Here’s Why Nestlé S.A. (NSRGY) Underperformed in Q4

The London Company, an investment management company, released “The London Company Large Cap Strategy” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. U.S. equities increased in the fourth quarter and most of the major indices saw positive gains. The quarter’s economic data was mixed but generally encouraging. The portfolio returned 0.8% (0.6% net) during the quarter compared to a 2.8% increase for the Russell 1000 Index. Positive sector exposure has contributed to offset the negative impact of stock selection on the relative performance. 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, The London Company Large Cap Strategy emphasized stocks such as Nestlé S.A. (OTC:NSRGY). Nestlé S.A. (OTC:NSRGY) is a food and beverage company. The one-month return of Nestlé S.A. (OTC:NSRGY) was 13.29%, and its shares lost 8.27% of their value over the last 52 weeks. On February 24, 2025, Nestlé S.A. (OTC:NSRGY) stock closed at $97.78 per share with a market capitalization of $251.561 billion.

The London Company Large Cap Strategy stated the following regarding Nestlé S.A. (OTC:NSRGY) in its Q4 2024 investor letter:

“Nestlé S.A. (OTC:NSRGY) – NSRGY shares underperformed the broader market all year. Sentiment across the packaged food space’s low as it emerges from two years of unprecedented food price inflation. NSRGY’s latest earnings report did not suggest an acceleration in organic growth from current subdued trends. NSRGY’s portfolio is attractively positioned in categories that have stable, long-term volume tailwinds such as coffee, pet food, and nutritional health. Barring further executional missteps, we believe the downside to the current stock price is low.”

A filled shopping cart with popular food and beverage items.

Nestlé S.A. (OTC:NSRGY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 4 hedge fund portfolios held Nestlé S.A. (OTC:NSRGY) at the end of the fourth quarter compared to 4 in the third quarter. While we acknowledge the potential of Nestlé S.A. (OTC:NSRGY) 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 Nestlé S.A. (OTC:NSRGY) and shared Mar Vista Global Quality Strategy’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.