Heartland Advisors, an investment management firm, published its “Heartland Mid Cap Value Fund” second-quarter 2022 investor letter – a copy of which can be downloaded here. The Russell Mid Cap® Value Index was down for the quarter and the first half of the year, but it beat the S&P 500 and significantly outperformed the Russell Mid Cap Growth index over each timeframe. The Heartland Mid Cap Value Strategy, meanwhile, outperformed the Russell Mid Cap® Value Index in Q2 and on a year-to-date basis. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, Heartland Mid Cap Value Fund mentioned Snap-on Incorporated (NYSE:SNA) and explained its insights for the company. Founded in 1920, Snap-on Incorporated (NYSE:SNA) is a Kenosha, Wisconsin-based manufacturing company with an $11.3 billion market capitalization. Snap-on Incorporated (NYSE:SNA) delivered a -0.98% return since the beginning of the year, while its 12-month returns are down by -5.04%. The stock closed at $213.27 per share on July 22, 2022.
Here is what Heartland Mid Cap Value Fund has to say about Snap-on Incorporated (NYSE:SNA) in its Q2 2022 investor letter:
“Snap-on Inc. (NYSE:SNA) represents a typical holding in that its recent earnings performance, which easily topped analyst expectations, underscored the company’s ability to pass on higher costs to customers. Based in Kenosha, Wisconsin, Snap-on designs and manufactures professional-grade tools with a particular focus on the automotive-repair industry.
While the company was a top performer in the portfolio during the quarter, we believe its current valuation – trading at 12x earnings – leaves plenty of room to run. By comparison, peers trade at 15x earnings even though Snap-on has better margins and operates with less leverage than its competitors.
Meanwhile, several secular tailwinds, including an aging fleet of used cars and ever-increasing vehicle complexity, should prove beneficial to Snap-on’s business over the longer term. Snap-on’s history of distributing dividends, which has grown at a 7% CAGR over the past 35 years, underscores its financial discipline and is an added appeal.
Our calculations show that Snap-on Incorporated (NYSE:SNA) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Snap-on Incorporated (NYSE:SNA) was in 54 hedge fund portfolios at the end of the second quarter of 2022, compared to 55 funds in the previous quarter. Snap-on Incorporated (NYSE:SNA) delivered a -4.10% return in the past 3 months.
In May 2021, we also shared another hedge fund’s views on Snap-on Incorporated (NYSE:SNA) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
