Broyhill Asset Management, an investment management company, released a second-quarter 2024, investor letter. A copy of the letter can be downloaded here. Despite gains in global markets, the Broyhill Equity portfolio declined in the second quarter. As the gap in market leadership grew, the fund underperformed. That doesn’t make it any easier to take and isn’t an excuse. At the end of the quarter, the top five investments made up almost 50% of the equity portfolio. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Broyhill Asset Management highlighted stocks like Philip Morris International Inc. (NYSE:PM) in the second quarter 2024 investor letter. Philip Morris International Inc. (NYSE:PM) tobacco company working to deliver a smoke-free future. The one-month return of Philip Morris International Inc. (NYSE:PM) was 5.87%, and its shares gained 29.44% of their value over the last 52 weeks. On September 16, 2024, Philip Morris International Inc. (NYSE:PM) stock closed at $125.97 per share with a market capitalization of $195.858 billion.
Broyhill Asset Management stated the following regarding Philip Morris International Inc. (NYSE:PM) in its Q2 2024 investor letter:
“Philip Morris International Inc. (NYSE:PM) is a multinational tobacco company focused on smoke-free products like heated tobacco and nicotine pouches to create a smoke-free future by transitioning away from traditional cigarettes. The company’s shares gained 12% during the quarter and tacked on another 14% in July. Well-publicized supply shortages, increasing competition from unauthorized products, grandstanding politicians, and a temporary halt to online sales did little to slow PM’s smoke-free momentum, as sales of reduced-risk products grew to nearly 40% of total company revenues. In fact, management expects an acceleration across its smoke-free business in the second half as supply constraints ease, driving substantial upward revisions to guidance and estimates. Notably, Zyn volume guidance (nicotine pouches) for FY24 has increased from 520 million units at the start of the year to 560–580 million units today, with capacity for 900 million cans next year. After three years of sideways trading, investors are finally waking up to the strength and resilience of PM’s earnings power and transition from a manufacturer of traditional tobacco to a faster-growing and significantly more profitable business. The stock’s rally over the last quarter was enough to put it ahead of both the S&P and the Nasdaq for the past three years. But at a now “inflated” 14.5x FY25 consensus estimates (which are likely too low), we think today’s valuation is a long way from discounting the transformation to a smoke-free Philip Morris.”
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Philip Morris International Inc. (NYSE:PM) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 70 hedge fund portfolios held Philip Morris International Inc. (NYSE:PM) at the end of the second quarter which was 64 in the previous quarter. While we acknowledge the potential of Philip Morris International Inc. (NYSE:PM) 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 Philip Morris International Inc. (NYSE:PM) and shared the list of best counter-cyclical and defensive stocks to invest in. In addition, please check out our hedge fund investor letters Q2 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.