SCCM Enhanced Equity Income Called Away Its Stake in Philip Morris (PM)

Cullen Capital Management, LLC, operating under the name Schafer Cullen Capital Management, Inc. (SCCM), has released its “SCCM Enhanced Equity Income Fund” first-quarter investor letter. A copy of the letter can be downloaded here. The first quarter showed mixed results for US stocks, with the S&P 500 declining 4.3% and the Russell 1000 Value rising by 2.1%. The composite outperformed both of its benchmarks in the first quarter, and returned 5.8% (net) compared to a -3.1% return by the CBOE Buy/Write Index (BXM) and a 0.8% return by the SPDR Bloomberg High Yield Bond ETF (JNK). The gains were driven by strong outperformance in seven sectors, mainly in Information Technology, Consumer Discretionary, and Communication Services, during a reversal of the stratified equity market gains of the past two years. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its first-quarter 2025 investor letter, SCCM Enhanced Equity Income Fund highlighted stocks such as Philip Morris International Inc. (NYSE:PM). Philip Morris International Inc. (NYSE:PM) tobacco company working to deliver a smoke-free future. The one-month return of Philip Morris International Inc. (NYSE:PM) was -1.73%, and its shares have appreciated by 75.04% over the past 52 weeks. On July 1, 2025, Philip Morris International Inc. (NYSE:PM) stock closed at $177.53 per share, with a market capitalization of $276.329 billion.

SCCM Enhanced Equity Income Fund stated the following regarding Philip Morris International Inc. (NYSE:PM) in its Q1 2025 investor letter:

“Our position in Philip Morris International Inc. (NYSE:PM) was called away in the quarter. Shares of Philip Morris posted outsized returns over the past year, with a total return of 34% in 2024 and approximately 25% thus far in 2025. While we continue to view the underlying fundamentals of the company favorably, the P/E has increased to 21x earnings, at the higher end of its historical P/E multiple range.”

Philip Morris International (PM) Outperformed in 2025 as Smoke-Free Growth Accelerates

A man exhaling smoke from a cigarette indicating the use of tobacco products.

Philip Morris International Inc. (NYSE:PM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 104 hedge fund portfolios held Philip Morris International Inc. (NYSE:PM) at the end of the first quarter, which was 102 in the previous quarter. Philip Morris International Inc. (NYSE:PM) delivered double-digit organic net revenue growth of plus 10.2% in Q1 2025, reaching $9.3 billion in total.  While we acknowledge the potential of Philip Morris International Inc. (NYSE:PM) 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 undervalued AI stock set for massive gains.

In another article, we covered Philip Morris International Inc. (NYSE:PM) and shared the list of best FMCG stocks to buy. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of PM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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