Soumya Eswaran
3 min read
In This Article:
ClearBridge Investments, an investment management company, released its “ClearBridge Large Cap Value Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The S&P 500 Index declined by -4.3% in Q1 2025 due to a tariff war and a shift away from AI-related tech stocks. Amid the tech-led sell-off, the benchmark, the Russell 1000 Value Index, outperformed its growth counterpart in the quarter. Against this backdrop, the strategy underperformed the benchmark in Q1. In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, ClearBridge Large Cap Value Strategy highlighted stocks such as Sempra (NYSE:SRE). Sempra (NYSE:SRE) is an energy infrastructure company. The one-month return of Sempra (NYSE:SRE) was 8.46%, and its shares lost 0.04% of their value over the last 52 weeks. On May 19, 2025, Sempra (NYSE:SRE) stock closed at $78.43 per share with a market capitalization of $51.15 billion.
ClearBridge Large Cap Value Strategy stated the following regarding Sempra (NYSE:SRE) in its Q1 2025 investor letter:
"One area where we’ve increased exposure in recent years is the utilities sector, where the combination of rising electricity demand, highly stable cash flows and attractive valuations has made the space overlooked relative to higher-flying AI plays. While utilities typically perform well in volatile markets, our holdings in Edison International and Sempra (NYSE:SRE) were negatively impacted by the tragic wildfires in Southern California, which caused billions of dollars in damages. Sempra’s issues were compounded by a large earnings reset due to unexpected regulatory changes in California and the company’s shift of capital toward Texas, where, while it is a higher growth market, profitability is being pressured in the short term due to higher costs. While this negatively affects near-term earnings, we believe the decision is right for the long term. We maintained positions in both companies, as we believe their valuations have been overly discounted for businesses with defensive characteristics and high-single-digit earnings growth."
A power transmission tower with a desert sunset in the background, symbolizing power and energy.
Sempra (NYSE:SRE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held Sempra (NYSE:SRE) at the end of the fourth quarter, compared to 33 in the third quarter. While we acknowledge the potential of Sempra (NYSE:SRE) 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 undervalued AI stock set for massive gains.
