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 Genuine Parts Company (NYSE:GPC) in the third quarter 2024 investor letter. Genuine Parts Company (NYSE:GPC) is an automotive replacement parts, and industrial parts and materials distributor. The one-month return of Genuine Parts Company (NYSE:GPC) was -2.85%, and its shares lost 9.25% of their value over the last 52 weeks. On October 10, 2024, Genuine Parts Company (NYSE:GPC) stock closed at $133.44 per share with a market capitalization of $18.591 billion.
Oakmark Equity and Income Fund stated the following regarding Genuine Parts Company (NYSE:GPC) in its Q3 2024 investor letter:
“Genuine Parts Company (NYSE:GPC) is a distributor of automotive and industrial replacement parts. The company primarily operates under the NAPA brand name in the automotive market and Motion Industries in the industrials market. The two business segments address different end markets but share some attractive traits. In both markets, the majority of sales are replacement parts, which leads to steady demand and dampened cyclicality. Customers often prioritize speed and service over price, which promotes a rational competitive pricing environment. Additionally, both markets are fragmented, with GPC representing one of a handful of scale players competing against a long tail of independent operators. The NAPA ecosystem, which includes nearly 2,000 company-owned stores and nearly 4,800 independently owned stores in North America, is a difficult-to-replicate asset that offers broad coverage nationwide. We see opportunity for the store base to operate more efficiently as management’s recent investments start to bear fruit. Motion Industries is the clear leader in its niche with roughly twice the revenue base of the closest direct competitor, and it differentiates itself via its technical salesforce and network density. Historically, GPC has consistently earned high returns on capital and supplements solid organic growth with value-accretive tuck-in acquisitions. The stock trades at a sizeable P/E discount to peers and the broader market, which we view as an attractive entry point.”
A line of mechanics diagnosing a recreation vehicle engine at a repair shop.
Genuine Parts Company (NYSE:GPC) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held Genuine Parts Company (NYSE:GPC) at the end of the second quarter which was 36 in the previous quarter. While we acknowledge the potential of Genuine Parts Company (NYSE:GPC) 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 Genuine Parts Company (NYSE:GPC) and shared the list of the best dividend stocks of all time. 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.