Oakmark Funds, advised by Harris Associates, released its “Oakmark Equity and Income Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund delivered 6.16% during the quarter compared to the Lipper Balanced Fund Index’s 5.55% return. The equity portfolio returned 7.30% in the quarter, compared to 5.89% for the S&P 500 Index. The fixed-income portfolio returned 5.16%. The fund has allocated 60.1% in equities, 38.4% in fixed income, and 1.5% in cash. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Oakmark Equity and Income Fund highlighted stocks like Merck & Co., Inc. (NYSE:MRK) in the third quarter 2024 investor letter. Merck & Co., Inc. (NYSE:MRK) is a healthcare company that operates through Pharmaceutical and Animal Health segments. The one-month return of Merck & Co., Inc. (NYSE:MRK) was -5.58%, and its shares lost 5.18% of their value over the last 52 weeks. On October 10, 2024, Merck & Co., Inc. (NYSE:MRK) stock closed at $109.40 per share with a market capitalization of $277.308 billion.
Oakmark Equity and Income Fund stated the following regarding Merck & Co., Inc. (NYSE:MRK) in its Q3 2024 investor letter:
“Merck & Co., Inc. (NYSE:MRK) is a global pharmaceutical firm with leading oncology, vaccine and animal health franchises. Premier products in Merck’s portfolio include Keytruda, Gardasil, Winrevair and Bravecto. Outsized contributor Keytruda is an immuno-oncology drug that treats several cancers and tumors. Keytruda is an astounding clinical and commercial success that is on track to become one of the best-selling prescription drugs to date. Investor angst surrounding Keytruda’s pending U.S. patent expiration in 2028 presented a chance to buy shares at a discounted valuation. We believe opportunities to extend Keytruda’s duration through life cycle management are underappreciated. More importantly, discounted cash flows from products already on market cover today’s entire stock price, meaning there is minimal value ascribed to a promising pipeline with strong sales potential. We believe Merck is led by a capable management team that looks to reinvest these cash flows in an accretive manner.”
A close-up of a person’s hand holding a bottle of pharmaceuticals.
Merck & Co., Inc. (NYSE:MRK) is in 29th position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 96 hedge fund portfolios held Merck & Co., Inc. (NYSE:MRK) at the end of the second quarter which was 95 in the previous quarter. While we acknowledge the potential of Merck & Co., Inc. (NYSE:MRK) 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 Merck & Co., Inc. (NYSE:MRK) and shared the list of most profitable cheap stocks to invest in. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.