Distillate Capital Partners LLC, an investment management firm, published its second-quarter 2022 investor letter – a copy of which can be downloaded here. Through the sharp sell-off in the first half of 2022, Distillate’s U.S. FSV strategy held up better than the overall market with a decline of 15.80% net of fees vs. a 19.96% decline for the S&P 500 Index. For the same period, Distillate’s Intl. FSV strategy performed roughly in line with the iShares MSCI ACWI ex-US ETF, posting a total return of -18.07% net of fees versus -18.00% for the benchmark. Meanwhile, Distillate’s U.S. SQV’s 2022 first half total return after fees of -17.22% was better than the total return for the iShares Russell 2000 ETF of -23.48% and the iShares Russell 2000 Value ETF’s total return of -17.43%. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, Distillate Capital mentioned Alphabet Inc. (NASDAQ:GOOG) and explained its insights for the company. Founded in 2015, Alphabet Inc. (NASDAQ:GOOG) is a Mountain View, California-based multinational technology conglomerate holding company with a $1.3 trillion market capitalization. Alphabet Inc. (NASDAQ:GOOG) delivered a -30.37% return since the beginning of the year, while its 12-month returns are down by -25.11%. The stock closed at $100.74 per share on September 29, 2022.
Here is what Distillate Capital has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q2 2022 investor letter:
“The largest adds were Alphabet, the parent of Google, and Meta, formerly called Facebook. Alphabet came into the portfolio at the last rebalance after Q1 2022, but was increased again as valuation improved with a decline in enterprise value despite rising free cash flow estimates. Figure 13 plots the indexed change in Alphabet’s enterprise value and free cash flow estimates since the start of the year and the overall result looks very similar to the lines for Apple on the previous page. In conjunction with the stability in cash flows highlighted earlier, this makes Alphabet look very appealing. In contrast to Alphabet, Figure 14 shows the same indexed enterprise value and rolling next-twelve-month consensus estimate for free cash flow for Amazon, and highlights how Amazon’s performance has largely followed downward revisions in its estimated profitability.”
Photo by Kai Wenzel on Unsplash
Our calculations show that Alphabet Inc. (NASDAQ:GOOG) ranks 6th on our list of the 30 Most Popular Stocks Among Hedge Funds. Alphabet Inc. (NASDAQ:GOOG) was in 153 hedge fund portfolios at the end of the second quarter of 2022, compared to 160 funds in the previous quarter. Alphabet Inc. (NASDAQ:GOOG) delivered a -10.26% return in the past 3 months.
In September 2022, we also shared another hedge fund’s views on Alphabet Inc. (NASDAQ:GOOG) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.
Disclosure: None. This article is originally published at Insider Monkey.