Here’s Why ClearBridge Investments Remain Confident in United Parcel Service (UPS)

ClearBridge Investments, an investment management firm, published its “Large Cap Value Strategy” third quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Large Cap Value Strategy outperformed its Russell 1000 Value Index benchmark during the third quarter. On an absolute basis, the Strategy had gains in six of 11 sectors in which it was invested for the quarter. The strongest contributions came from the financials and consumer discretionary sectors. The industrials, materials, and health care sectors were the main detractors. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

ClearBridge Large Cap Value Strategy, in its Q3 2021 investor letter, mentioned United Parcel Service, Inc. (NYSE: UPS) and discussed its stance on the firm. United Parcel Service, Inc. is an Atlanta, Georgia-based multinational shipping & receiving and supply chain management company with a $188.8 billion market capitalization. UPS delivered a 1.38% return since the beginning of the year, while its 12-month returns are up by 34.53%. The stock closed at $217.29 per share on January 03, 2022

Here is what ClearBridge Large Cap Value Strategy has to say about United Parcel Service, Inc.  in its Q3 2021 investor letter:

“United Parcel Service (UPS), coming off extraordinary performance in the second quarter, saw some weakness after its margin guidance disappointed, partly due to remaining contract renegotiations skewing to large enterprises where price increases will be tougher to implement, while labor availability and costs are also expected to pressure margins. It also traded down in sympathy with Federal Express, which cited constrained labor supply affecting network efficiency and exacerbating margin pressure from higher wages. In UPS’s case, concerns around wage inflation could be overstated as UPS has baked in wage hikes in long-term contracts and has somewhat less exposure to shortterm market wage rates. We remain confident in UPS’s strategy of profitable growth and disciplined pricing as it focuses on its high level of on-time delivery and customer satisfaction, a formula that should hold the company in good stead for the long term.”

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Based on our calculations, United Parcel Service, Inc. (NYSE: UPS) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. UPS was in 42 hedge fund portfolios at the end of the third quarter of 2021, compared to 52 funds in the previous quarter. United Parcel Service, Inc. (NYSE: UPS) delivered a 20.94% return in the past 3 months.

In July 2021, we also shared ClearBridge Investments’ Q2 2021 views on UPS in another article. You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q3 page.

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