ClearBridge Investments, an investment management company, released its “ClearBridge Small Cap Strategy” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The Fed’s rate cut in September contributed to a shift from large-cap generative AI winners to a broader range of market leadership, particularly in small-cap stocks. However, the strategy underperformed its benchmark in the third quarter because weaknesses in the communication services and IT sectors outweighed the strong performances in health care and consumer discretionary. In addition, please check the fund’s top five holdings to know its best picks in 2024.
ClearBridge Small Cap Strategy highlighted stocks like Vivid Seats Inc. (NASDAQ:SEAT), in the third quarter 2024 investor letter. Vivid Seats Inc. (NASDAQ:SEAT) is an online ticket marketplace that operates in two segments, Marketplace and Resale. The one-month return of Vivid Seats Inc. (NASDAQ:SEAT) was 28.73%, and its shares lost 25.20% of their value over the last 52 weeks. On January 6, 2025, Vivid Seats Inc. (NASDAQ:SEAT) stock closed at $4.57 per share with a market capitalization of $949.4 million.
ClearBridge Small Cap Strategy stated the following regarding Vivid Seats Inc. (NASDAQ:SEAT) in its Q3 2024 investor letter:
“Additionally, Vivid Seats Inc. (NASDAQ:SEAT), which operates as an online secondary marketplace for tickets in the U.S. and Canada, came under pressure for reducing its full-year 2024 guidance due to competitors ramping up their competitive pricing. However, we have conviction in management’s stance to not pursue volume at the expense of profits, and we are encouraged by Vivid Seats exceeding market expectations for second-quarter earnings. We believe the company’s strong balance sheet will allow it to persist through its peers’ short-sighted strategies.”
A line of eager ticket buyers outside a theatre on opening night showing the demand for live events.
Vivid Seats Inc. (NASDAQ:SEAT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 14 hedge fund portfolios held Vivid Seats Inc. (NASDAQ:SEAT) at the end of the third quarter which was 24 in the previous quarter. In the third quarter, Vivid Seats Inc. (NASDAQ:SEAT) delivered $34 million of adjusted EBITDA, which was slightly higher year-over-year. While we acknowledge the potential of Vivid Seats Inc. (NASDAQ:SEAT) 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 Vivid Seats Inc. (NASDAQ:SEAT) and shared Meridian Small Cap Growth Fund’s views on the company. In addition, please check out our hedge fund investor letters Q3 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.