Weak Global Auto Demand and Slow EV Transition Impacted Aptiv PLC (APTV)
ClearBridge Investments, an investment management company, released its “ClearBridge Large Cap Growth Strategy” third quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, increased volatility was caused by weak employment reports, leading to a brief correction in parts of the U.S. equity market. However, after a 50 basis point interest rate cut by the Federal Reserve, stocks rallied, with the S&P 500 Index rising by 5.89% and the small-cap Russell 2000 Index jumping by 9.27%. Leadership in equities broadened beyond the Magnificent Seven companies. In the quarter, profit-taking among large-cap companies and early signs of a possible market rotation caused growth stocks to underperform value stocks. The benchmark Russell 1000 Growth Index increased by 3.19%, falling behind the Russell 1000 Value Index, which saw a growth of 9.43%. The strategy outperformed in the quarter driven by broader participation among stable and cyclical growth positions in health care, communication services, and industrials. In addition, please check the fund’s top five holdings to know its best picks in 2024.
ClearBridge Large Cap Growth Strategy highlighted stocks like Aptiv PLC (NYSE:APTV), in the third quarter 2024 investor letter. Aptiv PLC (NYSE:APTV) designs and manufactures vehicle components. The one-month return of Aptiv PLC (NYSE:APTV) was 0.70%, and its shares lost 28.87% of their value over the last 52 weeks. On October 3, 2024, Aptiv PLC (NYSE:APTV) stock closed at $68.97 per share with a market capitalization of $16.205 billion.
ClearBridge Large Cap Growth Strategy stated the following regarding Aptiv PLC (NYSE:APTV) in its Q3 2024 investor letter:
"Lastly, we sold our position in tier 1 automotive parts supplier Aptiv PLC (NYSE:APTV). Part of our original investment thesis for Aptiv was that the company should garner a premium multiple versus competitors as its product portfolio was well-positioned to take share as auto production shifted toward electric vehicles. However, weak global auto demand and slowing mix shift toward EVs has pressured Aptiv’s business and the company is capturing share at a slower rate than we anticipated. While Aptiv has executed well on profitability and trades at a cheap valuation, we do not foresee the same level of multiple expansion as the company’s growth relative to the market remains weak."
A closeup of a hand holding a car engine component, highlighting the precision of the company's engineering.
Aptiv PLC (NYSE:APTV) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held Aptiv PLC (NYSE:APTV) at the end of the second quarter which was 38 in the previous quarter. While we acknowledge the potential of Aptiv PLC (NYSE:APTV) 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 Aptiv PLC (NYSE:APTV) and shared the list of best high short-interest 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.