ClearBridge Investments, an investment management firm, has released its “ClearBridge Sustainability Leaders Strategy” Q2 2024 investor letter. A copy of the letter can be downloaded here. US stocks rallied in a challenging quarter for diversified portfolios as the market continued to lead around a handful of mega-cap companies that were seen as major winners in the expanding AI industry. The benchmark Russell 3000 index returned 3.22% for the quarter. The strategy underperformed its benchmark in Q2, gaining on an absolute basis in four of the 10 sectors it invested in. Overall stock selection was the most negative, mainly in IT, consumer discretionary, healthcare, industrials and real estate sectors. Check out the top five stocks in this strategy to know the best picks for 2024.
ClearBridge Sustainability Leaders Strategy covered stocks such as Republic Services, Inc. (NYSE:RSG) in their Q2 2024 investor letter. Republic Services, Inc. (NYSE:RSG) is an environmental services provider in the United States and Canada. Republic Services, Inc. (NYSE:RSG)’s one-month return was 6.15%, and the company’s shares were up 33.52% over the past 52 weeks. On July 12, 2024, Republic Services, Inc. (NYSE:RSG)’s stock price closed at $200.25 per share, giving it a market capitalization of $63.065 billion.
In its Q2 2024 investor letter, ClearBridge Sustainability Leaders Strategy said the following about Republic Services, Inc. (NYSE:RSG):
“We added two new stocks to our portfolio this quarter. Republic Services Inc. (NYSE:RSG) is an industrial waste management company whose services include non-hazardous solid waste collection, waste transportation, waste disposal, recycling, and energy services. It is a stable compounder through economic cycles in an integrated industry. The company’s end markets are resilient, giving it some confidence in stable revenues even during economic downturns. Over the next few years, Republic Services should benefit from high-return sustainability investments in polymer recycling and renewable natural gas, which will also improve the company’s emissions and circularity profile, so cash flow should grow at the high end of the range.
Republic Services continues to set ambitious sustainability goals, including increasing renewable energy generation by 50% through beneficial reuse of biogas. Additionally, the company’s 74 recycling centers process 5 million tons of materials annually, including a large polymer center for plastics. Notably, the company is the first waste and recycling company in North America to have emissions reduction targets approved by the Science Based Targets initiative (SBTi).
A convoy of trucks carrying recyclable materials, highlighting the company’s transportation services.
Republic Services, Inc. (NYSE:RSG) is not included in our list of the 31 most popular stocks among hedge funds. According to our database, 45 hedge funds had Republic Services, Inc. (NYSE:RSG) in their portfolios at the end of the first quarter, up from 41 in the previous quarter. Republic Services, Inc. (NYSE:RSG) delivered 8% revenue growth, 12% adjusted EBITDA growth and $1.45 adjusted earnings per share growth in the first quarter of 2024. While we see potential in Republic Services, Inc. (NYSE:RSG) as an investment, we believe AI stocks have a better chance of delivering higher returns in a shorter time frame. If you are looking for AI stocks that are as promising as NVIDIA but trade for less than 5x its revenue, check out our report. Cheapest AI Stocks.
In another article, we covered Republic Services, Inc. (NYSE:RSG) and shared a list of the largest waste management companies in the world. Additionally, you can find more investor letters from hedge funds and other leading investors on our Hedge Fund Investor Letters Q2 2024 page.
Read next: Michael Burry is selling these shares. and A new dawn dawns for US stocks.
Disclosures: None. This article originally appeared on Insider Monkey.
