Giverny Capital Asset Management Sold Ametek (AME) Due to Valuation Gap
π Giverny Capital Asset Management exited its position in Ametek (AME) in February 2026 due to a perceived valuation gap.
π° The firm criticized Ametek's rising PE multiple of ~27x as too high relative to its long-term earnings growth rate of about 10% and ROE of 15%.
π Ametek stock closed at $231.27 per share on June 17, 2026, with a market capitalization of $53 billion.
π Hedge fund holdings of AMETEK increased to 70 portfolios in Q1 2026 from 64 in the previous quarter.
π€ Giverny expressed a preference for AI stocks over Ametek, believing other equities offer higher returns in a shorter timeframe.
π The firm's model portfolio fell 6.88% in Q1 2026 compared to the S&P 500's 4.33% decline.
Bullish Signals
- Ametek achieved a one-month return of 3.63% and gained 30.10% over the past 52 weeks as of June 17, 2026.
- The company maintains a substantial market capitalization of $53 billion, indicating strong institutional size.
Risk Factors
- Giverny Capital sold the stock because the PE multiple of ~27x was deemed too high relative to a long-term earnings growth rate of only about 10%.
- The firm noted that the current return on equity of 15% does not justify a growth stock multiple at the prevailing valuation.
Full Analysis
Giverny Capital Asset Management sold its position in Ametek (AME) in February 2026, citing a valuation gap where the stock's rising price-to-earnings multiple of approximately 27x exceeded what was justified by its long-term earnings growth rate of about 10% and return on equity of 15%. The firm exited after trimming the position in the fourth quarter, noting that while they appreciated the returns earned over six years of ownership, the current pricing did not align with fundamental metrics.
The investment manager highlighted a strategic preference for AI stocks over Ametek, suggesting that other equities offer greater promise for delivering higher returns within a shorter timeframe. Despite this exit, data indicates that 70 hedge fund portfolios held AMETEK at the end of the first quarter of 2026, an increase from 64 in the previous quarter, reflecting continued broad institutional interest despite the specific manager's departure.
Ametek closed at $231.27 per share on June 17, 2026, with a market capitalization of $53 billion and a one-month return of 3.63%. The article notes that while Giverny views the stock as having risk and potential, they believe their conviction lies elsewhere in the AI sector, though it does not explicitly detail the financial performance or operational results of Ametek itself beyond the valuation critique.