Aristotle Atlantic Partners, LLC, an investment advisor, released its “Large Cap Growth Strategy” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The U.S. equity market continued its rise to new record highs, with the S&P 500 Index increasing by 5.89% during this period. In the third quarter, Aristotle Atlantic’s Large Cap Growth Strategy delivered 1.26% gross of fees (1.11% net of fees) underperforming the Russell 1000 Growth Index’s return of 3.19%. Security selection led the portfolio to underperform in the quarter. Security selection in Information Technology and Health Care detracted the most from the relative performance while security selection in Consumer Discretionary and Real Estate detracted the least. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Aristotle Large Cap Growth Strategy highlighted stocks like The Estée Lauder Companies Inc. (NYSE:EL), in the third quarter 2024 investor letter. The Estée Lauder Companies Inc. (NYSE:EL) is a global manufacturer of skincare, makeup, fragrance, and hair care products. The one-month return of The Estée Lauder Companies Inc. (NYSE:EL) was -30.22%, and its shares lost 42.55% of their value over the last 52 weeks. On November 6, 2024, The Estée Lauder Companies Inc. (NYSE:EL) stock closed at $63.28 per share with a market capitalization of $23.768 billion.

Aristotle Large Cap Growth Strategy stated the following regarding The Estée Lauder Companies Inc. (NYSE:EL) in its Q3 2024 investor letter:

"We sold The Estée Lauder Companies Inc. (NYSE:EL), as Chinese consumer headwinds continue to present an unpredictable pace of recovery. And while Estée has taken action to reduce costs and drive a profit recovery plan, it is apparent that a certain level of volume will be necessary to make that plan successful, and that is difficult to predict with a high degree of certainty. China-driven travel retail business continues to be slower than anticipated, pushing out the expected timing of a recovery. Despite the weakness in share price, Estée continues to trade at a premium multiple, and consensus estimates may prove aggressive should Chinese consumer weakness linger. Lastly, with a pending transition in both the CFO and CEO roles, we see the potential for another reset as the new management team takes over."

A photograph of a customer testing out different products in the skincare aisle at a store.

The Estée Lauder Companies Inc. (NYSE:EL) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held The Estée Lauder Companies Inc. (NYSE:EL) at the end of the second quarter which was 51 in the previous quarter. The Estée Lauder Companies Inc.’s (NYSE:EL) fiscal first-quarter organic net sales decreased by 5%, aligning with the lower end of its forecasted range. While we acknowledge the potential of The Estée Lauder Companies Inc. (NYSE:EL) 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.