Bernzott Capital Advisors recently released its Q1 2020 Investor Letter, a copy of which you can download below. The fund posted a return of -32.76% (net) for the quarter, outperforming its benchmark, the Russell 2000 Value Index which returned -35.66% in the same quarter. You should check out Bernzott Capital Advisors top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.
In the said letter, Bernzott Capital Advisors highlighted a few stocks and SP Plus Corp (NASDAQ:SP) is one of them. SP Plus facilitates the movement of vehicles, people, and personal belongings. Year-to-date, SP stock lost 60.6% and on May 13th it had a closing price of $16.73. Its market cap is of $384.7 million. Here is what Bernzott Capital Advisors said:
“SP Plus (SP): SP, a provider of parking management, ground transportation, baggage, and other ancillary services, ended 2019 by setting the foundation for organic growth in the 3-4% range, a goal set by the company last year. The stock price in 1Q20 suffered significantly. Coronavirus put a huge dampener on the travel industry. While SP is not in the travel business, the services it provides are directly affected by a slowdown in auto and air travel. SP provides parking management services to daily use lots and one-time large events. Both of these markets have been affected by the “shelter-in-place” declarations across the country. Additionally, a major part of SP’s Bags division is the remote airline check-in systems at large airports which has seen a material decrease in demand over the past two months. We are unconcerned by the 1% organic growth in 4Q19 and believe the 3-4% growth goal is reasonable, especially considering the continued growth and cross-selling opportunities of the Bags business. The stock price had increased 40% over the nine months prior to reporting 4Q19 results, so a slight disappointment in 4Q revenue likely sent some profit-takers to the sidelines. We recognize the short-term impact the travel and event slowdown will have on SP, but once the economy returns to normal expect the company to experience success in generating new business in several verticals. The long-term drivers of revenue should enable SP to achieve sustainable gross profit growth. We maintained our full position in the company.”
In Q3 2019, the number of bullish hedge fund positions on SP stock decreased by about 15% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with SP’s upside potential.
Disclosure: None. This article is originally published at Insider Monkey.
