Is GXO Logistics (GXO) A Smart Investment Pick?

ClearBridge Investments, an investment management firm, published its “Value Equity Strategy” third quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Value Equity Strategy had a negative absolute return for the third quarter and underperformed the benchmark Russell 1000 Value Index. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

ClearBridge Investments Value Equity Strategy, in its Q3 2021 investor letter, mentioned GXO Logistics, Inc.  (NYSE: GXO) and discussed its stance on the firm. GXO Logistics, Inc. is a Greenwich, Connecticut-based global contract logistics company with a $10.5 billion market capitalization. GXO delivered a -6.60% return for the past month, and it closed at $91.83 per share on December 24, 2021.

Here is what ClearBridge Investments Value Equity Strategy has to say about GXO Logistics, Inc.  in its Q3 2021 investor letter:

“GXO Logistics was recently spun off from its parent company, XPO Logistics, to become the world’s second-largest contract logistics provider. The quality of this business is underappreciated by the market because it had been embedded within XPO and lacked visibility. We believe the stock will receive a higher valuation as its attributes become more widely recognized, including revenue growth of high single to low double digits, +90% retention rate, business visibility from multiyear contracts, and +20% return on invested capital. GXO’s superior business makeup also adds to its appeal, with 30% of sales coming from automation and robotics, compared to the industry average of 5%. E-commerce and technology drive 50% of total revenue.”

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Based on our calculations, GXO Logistics, Inc.  (NYSE: GXO) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. GXO was in 27 hedge fund portfolios at the end of the third quarter of 2021, compared to 0 funds in the previous quarter. GXO Logistics, Inc.  (NYSE: GXO) delivered an 11.85% return in the past 3 months.

In October this year, we also shared another hedge fund’s views on GXO 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.