Tourlite Capital Management, an investment management company, released its fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, Tourlite Fund Founder Class returned 3.4% compared to a 7.6% return for the S&P 500 Index. Since its inception in April 2022, the fund returned 5.0% compared to a -14.2% decline for the S&P 500 Index. The fundamental long/short portfolio of the fund performed well in 2022. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
Tourlite Capital Management highlighted stocks like APi Group Corporation (NYSE:APG) in the Q4 2022 investor letter. Headquartered in New Brighton, Minnesota, APi Group Corporation (NYSE:APG) is a safety, specialty, and industrial services provider. On January 23, 2023, APi Group Corporation (NYSE:APG) stock closed at $20.62 per share. One-month return of APi Group Corporation (NYSE:APG) was 12.07%, and its shares lost 5.80% of their value over the last 52 weeks. APi Group Corporation (NYSE:APG) has a market capitalization of $4.823 billion.
Tourlite Capital Management made the following comment about APi Group Corporation (NYSE:APG) in its Q4 2022 investor letter:
“APi Group Corporation (NYSE:APG) is a fire safety business that inspects, maintains, and repairs fire safety systems. The installation and maintenance of these systems are non-discretionary and are regulated by law. APi’s acquisition of Chubb’s fire and safety business from Carrier Group provides additional scale with its large European footprint. There is a significant opportunity for margin expansion as management is focused on improving Chubb’s margins to APi’s levels.
We believe company guidance to be conservative. The market and sell-side analysts are underestimating the true normalized earnings power of APi’s business. We believe the market is too focused on the Company’s debt burden (3.5x EBITDA) which will be continued to be paid down over time to management’s target of under 2.5x.
With a double-digit 2023 free cash flow yield and single digit EBITDA multiple, we believe this business trades at a significant discount to fair value. On a relative basis, private market transactions have seen valuations around 20x EBITDA. We believe a middle ground is reasonable.”
APi Group Corporation (NYSE:APG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held APi Group Corporation (NYSE:APG) at the end of the third quarter which was 29 in the previous quarter.
We discussed APi Group Corporation (NYSE:APG) in another article and shared Greenhaven Road Capital’s views on the company. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
