ClearBridge Investments, an investment management company, released its “ClearBridge Small Cap Strategy” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The Fed’s rate cut in September contributed to a shift from large-cap generative AI winners to a broader range of market leadership, particularly in small-cap stocks. However, the strategy underperformed its benchmark in the third quarter because weaknesses in the communication services and IT sectors outweighed the strong performances in health care and consumer discretionary. In addition, please check the fund’s top five holdings to know its best picks in 2024.
ClearBridge Small Cap Strategy highlighted stocks like Stride, Inc. (NYSE:LRN), in the third quarter 2024 investor letter. Stride, Inc. (NYSE:LRN) is a technology-based education service company. The one-month return of Stride, Inc. (NYSE:LRN) was 0.32%, and its shares gained 84.09% of their value over the last 52 weeks. On January 6, 2025, Stride, Inc. (NYSE:LRN) stock closed at $106.57 per share with a market capitalization of $4.646 billion.
ClearBridge Small Cap Strategy stated the following regarding Stride, Inc. (NYSE:LRN) in its Q3 2024 investor letter:
“The consumer discretionary sector also contributed due to positive performance from stocks like Stride, Inc. (NYSE:LRN), which provides curriculum, software, and educational solutions created for online delivery to students in kindergarten through 12th grade. The company’s share price was buoyed by strong quarterly results, as it continues to attract and retain an increasing number of students, with enrollment growth continuing to surprise on the upside. In addition to its strong performance trajectory, we believe that the company’s unique offerings such as its growing Career Learning programs continue to be compelling opportunities to create further value.”
A teacher giving a lecture in a classroom illuminated by a bright light of knowledge.
Stride, Inc. (NYSE:LRN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held Stride, Inc. (NYSE:LRN) at the end of the third quarter which was 27 in the previous quarter. While we acknowledge the potential of Stride, Inc. (NYSE:LRN) 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 Stride, Inc. (NYSE:LRN) and shared the list of best education 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.
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Disclosure: None. This article is originally published at Insider Monkey.