Latest news with #SouthernSunSmallCapStrategy
Yahoo
28-04-2025
- Business
- Yahoo
Live Oak Bancshares (LOB) Fell on Increased Loan Loss Provisions Amid Recession Concerns and Low-Rate Loans
SouthernSun Asset Management, LLC, an investment management firm, released its 'SouthernSun Small Cap Strategy' first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the strategy returned -11.32% on a gross basis (-11.48% net) compared to a -9.48% return for the Russell 2000 Index and -7.74% for the Russell 2000 Value Index. The strategy returned -12.55% on a gross basis (-13.21% net) for the trailing twelve months compared to -4.01% and -3.12% respectively for the indexes over the same period. In addition, please check the top 5 holdings of the strategy to know its best pick in 2025. In its first-quarter 2025 investor letter, SouthernSun Small Cap Strategy highlighted stocks such as Live Oak Bancshares, Inc. (NYSE:LOB). Headquartered in Wilmington, North Carolina, Live Oak Bancshares, Inc. (NYSE:LOB) is a bank holding company for Live Oak Banking Company that offers commercial banking products and services. The one-month return of Live Oak Bancshares, Inc. (NYSE:LOB) was -0.26%, and its shares lost 20.58% of their value over the last 52 weeks. On April 25, 2025, Live Oak Bancshares, Inc. (NYSE:LOB) stock closed at $12.49 per share with a market capitalization of $1.212 billion. SouthernSun Small Cap Strategy stated the following regarding Live Oak Bancshares, Inc. (NYSE:LOB) in its Q1 2025 investor letter: "Live Oak Bancshares, Inc. (NYSE:LOB) was a top detractor in the first quarter in the Small Cap strategy. Live Oak continues to execute well on its unique approach of lending to small businesses as evidenced by the reported $1.4 billion of loan originations in the fourth quarter, which was the second highest quarter of originations in the company's history. Management also reported continued strength in the loan pipeline and positive small business sentiment based on both government surveys as well as Live Oak's own internal surveys. The stock has been under pressure primarily due to the elevated provision for loan losses that the company has recorded in recent quarters as well as the macro environment and increased probability for a recession in the US. Much of the provision expense relates to loans originated between 2020 and 2022 when interest rates were at historically low levels. The vast majority of Live Oak's loans are floating rate, and borrowers have had to absorb the rapid increase in interest rates that occurred primarily during 2023. Approximately 70% of defaults were loans that had interest rate increases of 4% or more since origination. While Live Oak may continue to record elevated provision for loan losses for a few more quarters, we believe that recent trends are part of a normal credit cycle and not indicative of lower credit standards. We believe Live Oak's differentiated model of leveraging leading edge technology to deliver superior service to small business borrowers will allow it to create significant value to shareholders over the long-term." A close-up of financial documents on a desk, indicating the banking products that the company provides. Live Oak Bancshares, Inc. (NYSE:LOB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 12 hedge fund portfolios held Live Oak Bancshares, Inc. (NYSE:LOB) at the end of the fourth quarter, compared to 10 in the third quarter. While we acknowledge the potential of Live Oak Bancshares, Inc. (NYSE:LOB) 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. In another article, we covered Live Oak Bancshares, Inc. (NYSE:LOB) and shared the list of oversold bank 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. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
28-04-2025
- Business
- Yahoo
Here's Why SouthernSun Small Cap Strategy Added Extreme Networks (EXTR)
SouthernSun Asset Management, LLC, an investment management firm, released its 'SouthernSun Small Cap Strategy' first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the strategy returned -11.32% on a gross basis (-11.48% net) compared to a -9.48% return for the Russell 2000 Index and -7.74% for the Russell 2000 Value Index. The strategy returned -12.55% on a gross basis (-13.21% net) for the trailing twelve months compared to -4.01% and -3.12% respectively for the indexes over the same period. In addition, please check the top 5 holdings of the strategy to know its best pick in 2025. In its first-quarter 2025 investor letter, SouthernSun Small Cap Strategy highlighted stocks such as Extreme Networks, Inc. (NASDAQ:EXTR). Extreme Networks, Inc. (NASDAQ:EXTR) develops and markets network infrastructure equipment and related software. The one-month return of Extreme Networks, Inc. (NASDAQ:EXTR) was -5.59%, and its shares gained 8.14% of their value over the last three months. On April 25, 2025, Extreme Networks, Inc. (NASDAQ:EXTR) stock closed at $12.49 per share with a market capitalization of $1.658 billion. SouthernSun Small Cap Strategy stated the following regarding Extreme Networks, Inc. (NASDAQ:EXTR) in its Q1 2025 investor letter: "Extreme Networks, Inc. (NASDAQ:EXTR) was a new addition to the Small Cap strategy in the first quarter of 2025. Extreme Networks is one of the top 3 players in the networking industry. While the industry has been dominated by Cisco and Hewlett Packard (HPE), who together have >60% share, both Cisco and HPE have developed their product/ architecture with 'data-centers' in mind. However, EXTR has taken a different tact and developed their architecture with a distributed environment as their target market. We believe EXTR has the opportunity to grow revenues in the low double-digit range and disrupt the industry due to product, distribution, and pricing advantages. A customer service person helping a client with a complex network issue, illustrating the customer support of the communication equipment company. Extreme Networks, Inc. (NASDAQ:EXTR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held Extreme Networks, Inc. (NASDAQ:EXTR) at the end of the fourth quarter, compared to 29 in the third quarter. While we acknowledge the potential of Extreme Networks, Inc. (NASDAQ:EXTR) 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. In another article, we covered Extreme Networks, Inc. (NASDAQ:EXTR) and shared the list of best small cap tech 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. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
28-04-2025
- Automotive
- Yahoo
What Makes Modine Manufacturing Company (MOD) an Investment Bet?
SouthernSun Asset Management, LLC, an investment management firm, released its 'SouthernSun Small Cap Strategy' first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the strategy returned -11.32% on a gross basis (-11.48% net) compared to a -9.48% return for the Russell 2000 Index and -7.74% for the Russell 2000 Value Index. The strategy returned -12.55% on a gross basis (-13.21% net) for the trailing twelve months compared to -4.01% and -3.12% respectively for the indexes over the same period. In addition, please check the top 5 holdings of the strategy to know its best pick in 2025. In its first-quarter 2025 investor letter, SouthernSun Small Cap Strategy highlighted stocks such as Modine Manufacturing Company (NYSE:MOD). Modine Manufacturing Company (NYSE:MOD) offers thermal management products and solutions. The one-month return of Modine Manufacturing Company (NYSE:MOD) was 5.71%, and its shares lost 15.08% of their value over the last 52 weeks. On April 25, 2024, Modine Manufacturing Company (NYSE:MOD) stock closed at $81.13 per share with a market capitalization of $4.265 billion. SouthernSun Small Cap Strategy stated the following regarding Modine Manufacturing Company (NYSE:MOD) in its Q1 2025 investor letter: "Modine Manufacturing Company (NYSE:MOD) is an over 100-year-old thermal management company based in Racine, WI. The company started out producing heat exchangers for tractors but quickly expanded into the automotive market and became a major supplier of heat exchangers to leading car manufacturers. As demand for automobiles increased significantly throughout the 20th century, Modine expanded operations globally. However, as the automotive market matured and became more competitive, MOD's growth slowed, and the company went through numerous restructurings to take cost out of the business. The company attempted to diversify into the HVAC industry by buying Airedale in 2005 and Luvata in 2016, but management lacked a clear strategic vision, and the legacy automotive business continued to attract most of the time and resources. A technician in a factory, assembling a gas-fired unit heater. Modine Manufacturing Company (NYSE:MOD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 43 hedge fund portfolios held Modine Manufacturing Company (NYSE:MOD) at the end of the fourth quarter, compared to 32 in the third quarter. While we acknowledge the potential of Modine Manufacturing Company (NYSE:MOD) 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. In another article, we covered Modine Manufacturing Company (NYSE:MOD) and shared the list of best guru stocks to buy according to Wall Street analysts. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
28-04-2025
- Business
- Yahoo
What Makes The Timken Company (TKR) a Compelling Long-Term Investment?
SouthernSun Asset Management, LLC, an investment management firm, released its 'SouthernSun Small Cap Strategy' first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the strategy returned -11.32% on a gross basis (-11.48% net) compared to a -9.48% return for the Russell 2000 Index and -7.74% for the Russell 2000 Value Index. The strategy returned -12.55% on a gross basis (-13.21% net) for the trailing twelve months compared to -4.01% and -3.12% respectively for the indexes over the same period. In addition, please check the top 5 holdings of the strategy to know its best pick in 2025. In its first-quarter 2025 investor letter, SouthernSun Small Cap Strategy highlighted stocks such as The Timken Company (NYSE:TKR). The Timken Company (NYSE:TKR) is a leader in engineered bearings and industrial motion products. The one-month return of The Timken Company (NYSE:TKR) was -9.63%, and its shares lost 25.09% of their value over the last three months. On April 25, 2025, The Timken Company (NYSE:TKR) stock closed at $64.95 per share with a market capitalization of $4.561 billion. SouthernSun Small Cap Strategy stated the following regarding The Timken Company (NYSE:TKR) in its Q1 2025 investor letter: "The Timken Company (NYSE:TKR), a global leader in engineered bearings and industrial motion products, was a top contributor in the first quarter. Organic revenue declined 3%, largely due to softer demand in Europe, and adjusted EBITDA fell 9% — a slightly better result than expected, aided by cost-saving initiatives. Demand for TKR's wind turbine bearings in China has finally stabilized and changes made to the product to lower cost have helped regain market share and increase profitability. Management remains cautious on the 2025 demand outlook and is proactively targeting approximately $75 million in cost reductions through workforce adjustments and accelerated footprint optimization. Separately, the company announced that its CEO, who had been in the role for just six months, would be stepping down. Following conversations with the company, we believe the decision was driven by personal reasons rather than performance or strategic misalignment. The former CEO, Rich Kyle, has returned as interim CEO while the board conducts a search for a permanent successor. While near-term challenges persist—including softness in certain end markets, tariff headwinds, and a leadership transition, we believe TKR remains a compelling long-term investment. The company's diversified portfolio of niche, market-leading engineered bearings and industrial motion products, solid financial flexibility (net debt/EBITDA of 2x), and attractive valuation at a low double-digit multiple of EPS support our positive outlook." A close-up of a precision-engineered bearing from the company, gleaming in the light. The Timken Company (NYSE:TKR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held The Timken Company (NYSE:TKR) at the end of the fourth quarter, compared to 25 in the third quarter. The Timken Company (NYSE:TKR) reported $1.07 billion in revenues for the fourth quarter of 2024, which was down 1.6% from last year. While we acknowledge the potential of The Timken Company (NYSE:TKR) 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. In another article, we covered The Timken Company (NYSE:TKR) and shared the list of Jim Cramer's latest stock moves. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
Yahoo
28-04-2025
- Business
- Yahoo
Here's What Affected Boot Barn Holdings (BOOT) in Q1
SouthernSun Asset Management, LLC, an investment management firm, released its 'SouthernSun Small Cap Strategy' first quarter 2025 investor letter. A copy of the letter can be downloaded here. In the first quarter, the strategy returned -11.32% on a gross basis (-11.48% net) compared to a -9.48% return for the Russell 2000 Index and -7.74% for the Russell 2000 Value Index. The strategy returned -12.55% on a gross basis (-13.21% net) for the trailing twelve months compared to -4.01% and -3.12% respectively for the indexes over the same period. In addition, please check the top 5 holdings of the strategy to know its best pick in 2025. In its first-quarter 2025 investor letter, SouthernSun Small Cap Strategy highlighted stocks such as Boot Barn Holdings, Inc. (NYSE:BOOT). Boot Barn Holdings, Inc. (NYSE:BOOT) is a lifestyle retail chain that offers western and work-related footwear, apparel, and accessories. The one-month return of Boot Barn Holdings, Inc. (NYSE:BOOT) was -4.51%, and its shares lost 6.56% of their value over the last 52 weeks. On April 25, 2025, Boot Barn Holdings, Inc. (NYSE:BOOT) stock closed at $102.59 per share with a market capitalization of $3.139 billion. SouthernSun Small Cap Strategy stated the following regarding Boot Barn Holdings, Inc. (NYSE:BOOT) in its Q1 2025 investor letter: "Boot Barn Holdings, Inc. (NYSE:BOOT) was the top detractor in the Small Cap strategy after a very strong performance in 2024. In our opinion, BOOT's results have been excellent when looking back over longer periods of time. Over the last 5 years, their EBITDA/share has grown at a 23% CAGR. In our opinion, the stock has been hit hard recently by concerns about the health of the consumer and concerns about rising costs due to tariffs on imports. The company imports approximately 30% of their products from China; however, management expects to be able to offset the impact of tariffs with pricing, and they believe that their competitors will face similar challenges. As we look forward, we believe BOOT has a strong market position, robust growth plans for new stores, a track record of improving margins, and a clean balance sheet." A farmer standing in a sun-drenched field wearing overalls and a rugged pair of western-style boots. Boot Barn Holdings, Inc. (NYSE:BOOT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 29 hedge fund portfolios held Boot Barn Holdings, Inc. (NYSE:BOOT) at the end of the fourth quarter compared to 29 in the third quarter. In the third quarter of fiscal 2025, Boot Barn Holdings, Inc.'s (NYSE:BOOT) net sales increased 16.9% to $608 million. While we acknowledge the potential of Boot Barn Holdings, Inc. (NYSE:BOOT) 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. In another article, we covered Boot Barn Holdings, Inc. (NYSE:BOOT) and shared the list of Wasatch Small Cap Growth Strategy's views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks. Disclosure: None. This article is originally published at Insider Monkey.
