What Makes Nasdaq (NDAQ) an Excellent Business?
Oakmark Funds, advised by Harris Associates, released its “Oakmark Equity and Income Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund delivered -2.19% during the quarter compared to the Lipper Balanced Fund Index’s 1.11% return. The equity portfolio returned -3.97% in the quarter, compared to 4.28% for the S&P 500 Index. The fixed-income portfolio returned 0.75%. The fund has allocated its portfolio, 58.0% in equities, 40.7% in fixed income, and 1.3% cash. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Oakmark Equity and Income Fund highlighted stocks like Nasdaq, Inc. (NASDAQ:NDAQ) in the second quarter 2024 investor letter. Headquartered in New York, New York, Nasdaq, Inc. (NASDAQ:NDAQ) is a technology company that serves capital markets and other industries. The one-month return of Nasdaq, Inc. (NASDAQ:NDAQ) was 6.14%, and its shares gained 22.90% of their value over the last 52 weeks. On July 11, 2024, Nasdaq, Inc. (NASDAQ:NDAQ) stock closed at $62.20 per share with a market capitalization of $35.86 billion.
Oakmark Equity and Income Fund stated the following regarding Nasdaq, Inc. (NASDAQ:NDAQ) in its Q2 2024 investor letter:
"Nasdaq, Inc. (NASDAQ:NDAQ) is a global technology company that provides platforms and services for capital markets and other industries. Over the past decade, under the leadership of CEO Adena Friedman, Nasdaq has transformed from a traditional equity exchange into a collection of fast-growing, high-quality software and data businesses with the majority of revenue coming from non-exchange segments. Nasdaq’s recent acquisition of Adenza led some investors to question management’s capital allocation discipline. However, we believe the subsequent share price reaction more than compensates for the risk that Nasdaq overpaid for Adenza. More importantly, the experience seems to have catalyzed a renewed focus on organic growth, debt paydown, and capital return. Despite Nasdaq’s potential for faster than average growth, high mix of recurring revenue, and impressive operating margins, the stock trades at a P/E multiple in line with the broader market. We were pleased to purchase shares in this excellent business for an average price."
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Nasdaq, Inc. (NASDAQ:NDAQ) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 42 hedge fund portfolios held Nasdaq, Inc. (NASDAQ:NDAQ) at the end of the first quarter which was 30 in the previous quarter. While we acknowledge the potential of Nasdaq, Inc. (NASDAQ:NDAQ) 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.
We discussed Nasdaq, Inc. (NASDAQ:NDAQ) in another article and shared the list of stocks with latest dividend increases. In addition, please check out our hedge fund investor letters Q2 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.