Giverny Capital Asset Management, LLC, an investment management company, recently published its second-quarter 2023 investor letter. A copy of the same can be downloaded here. The firm’s model portfolio appreciated 7.92%, net of fees in the second quarter compared to an 8.74% return for the Standard & Poor’s 500 Index. Year-to-date, the portfolio returned 14.46% compared to 16.89% for the Index. Since inception, the portfolio generated an annualized performance of 17.4%, net of fees, vs. 20.1% for the Index. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Giverny Capital Asset Management highlighted stocks like Alphabet Inc. (NASDAQ:GOOG) in the second quarter 2023 investor letter. Headquartered in Mountain View, California, Alphabet Inc. (NASDAQ:GOOG) is a multinational technology company. On August 24, 2023, Alphabet Inc. (NASDAQ:GOOG) stock closed at $130.42 per share. One-month return of Alphabet Inc. (NASDAQ:GOOG) was 0.42%, and its shares gained 10.81% of their value over the last 52 weeks. Alphabet Inc. (NASDAQ:GOOG) has a market capitalization of $1.639 trillion.
Giverny Capital Asset Management made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its second quarter 2023 investor letter:
“I have believed for a while that we’re better served with a lower weight to the tech giants – we own Alphabet Inc. (NASDAQ:GOOG) (8.1% of our model portfolio at the end of June) and Meta (5.2%) for a 13.3% exposure, or about half the Index’s weight in the giants. And while Alphabet’s 36% return for the first half and Meta’s 138% return were gratefully received, I’m pleased to report that if we strip out that contribution to our overall return, the other 23 stocks we own, constituting 85% of our portfolio (with cash making up the balance), were up 10.2% on a weighted basis.
GCAM owns two of the seven tech mega caps in Alphabet and Meta, and they enjoyed similar rises. As mentioned, Alphabet A&C shares rose 36% while Meta rose 138%. Together, they added 2.38 percentage points to the overall Index return, meaning these seven tech giants cumulatively generated 12.4 percentage points of return, or roughly three-quarters of the Index’s return.
Alphabet and Meta combined sport a $2.25 trillion market cap and between them should generate roughly $120 billion of pretax profit this year. That’s a multiple of 19 times pretax profit, a substantial discount to Microsoft and Apple, and an even larger discount to Amazon, Nvidia and Tesla.”
Photo by Kai Wenzel on Unsplash
Alphabet Inc. (NASDAQ:GOOG) is in 6th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 152 hedge fund portfolios held Alphabet Inc. (NASDAQ:GOOG) at the end of second quarter which was 155 in the previous quarter.
We discussed Alphabet Inc. (NASDAQ:GOOG) in another article and shared Vulcan Value Partners’ views on the company. In addition, please check out our hedge fund investor letters Q2 2023 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.
