ClearBridge Investments, an investment management company, released its “ClearBridge Sustainability Leaders Strategy” second quarter 2024 investor letter. A copy of the same can be downloaded here. U.S. stocks increased during a difficult quarter for diversified portfolios due to the market leadership remaining centered around a few mega-cap firms that were thought to be the major winners in the expanding AI industry. The benchmark Russell 3000 Index returned 3.22% in the quarter. The strategy underperformed the benchmark in the second quarter and had gains in four of 10 sectors in which it was invested, on an absolute basis. Overall stock selection detracted the most, mainly stock selection in the IT, consumer discretionary, health care, industrials, and real estate sectors. Please check the top 5 holdings of the strategy, to know its best pick in 2024.
ClearBridge Sustainability Leaders Strategy highlighted stocks like Republic Services, Inc. (NYSE:RSG) in the Q2 2024 investor letter. Republic Services, Inc. (NYSE:RSG) is an environmental services provider in the United States and Canada. The one-month return of Republic Services, Inc. (NYSE:RSG) was 6.15%, and its shares gained 33.52% of their value over the last 52 weeks. On July 12, 2024, Republic Services, Inc. (NYSE:RSG) stock closed at $200.25 per share with a market capitalization of $63.065 billion.
ClearBridge Sustainability Leaders Strategy stated the following regarding Republic Services, Inc. (NYSE:RSG) in its Q2 2024 investor letter:
“We added two new names to the portfolio in the quarter. Republic Services, Inc. (NYSE:RSG) is a waste disposal company in the industrials sector whose services include non-hazardous solid waste collection, waste transfer, waste disposal, recycling and energy services. It is a stable-through-the-cycle compounder in a consolidated industry. The company’s end market is resilient, which gives us some confidence in the stability of its earnings through a recession. In the next few years, cash flow should grow at the high end of the range as Republic Services benefits from high-returning sustainability investments in polymer recycling and renewable natural gas, which also improve the company’s emission and circularity profile.
Republic Services continues to set ambitious goals around sustainability targets, such as increasing its renewable energy generation by 50% through the beneficial reuse of biogas. In addition, its 74 recycling centers process five million tons of materials per year and include a major polymers center for plastics. Notably, it is the first North American waste and recycling company with an emissions reduction goal approved by the Science-Based Targets initiative (SBTi).”
A fleet of trucks carrying recyclable materials, highlighting the company’s transfer services.
Republic Services, Inc. (NYSE:RSG) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 45 hedge fund portfolios held Republic Services, Inc. (NYSE:RSG) at the end of the first quarter which was 41 in the previous quarter. Republic Services, Inc. (NYSE:RSG) delivered revenue growth of 8%, adjusted EBITDA growth of 12%, and adjusted earnings per share of $1.45 during the first quarter 2024. While we acknowledge the potential of Republic Services, Inc. (NYSE:RSG) 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 Republic Services, Inc. (NYSE:RSG) and shared the list of biggest waste management companies in the world. 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.
