Should You Consider Selling United Parcel Service (UPS)?

ClearBridge Investments, an investment management firm, has released its Q2 2024 investor letter “ClearBridge Large Cap Value Strategy.” A copy of the letter can be downloaded here. U.S. stocks continued their run as a growing number of “winners” focused on the market due to excitement over new weight loss drugs and artificial intelligence, while the broader market was impacted by weakening economic indicators. The Russell 1000 Value Index underperformed its growth counterpart during the quarter, returning -2.17% versus 8.34% for the Russell 1000 Growth Index. The strategy lagged its Russell 1000 Value benchmark during the quarter and saw negative contributions from nine of the 11 sectors in which it was invested on an absolute basis. Overall stock selection detracted from performance, on a relative basis. Additionally, please see the fund’s top five holdings for its top picks in 2024.

The ClearBridge Large Cap Value strategy highlighted stocks like United Parcel Service, Inc. (NYSE:UPS), in its Q2 2024 investor letter. United Parcel Service, Inc. (NYSE:UPS) is a package delivery company with a market capitalization of $116.655 billion. United Parcel Service, Inc. (NYSE:UPS) has a one-month return of -0.97%, and its shares have lost 24.81% of their value over the past 52 weeks. On July 5, 2024, United Parcel Service, Inc. (NYSE:UPS) stock closed at $136.35 per share.

ClearBridge Large Cap Value Strategy said the following about United Parcel Service, Inc. (NYSE: UPS) in its Q2 2024 investor letter:

“Our industrial holdings weighed on relative performance as we are more exposed to transportation companies such as “less-than-truckload” provider XPO and parcel delivery company United Parcel Service, Inc. (NYSE:UPS), which is battling weak volumes during the post-COVID freight downturn. With industry volumes back to pre-COVID levels and strong pricing power in the LTL sector in particular, we believe the next upcycle will prove very strong for earnings. As a result, we added to our position in XPO during the quarter while reducing our position in UPS on concerns that the sector remains overcapacity. At the same time, we are less exposed to electrical equipment stocks, which have been rewarded by views that they will benefit from the buildout of AI data centers.

A warehouse filled with parcel boxes, symbolizing the company’s reliable logistics services.

United Parcel Service, Inc. (NYSE:UPS) is not on our list of the 31 most popular stocks among hedge funds. According to our database, 43 hedge fund portfolios held United Parcel Service, Inc. (NYSE:UPS) at the end of the first quarter, down from 46 in the prior quarter. In the first quarter, United Parcel Service, Inc. (NYSE:UPS) reported consolidated revenue of $21.7 billion, down 5.3% from the first quarter of 2023. While we recognize the potential of United Parcel Service, Inc. (NYSE:UPS) as an investment, our conviction lies in the belief that AI stocks have more promise to deliver higher returns, and in a shorter time frame. If you are looking for an AI stock that is as promising as NVIDIA but is trading at less than 5x earnings, check out our report on the the cheapest AI stock.

We discussed United Parcel Service, Inc. (NYSE:UPS) in another article and shared the list of the largest publicly traded industrial companies in the United States. United Parcel Service, Inc. (NYSE:UPS) was a negative contributor to Artisan Value Fund’s performance in the first quarter of 2024. Additionally, please visit our Q2 2024 Hedge Fund Investor Letters page for more investor letters from hedge funds and other prominent investors.

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Disclosure: None. This article was originally published on Insider Monkey.