Heartland Advisors, an investment management firm, published its “Heartland Value Plus Fund” first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 20.62% was delivered by the fund’s institutional class shares for the Q1 of 2021, slightly below its Russell 2000® Value benchmark that delivered a 21.17% return for the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Heartland Value Plus Fund, in its Q1 2021 investor letter, mentioned Phibro Animal Health Corporation (NASDAQ: PAHC), and shared their insights on the company. Phibro Animal Health Corporation is a Teaneck, New Jersey-based animal health and mineral nutrition company that currently has a $1.09 billion market capitalization. Since the beginning of the year, PAHC delivered a 39.08% return, while its 12-month gains are up by 19.25%. As of May 13, 2021, the stock closed at $27.01 per share.
Here is what Heartland Value Plus Fund has to say about Phibro Animal Health Corporation in its Q1 2021 investor letter:
“The portfolio was up sharply and kept pace with its benchmark, the Russell 2000® Value Index, for the period. Stock selection in Information Technology was strong as were holdings in the Utilities sector. The portfolio’s holdings in Consumer Discretionary were up sharply but lagged the benchmark average for the group.
Healthy growth. The portfolio’s Health Care names were up on a relative and absolute basis and built on strength they enjoyed in late 2020. Phibro Animal Health Corp. (PAHC), was up double-digits for the second consecutive PAHC period.
Phibro, an animal health and mineral nutrition company that produces vaccines, microbial products, and medicated feed additives, saw its shares rise after reporting better than expected earnings in February. We anticipate the company should continue to see healthy gains in free cash flow generation in 2021, as it begins to reap the benefits of investments made in 2020.
Additionally, Phibro has seen growing demand for its products as animal production has rebounded following a slowdown in the meat packing industry due to COVID-19. As food inflation has accelerated, we expect Phibro’s products will see increasing demand as the company’s customers look to capitalize on rising protein prices. Despite the favorable outlook for the company, shares trade at 10x estimates of 2022 enterprise value/earnings before interest, depreciation and amortization (EV/EBITDA).”
Our calculations show that Phibro Animal Health Corporation (NASDAQ: PAHC) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Phibro Animal Health Corporation was in 14 hedge fund portfolios, compared to 15 funds in the third quarter. PAHC delivered a 16.27% return in the past 3 months.
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