L1 Capital, an investment management firm, released its “L1 Capital International Fund” fourth quarter 2022 investor letter, a copy of the same can be downloaded here. In the fourth quarter, the L1 Capital International Fund returned 1.7% compared to its benchmark which had a 4.4% return for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
In its Q3 2022 investor letter, L1 Capital International Fund 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 14.07% return since the beginning of the year, while its 12-month returns are down by -22.37%. The stock closed at $101.21 per share on January 23, 2023.
Here is what L1 Capital International Fund has to say about Alphabet Inc. (NASDAQ:GOOG) in its Q3 2022 investor letter:
“Two companies, Amazon.com (Amazon) and Alphabet Inc. (NASDAQ:GOOG), detracted more than 0.5% (in AUD) from the Fund’s returns. Both companies reported Q3 2022 quarterly results that were modestly below our expectations. Alphabet’s share price was impacted by concerns that macroeconomic pressures will impact advertising spend, increased commentary that Alphabet’s core search business could be disrupted by open artificial intelligence technologies, particularly from OpenAI’s ChatGPT chatbot (Microsoft is rumoured to be investing $10 billion in OpenAI with the aim of incorporating the technology into Bing, Word and email). Alphabet’s growth in employee numbers is also expected to pressure profitability in a more subdued economic environment.
We have allowed for a softening in advertising in our base case expectations and believe Alphabet’s management will be under increasing pressure to take action to manage its cost base, as many other technology businesses have already done, including Amazon. Disruption to search remains an issue to monitor. However, we consider Alphabet to be at the forefront of developments in artificial intelligence and well placed to defend its core franchise.”
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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 156 hedge fund portfolios at the end of the second quarter of 2022, compared to 153 funds in the previous quarter. Alphabet Inc. (NASDAQ:GOOG) delivered a -1.71% return in the past 3 months.
In January 2023, 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 Q4 2022 page.
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Disclosure: None. This article is originally published at Insider Monkey.