SP Plus, Seaboard, G-III Apparel, Fiesta: 4 Small-Cap Stock Ideas From Third Avenue

SP Plus Corp (NASDAQ:SP) Has Cash Flow Stability

Aside from the apparel and food industries, Third Avenue also chose to invest in the largest parking company in the US, SP Plus Corp (NASDAQ:SP). The fund thought of it as a good investment opportunity due to its cash flow stability, economies of scale, and consolidation opportunities for stronger players. Most of all, the fund likes that the company can concentrate on improving its margins and cash flows now that the integration of its 2013 merger with Central Parking is complete.

The fund also stated that a good thing about investing in the company is that its business doesn’t need working capital. And since SP Plus’ market share is only around 10%, that gives it the option to pursue further mergers and acquisitions, and its size surely plays a great part in building brand names. Considering all of this, the fund concluded that SP Plus’ stock is worth a minimum of $30 per share, while having the potential to move higher upon growing and forming its own franchises. SP Plus shares were owned by eight of the hedge funds tracked by Insider Monkey as of the end of June.

Seaboard Corp (NYSEMKT:SEB) Has A Hidden Asset of Sorts

The last addition to the portfolio of Third Avenue’s Small-Cap Value Fund during the period was Seaboard Corp (NYSEMKT:SEB), a global agribusiness and transportation company, which is mainly involved in the businesses of pork production and ocean cargo shipping. The fund was attracted to this poorly recognized company mainly because its business is in constant demand, which helped it to establish a fantastic asset portfolio and to compound its book value at double-digit rates.

An excellent investment opportunity was developed thanks to the challenges the company faced back in 2015, when pork production grew above demand, which lowered pork prices as a consequence and affected the company’s revenue and stock price. The fund is of the opinion that Seaboard will manage to achieve double-digit returns once again, mainly because it has confidence in the Bresky family, which has been leading the company since 1918, and still owns a majority of it. Third Avenue thinks that the company also has a hidden asset of sorts in Butterball, which is just another reason why the fund thought that an investment in the company would be a great addition to its portfolio. Jim Simons‘ Renaissance Technologies owned 5,121 shares of Seaboard Corp at the end of June, valued at $14.70 million.

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