Brown Advisors, an investment management company, released its “Brown Advisors Global Leaders Strategy” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. In the letter the firm discusses its performance, four new investments made in 2024, lessons from one exit, and insights from its annual offsite. The strategy targets double-digit annualized returns over five years, aiming for 10%+ to double investors’ money every seven years. In 2024, the UCITS C-share USD returned 14.7% net of fees, while the MSCI ACWI benchmark returned 17.5%. Since inception, the Global Leaders UCITS C-share USD has delivered an annualized 11.4% net after fees, surpassing firm’s target, compared to the MSCI ACWI’s 8.9%. In addition, please check the fund’s top five holdings to know its best picks in 2024.
In its fourth quarter 2024 investor letter, Brown Advisors Global Leaders Strategy emphasized stocks such as AutoZone, Inc. (NYSE:AZO). AutoZone, Inc. (NYSE:AZO) is a retailer of automotive replacement parts and accessories. The one-month return of AutoZone, Inc. (NYSE:AZO) was 2.82%, and its shares gained 13.46% of their value over the last 52 weeks. On February 27, 2025, AutoZone, Inc. (NYSE:AZO) stock closed at $3,444.69 per share with a market capitalization of $57.809 billion.
Brown Advisors Global Leaders Strategy stated the following regarding AutoZone, Inc. (NYSE:AZO) in its Q4 2024 investor letter:
“AutoZone, Inc. (NYSE:AZO) is the leading replacement automotive parts retailer and distributor in the US, servicing both the Do-it-Yourself (DIY) and Do-it-for-Me (DIFM) segments of the used car market, a market that is structurally growing as the fleet expands, with a high degree of visibility into future demand of the 6+ year used car cohort, which is AutoZone’s core target market. AutoZone is expanding into the faster growing DIFM market, as well as into Brazil and Mexico. The company’s superior customer outcome is immediate parts availability and the meaningful de-risking of the balance sheets of smaller garages which do not need to hold inventory themselves. It offers a differentiated service for customers based on local availability of parts (“in stock, in market”), quick turnaround speed and advice (including free specialty tool loans so DIY customers can complete necessary maintenance at lower cost but generating enduring loyalty). All this has historically proven difficult to replicate in an e-commerce setting. While there are a small number of large companies operating in this growing market, further consolidation of smaller competitors is expected as leading retailers’ scale (depth and breadth of inventory) and network effects (proximity to customers in immediate need of repair) constitute strong moats. One of the impressive characteristics of the company’s capital allocation is that it has delivered exceptional capital discipline and deployed its cash flow into share buybacks which has reduced the company’s share count by about 85% since 2000.”
A technician in a mechanic’s uniform replacing an A/C compressor, signifying the company’s automotive replacement parts business.
AutoZone, Inc. (NYSE:AZO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 56 hedge fund portfolios held AutoZone, Inc. (NYSE:AZO) at the end of the fourth quarter compared to 47 in the third quarter. While we acknowledge the potential of AutoZone, Inc. (NYSE:AZO) 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 AutoZone, Inc. (NYSE:AZO) and shared Bretton Fund’s views on the company. 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.