Is APi Group Corp. (APG) A Smart Long-Term Buy?

Bernzott Capital Advisors, an investment management firm, published its fourth quarter 2020 investor letter – a copy of which can be downloaded here. A return of 24.41% was recorded by the fund in the fourth quarter of 2020, below its  R2000V and R2500V benchmarks that delivered a 33.36% and 28.51% return respectively in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Bernzott Capital Advisors, in their Q4 2020 investor letter, mentioned APi Group Corporation (NYSE: APG) and emphasized their views on the company. APi Group Corporation is a New Brighton, Minnesota-based safety, specialty, and industrial services provider that currently has a $3.8 billion market capitalization. Since the beginning of the year, APG delivered a 5.95% return, impressively extending its 12-month gains to 172.77%. As of March 23, 2021, the stock closed at $19.23 per share.

Here is what Bernzott Capital Advisors has to say about APi Group Corporation in their Q4 2020 investor letter:

“APi Group (APG): A business services provider of safety, specialty and industrial services primarily in North America. The company was brought public via a SPAC in 2019 under the leadership of Martin Franklin and James Lillie, formerly of Jarden. Working alongside CEO Russ Becker and CFO Tom Lydon, we expect them to expand profit margins from 10-12+% and increase the percentage of total revenue that is recurring from 40-50+% over the next several years. The board members from Jarden also bring tremendous capital markets experience and we expect APG to continue to consolidate a highly fragmented safety industry.”

Our calculations show that APi Group Corporation (NYSE: APG) 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, APi Group Corporation was in 31 hedge fund portfolios, compared to 28 funds in the third quarter. APG delivered a 7.37% return in the past 3 months.