May 20, 2024


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Is Group 1 Automotive (GPI) a Great Long-Term Investment Choice?

ClearBridge Investments, an investment management firm, published its “Small Cap Value Strategy” first quarter 2022 investor letter – a copy of which can be downloaded here. The ClearBridge Small Cap Value Strategy outperformed its Russell 2000 Value Index benchmark during the first quarter. On an absolute basis, the Strategy had losses across seven of the 11 sectors in which it was invested during the quarter. The leading detractors were the consumer discretionary, IT, and health care sectors, while the leading contributor was the energy sector. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, ClearBridge Investments Small Cap Value Strategy mentioned Group 1 Automotive, Inc. (NYSE:GPI) and explained its insights for the company. Founded in 1997, Group 1 Automotive, Inc. (NYSE:GPI) is a Houston, Texas-based car dealership company with a $3.1 billion market capitalization. Group 1 Automotive, Inc. (NYSE:GPI) delivered a -3.18% return since the beginning of the year, while its 12-month returns are up by 10.96%. The stock closed at $189.01 per share on May 04, 2022.

Here is what ClearBridge Investments Small Cap Value Strategy has to say about Group 1 Automotive, Inc. (NYSE:GPI) in its Q1 2022 investor letter:

“We also initiated a new position in Group 1 Automotive (NYSE:GPI), in the consumer discretionary sector. Group 1 Automotive is one of the leading auto dealership groups in the U.S. and the U.K. Through our analysis, we believe the current stock price already discounts a considerable decline in revenue and profits due to concerns about elevated used car prices and high gross margins per unit. However, we believe this does not reflect the underlying strength of the company’s diversified business line and flexible cost structure. Ultimately, we believe the company will prove more durable than the market expects and be a long-term value creator for the portfolio.”

Car Dealer, Car

Car Dealer, Car

Photo by Dieny Portinanni on Unsplash

Our calculations show that Group 1 Automotive, Inc. (NYSE:GPI) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Group 1 Automotive, Inc. (NYSE:GPI) was in 19 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 24 funds in the previous quarter. Group 1 Automotive, Inc. (NYSE:GPI) delivered a 10.43% return in the past 3 months.

In February 2022, we published an article that includes Group 1 Automotive, Inc. (NYSE:GPI) in 10 Stocks to Invest in Now According to Anthony Bozza’s Lakewood Capital. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

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