Should You Believe in the Growth Prospects of WESCO (WCC)?

Diamond Hill Capital, an investment management company, released its “Mid Cap Strategy” first-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the quarter the strategy outperformed the Russell Midcap Index. The strategy returned 9.74% (gross) and 9.55% net of fees vs 8.60% for the index. As the economy and profit growth remained strong, equity markets continued their upward trend in Q1. In addition, you can check the top 5 holdings of the strategy to know its best picks in 2024.

Diamond Hill Capital Mid Cap Strategy highlighted stocks like WESCO International, Inc. (NYSE:WCC), in the first quarter 2024 investor letter. WESCO International, Inc. (NYSE:WCC) offers business-to-business distribution, logistics services, and supply chain solutions. The one-month return of WESCO International, Inc. (NYSE:WCC) was -0.28%, and its shares gained 13.36% of their value over the last 52 weeks. On June 6, 2024, WESCO International, Inc. (NYSE:WCC) stock closed at $175.39 per share with a market capitalization of $8.915 billion.

Diamond Hill Capital Mid Cap Strategy stated the following regarding WESCO International, Inc. (NYSE:WCC) in its first quarter 2024 investor letter:

"Among our bottom individual contributors in Q1 were WESCO International, Inc. (NYSE:WCC) and Extra Space Storage. Leading industrial distributor WESCO (WCC) has experienced choppier results as the initial benefits from its Anixter merger have moderated and a cyclical showdown has highlighted some execution missteps. However, we believe that over the long term, WCC can leverage its significant scale to take market share and improve margins. The company is also well-positioned to benefit from several secular tailwinds, including electrification and re-shoring, among others."

A team of professionals operating high and medium voltage project design.

WESCO International, Inc. (NYSE:WCC) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 50 hedge fund portfolios held WESCO International, Inc. (NYSE:WCC) at the end of the first quarter which was 39 in the previous quarter. WESCO International, Inc. (NYSE:WCC) saw a 3% decrease in organic sales in the first quarter compared to the same period last year. Sequentially, sales were in line with expectations but decreased 4% organically, mostly as a result of lower volumes. While we acknowledge the potential of WESCO International, Inc. (NYSE:WCC) 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.

In another article, we discussed WESCO International, Inc. (NYSE:WCC) and shared Carillon Eagle Small Cap Growth Fund's views about 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.

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