2. Marsh & McLennan Companies, Inc. (NYSE:MMC)
Number of Hedge Fund Holders: 52
Marsh & McLennan Companies, Inc. (NYSE:MMC) is a professional services company that offers advice and solutions to clients across the globe in the fields of risk, strategy, and people. The company is divided into two main segments – Risk and Insurance Services, and Consulting. The Risk and Insurance Services segment provides various risk management services, including risk advice, transfer, and control, as well as insurance and reinsurance broking, advisory, and analytics solutions.
On April 20, Marsh & McLennan Companies, Inc. (NYSE:MMC) reported a Q1 non-GAAP EPS of $2.53 and a revenue of $5.9 billion, outperforming Wall Street estimates by $0.06 and $40 million, respectively.
Gregory Peters, an analyst at Raymond James, increased the price target on Marsh & McLennan Companies, Inc. (NYSE:MMC) on April 21 from $185 to $195 and maintained an Outperform rating on the shares. The analyst thinks that Marsh & McLennan Companies, Inc. (NYSE:MMC) is better positioned to report organic revenue growth than Aon, and if the company’s cost-saving measures are combined with this growth, it could result in more potential margin expansion.
According to Insider Monkey’s fourth quarter database, 52 hedge funds were bullish on Marsh & McLennan Companies, Inc. (NYSE:MMC), compared to 55 funds in the prior quarter. Ric Dillon’s Diamond Hill Capital is the biggest stakeholder of the company, with 1.7 million shares worth $287.7 million.
ClearBridge All Cap Growth Strategy made the following comment about Marsh & McLennan Companies, Inc. (NYSE:MMC) in its Q4 2022 investor letter:
“We increased our financials exposure with Marsh & McLennan Companies, Inc. (NYSE:MMC), which is the world’s largest insurance broker and operates two consulting businesses, Mercer and Oliver Wyman. The company benefits from attractive insurance industry dynamics, durable underlying revenue drivers and a strong margin/free cash flow profile. MMC has demonstrated the ability to grow revenue in excess of GDP growth, particularly during periods of strong property & casualty commercial industry pricing like the current environment, while experiencing more modest revenue declines than overall GDP during past recessions. The insurance brokerage segment does not take underwriting risk but instead earns fees and commissions based on services provided, resulting in low capital intensity and strong free cash flow generation. In aggregate, we believe MMC’s business will be durable during recessionary periods. Risks include a valuation on the higher end of the stock’s historical range, limited exposure to changes in GDP growth and the likelihood that shares would lag balance sheet intensive financials in a rebound.”
