Is Sempra Energy (SRE) A Smart Long-Term Buy?

ClearBridge Investments, an investment management firm, published its “Large Cap Value Strategy” first quarter 2021 investor letter – a copy of which can be downloaded here. The ClearBridge Large Cap Value Strategy underperformed its Russell 1000 Value Index benchmark during the first quarter. On an absolute basis, the Strategy had gains in 10 of 11 sectors in which it was invested for the quarter. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

ClearBridge Investments, in its Q1 2021 investor letter, mentioned Sempra Energy (NYSE: SRE), and shared their insights on the company. Sempra Energy is a San Diego, California-based energy infrastructure company that currently has a $41 billion market capitalization. Since the beginning of the year, SRE delivered a 6.44% return, while its 12-month gains are up by 4.07%. As of June 07, 2021, the stock closed at $136.10 per share.

Here is what ClearBridge Investments has to say about Sempra Energy in its Q1 2021 investor letter:

“We also added to Sempra Energy at what we believe to be a very attractive valuation. We view Sempra as a best-in-class utility with regulated assets in California and Texas. Both states offer attractive regulated returns and high-single-digit growth as the states transition to renewable energy sources. Sempra is also in the process of separating its infrastructure assets that include its Mexican and liquefied natural gas operations into an entity whose value was highlighted shortly after quarter end via an announced but yet to be closed sale of a 20% stake to KKR.”

Best 5G Stocks to Buy Now


Our calculations show that Sempra Energy (NYSE: SRE) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the first quarter of 2021, Sempra Energy was in 27 hedge fund portfolios, compared to 33 funds in the fourth quarter of 2020. SRE delivered a 9.88% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage.

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