ClearBridge Investments, an investment management company, released its “ClearBridge Large Cap Value Strategy” second quarter 2024 investor letter. A copy of the letter can be downloaded here. US equities continued the journey as the growing number of “winners” concentrated in the market due to the excitement surrounding new weight loss medications and artificial intelligence, while the overall market was being affected by weakening economic indicators. The Russell 1000 Value Index underperformed its growth counterpart in the quarter, returning -2.17% to the Russell 1000 Growth Index’s 8.34% return. The strategy lagged behind its Russell 1000 Value Index benchmark during the quarter and had negative contributions from nine of the 11 sectors it was invested, on an absolute basis. Overall stock selection detracted from the performance, relatively. In addition, please check the fund’s top five holdings to know its best picks in 2024.
ClearBridge Large Cap Value Strategy highlighted stocks like Nestlé S.A. (OTC:NSRGY), in the second quarter 2024 investor letter. Nestlé S.A. (OTC:NSRGY) is a food and beverage company. The one-month return of Nestlé S.A. (OTC:NSRGY) was -3.02%, and its shares lost 12.83% of their value over the last 52 weeks. On July 5, 2024, Nestlé S.A. (OTC:NSRGY) stock closed at $103.44 per share with a market capitalization of $271.013 billion.
ClearBridge Large Cap Value Strategy stated the following regarding Nestlé S.A. (OTC:NSRGY) in its Q2 2024 investor letter:
“Portfolio adjustments were modest during the quarter as we maintain our thesis on most of our holdings despite near-term sentiment. We continued to build out our position in Nestlé S.A. (OTC:NSRGY), which we initiated late in the first quarter. Nestle is a large global manufacturer of foods and beverages with a high-quality portfolio of brands across many categories. It is especially strong in pet care, coffee and nutritional beverages, which are all advantaged categories enjoying superior growth. Recently, Nestle stumbled with an enterprise resource planning (ERP) transition in its health science division, resulting in missed orders and a period of out of stocks in some of its U.S. vitamins, minerals and supplements. This drove negative revisions in guidance, and (along with overall sector sentiment) caused the stock to sell off to levels not seen since 2019. Our research shows that the disruptions from the ERP transition are temporary, and Nestle’s brand portfolio should offer consistent mid-single-digit revenue growth, which should merit a re-rating back to a premium multiple versus the lower-growth food and beverage group. Following the selloff, the stock is trading at an attractive valuation.”
A filled shopping cart with popular food and beverage items.
Nestlé S.A. (OTC:NSRGY) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 4 hedge fund portfolios held Nestlé S.A. (OTC:NSRGY) at the end of the first quarter which was 5 in the previous quarter. While we acknowledge the potential of Nestlé S.A. (OTC:NSRGY) 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 addition, please check out our hedge fund investor letters Q2 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.
