (NASDAQ:GOOG) in its Q4 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) was the major contributor for the quarter, adding 1.3%. Alphabet’s stock followed up a strong 2023 with another strong year, adding 2.7% to the fund as our top contributor.
Alphabet’s revenue in 2024 was $350 billion, which was $43 billion more than the previous year. That’s the equivalent of adding the entire revenue of a company like Coca-Cola, Oracle, Starbucks, or our very own Visa in a single year. Users’ demand for more internet video and information—and the demand for advertisers to get in front of them is massive and still growing fast. YouTube is the world’s most-watched streaming video platform and accounts for 10% of Americans’ time in front of a TV, more than any traditional TV channel.
Despite growing much faster than the average company, Alphabet continues to trade at roughly the same price-to-earnings multiple as the rest of the market. Earnings per share grew 39% last year, and we expect it will grow in the mid-teens for the next few years. If it comes anywhere close to that, the shares today are a bargain…”(Click here to read the full text)
A laptop and phone open to Google’s services in an everyday setting.
Alphabet Inc. (NASDAQ:GOOG) is in 7th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 160 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the third quarter which was 165 in the previous quarter. Alphabet Inc.’s (NASDAQ:GOOG) 2024 revenue increased by 14% from 2023, reaching $350 billion. The fourth quarter revenue reached $96.5 billion, an increase of 12% in both reported and constant currency. While we acknowledge the potential of Alphabet Inc. (NASDAQ:GOOG) 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 Alphabet Inc. (NASDAQ:GOOG) and shared the list of best long-term growth stocks to buy. In addition, please check out our hedge fund investor letters Q4 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.