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Bretton Capital Management, an investment management company, released “Bretton Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. The market is experiencing a period of high returns, with two consecutive years of around 25% returns and 15 years of mid-teens returns, prompting investors to be cautious. The average stock market return is around 9-10% per year, historically, based on corporate earnings growth and dividends and buybacks. The 20 companies the fund owns are well-positioned and expected to perform well. Against this backdrop, in the fourth quarter, the fund returned -0.98% compared to 2.41% return for the S&P 500. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
In its fourth quarter 2024 investor letter, Bretton Fund emphasized stocks such as Union Pacific Corporation (NYSE:UNP). Union Pacific Corporation (NYSE:UNP) is a US-based railroad company. The one-month return of Union Pacific Corporation (NYSE:UNP) was 6.52%, and its shares lost 0.06% of their value over the last 52 weeks. On February 18, 2025, Union Pacific Corporation (NYSE:UNP) stock closed at $251.17 per share with a market capitalization of $151.779 billion.
Bretton Fund stated the following regarding Union Pacific Corporation (NYSE:UNP) in its Q4 2024 investor letter:
“The main detractor was Dream Finders, taking 1.5% off the fund, and Union Pacific Corporation (NYSE:UNP) was a minor detractor with a -0.2% impact. The rail industry has seen tepid revenue growth the past few years as higher-revenue coal volume declines and is replaced by lower-revenue intermodal volume sourced from ocean and truck carriers. Despite the growth challenge, Union Pacific managed to cut costs and grow earnings per share by 6%. The stock returned -5%.”
An intermodal container train winding through a rural landscape.
Union Pacific Corporation (NYSE:UNP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 78 hedge fund portfolios held Union Pacific Corporation (NYSE:UNP) at the end of the third quarter which was 82 in the previous quarter. Union Pacific Corporation (NYSE:UNP) reported a net income of $1.8 billion and earnings per share of $2.91 for the fourth quarter of 2024, both reflecting a 7% increase. While we acknowledge the potential of Union Pacific Corporation (NYSE:UNP) 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.