Cooper Investors, an investment management firm, released its “Cooper Investors Global Equities Fund” second quarter 2023 investor letter. A copy of the same can be downloaded here. The fund returned 4.71% in the second quarter, compared to a 6.29% return for the benchmark MSCI ACWI. For the 12 months to 30 June, the portfolio returned 13.65% compared to the benchmark’s 14.64% return. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Cooper Investors Global Equities Fund highlighted stocks like CDW Corporation (NASDAQ:CDW) in the second quarter 2023 investor letter. Headquartered in Vernon Hills, Illinois, CDW Corporation (NASDAQ:CDW) provides information technology (IT) solutions. On July 25, 2023, CDW Corporation (NASDAQ:CDW) stock closed at $190.94 per share. One-month return of CDW Corporation (NASDAQ:CDW) was 7.47%, and its shares gained 12.25% of their value over the last 52 weeks. CDW Corporation (NASDAQ:CDW) has a market capitalization of $25.736 billion.
Cooper Investors Global Equities Fund made the following comment about CDW Corporation (NASDAQ:CDW) in its second quarter 2023 investor letter:
“Retail cosmetics store roll-out Ulta Beauty and IT value-added reseller CDW Corporation (NASDAQ:CDW) are both leaders in their fields with substantial long duration opportunities to keep growing at attractive incremental rates of return. They have strong management teams who are focused on maximising the long-term value of their businesses through sensible and disciplined capital allocation. However both enjoyed a period of overearning through the pandemic, with CDW benefitting from abnormally high IT spend and Ulta seeing demand spike for beauty products as consumers emerged from their lockdown cocoons. As the normalisation of these trends produce an air pocket in demand management adjusted full year expectations and both shares sold off sharply; Ulta fell almost 30% in May, from $560 to $400, while CDW fell 25% between February and May, from $215 to $160.
CDW is a reseller of IT equipment, software and services to US corporates, effectively clipping a ticket on every dollar of IT spend going through the enterprise. We have grown to admire these types of speciality value-added distributors. We see similarities between IT reselling and insurance broking, an area we have long invested in; both industries see the middleman assisting customers to navigate a complex landscape where the underlying product set is consistently evolving. Significant value is offered to vendors in the ecosystem as IT resellers provide a cost-effective route to market, particularly for smaller customers.
CDW have grown nicely at high-single to low-double digit rates over the long term and as an asset light business generate excellent returns at >20% of invested capital (including acquired intangibles). With significant IT spend in FY20 through FY22 backing into the economic uncertainty today, this year will be slower as procurement gatekeepers delay decision making. As a critical trusted adviser to IT managers who are dealing with rising complexity (Cloud, Cyber Security, and now AI), we do not expect soggy operating trends to linger, meaning there is a brief opportunity to invest in a high-quality compounder leveraged to long term IT complexity at a decent discount to market.”
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CDW Corporation (NASDAQ:CDW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our records, 33 hedge fund portfolios held CDW Corporation (NASDAQ:CDW) at the end of first quarter which was 36 in the previous quarter.
We discussed CDW Corporation (NASDAQ:CDW) in another article and shared Wedgewood Partners’ insights 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.
