Renaissance Investment Management, an investment management company, released its Q4 2024 “Large Cap Growth Strategy” investor letter. A copy of the letter can be downloaded here. US stocks delivered robust results in the fourth quarter with the S&P 500 reporting positive results for the fifth consecutive quarter. The stocks rose after Trump’s election due to optimism for corporate earnings growth, but December’s hawkish Fed comments dampened enthusiasm by lowering rate cut expectations for 2025. In the fourth quarter, the Russell 1000 Growth gained +7.1%, compared to a 2.4% return for the S&P 500. Large-cap stocks outperformed both mid and small-cap stocks, and Growth significantly outperformed Value. The returns were largely driven by a small group of mega-cap technology companies, as interest in AI-related stocks remains strong. Against this backdrop, the strategy outperformed the S&P 500 and underperformed the Russell 1000 Growth in the fourth quarter. For more information on the fund’s best picks in 2024, please check its top five holdings.
In its fourth quarter 2024 investor letter, Renaissance Large Cap Growth Strategy emphasized stocks such as WEX Inc. (NYSE:WEX). WEX Inc. (NYSE:WEX) is a commerce platform operator that offers payment processing and information management solutions. The one-month return of WEX Inc. (NYSE:WEX) was -1.13%, and its shares lost 34.61% of their value over the last 52 weeks. On March 27, 2025, WEX Inc. (NYSE:WEX) stock closed at $155.32 per share with a market capitalization of $6.029 billion.
Renaissance Large Cap Growth Strategy stated the following regarding WEX Inc. (NYSE:WEX) in its Q4 2024 investor letter:
“Conversely, we sold our position in WEX Inc. (NYSE:WEX) following a deterioration in fundamental factors. The stock has been under pressure following several quarters of disappointing operating results, with the company citing macroeconomic volatility and higher fuel prices affecting consumer spending behavior, leading to a deceleration in transactional volume growth. Meanwhile operating expenses remain elevated, pressuring core margins, while the loss of a large customer earlier in the year continues to create growth headwinds for the company. We believe that the prudent decision was to step aside until we see evidence of stabilization or improvement in operating metrics.”
An executive standing in front of a large monitor that shows payment processing information.
WEX Inc. (NYSE:WEX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held WEX Inc. (NYSE:WEX) at the end of the fourth quarter compared to 29 in the third quarter. In the fourth quarter, WEX Inc. (NYSE:WEX) generated $637 million in revenue, representing a 4% decrease year-over-year. While we acknowledge the potential of WEX Inc. (NYSE:WEX) 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.
We covered WEX Inc. (NYSE:WEX) in another article, where we shared Janus Henderson Enterprise Fund’s views on the company in the previous quarter. 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.