Here’s Why Arch Capital Invested in Alphabet (GOOG)

Investment management company Arch Capital recently released its second quarter 2022 investor letter. A copy of the same can be downloaded here. Year to date, the fund returned -24.6% net of realized and estimated fees, compared to -20.0% for the S&P 500 Total Return Index. Since its inception, the fund returned -27.2%.  You can check the top 5 holdings of the fund to know its best picks in 2022.

Arch Capital discussed stocks like Alphabet Inc. (NASDAQ:GOOG)  in the second quarter investor letter. Headquartered in Mountain View, California, Alphabet Inc. (NASDAQ:GOOG) is a multinational technology company. On August 23, 2022, Alphabet Inc. (NASDAQ:GOOG) stock closed at $114.77 per share. One-month return of Alphabet Inc. (NASDAQ:GOOG) rose to 1.03% and its shares lost 19.71% of their value over the last 52 weeks. Alphabet Inc. (NASDAQ:GOOG) has a market capitalization of $1.491 trillion.

Here is what Arch Capital specifically said about Alphabet Inc. (NASDAQ:GOOG):

“In May we decided to buy Alphabet Inc. (NASDAQ:GOOG) (parent company of Google, YouTube, and Android). Our thesis was simple. Alphabet has billions of locked-in users around the globe with businesses like Search, Maps, and YouTube that should grow in-line or faster than worldwide GDP. With all the cash these businesses generate, management is able to reinvest in Google Cloud, Other Bets projects like Waymo, and return cash to shareholders via share repurchases. At an enterprise value-to-free cash flow (EV/FCF) of around 20 at the time of our purchase, we believe this sets up shareholders for low risk 15%+ returns over the next five years.”

Alphabet

Pixabay/Public Domain

Alphabet Inc. (NASDAQ:GOOG) is in 5th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 153 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of the first quarter which was 160 in the previous quarter.

We discussed Alphabet Inc. (NASDAQ:GOOG) in another article and shared Horos Asset Management’s views on the company. In addition, please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.

Disclosure: None. This article is originally published at Insider Monkey.