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Will Aptiv (APTV) Benefit from AutoCycle Rebounds?

Soumya Eswaran
·3-min read

ClearBridge Investments, an investment management firm, released its first-quarter 2024 “Mid Cap Strategy” investor letter. A copy of the same can be downloaded here. Large-cap AI beneficiaries led markets in the first quarter, with the Russell 1000 Index returning 10.30%. Meanwhile, midcaps saw a boost from a wider market, with the Russell Midcap Index gaining 8.60%. The Strategy underperformed its Russell Midcap Index benchmark in the first quarter. The strategy gained across nine of the 11 sectors in which it was invested, on an absolute basis. Industrials and financials sectors were the leading contributors while consumer discretionary and IT sectors detracted. Overall stock selection and sector allocation effects detracted from performance on a relative basis. In addition, please check the fund’s top five holdings to know its best picks in 2024.

ClearBridge Mid Cap Strategy highlighted stocks like Aptiv PLC (NYSE:APTV), in the first quarter 2024 investor letter. Aptiv PLC (NYSE:APTV) designs and manufactures vehicle components. The one-month return of Aptiv PLC (NYSE:APTV) was -17.59%, and its shares lost 33.06% of their value over the last 52 weeks. On June 26, 2024, Aptiv PLC (NYSE:APTV) stock closed at $67.54 per share with a market capitalization of $18.375 billion.

ClearBridge Mid Cap Strategy stated the following regarding Aptiv PLC (NYSE:APTV) in its first quarter 2024 investor letter:

"Stock selection in the consumer discretionary sector was the leading detractor from relative performance, driven by idiosyncratic issues within a handful of holdings. Automotive parts supplier Aptiv PLC (NYSE:APTV) faced pressure as headwinds to the broader auto-cycle and a slowing in electric vehicle adoption weighed on margins. However, we believe that the company's above-market growth, combined with opportunity for margin expansion, are compelling at its current valuation as the auto-cycle rebounds."

A closeup of a hand holding a car engine component, highlighting the precision of the company's engineering.

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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 first quarter which was 39 in the previous quarter. The first quarter revenue of Aptiv PLC (NYSE:APTV) was $4.9 billion, up 2% from Q1 2023. 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.

We discussed Aptiv PLC (NYSE:APTV) in another article and shared Ariel Global Fund's views on the company. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.