Palm Valley Capital Management, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. A quarterly portfolio return of 1.94% was recorded by the fund for the first quarter of 2022, while its benchmarks, the S&P SmallCap 600 Index, by comparison, returned -5.64% and -6.18% return for the Morningstar Small Cap Index over the same period. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Palm Valley Capital Management mentioned Heartland Express, Inc. (NASDAQ:HTLD) and explained its insights for the company. Founded in 1978, Heartland Express, Inc. (NASDAQ:HTLD) is a North Liberty, Iowa-based haul truckload carrier company with a $1.0 billion market capitalization. Heartland Express, Inc. (NASDAQ:HTLD) delivered a -23.25% return since the beginning of the year, while its 12-month returns are down by -34.47%. The stock closed at $12.91 per share on April 12, 2022.
Here is what Palm Valley Capital Management has to say about Heartland Express, Inc. (NASDAQ:HTLD) in its Q1 2022 investor letter:
“We acquired three new stocks over the first quarter: (which includes) Heartland Express (ticker: HTLD). While many of the companies on our buy list fell in Q1, they were generally declining from lofty levels. The prices did not reach a level where we believed we could meet our required return threshold. Additionally, stocks partially rebounded in the last two weeks of March.
Founded in 1978, Heartland Express is an established short-to-medium haul trucking company serving the entire United States. Since going public in 1986, Heartland has grown revenues from $22 million to $607 million in 2021. Heartland has differentiated itself by keeping its equipment new and deliveries on time. As an efficient provider of premium transportation services, Heartland has a long history of generating above average profit margins and has received multiple customer service awards.
Although Heartland produced record earnings last year, its revenues declined as the company reduced its fleet. Similar to other transportation companies, Heartland is having difficulty finding enough qualified labor to fill its trucks. We believe the challenging labor market and decline in revenues has contributed to Heartland’s poor stock performance (down 28% from its 2021 high). Heartland has been on our possible buy list for many years, and we were pleased to see its stock trade below our calculated valuation. We believe the company is a high-quality cyclical business that has historically generated abundant free cash flow and has maintained one of the strongest balance sheets in the industry. “
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Our calculations show that Heartland Express, Inc. (NASDAQ:HTLD) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Heartland Express, Inc. (NASDAQ:HTLD) was in 13 hedge fund portfolios at the end of the first quarter of 2022, compared to 14 funds in the previous quarter. Heartland Express, Inc. (NASDAQ:HTLD) delivered a -20.80% return in the past 3 months. You can find more than 100 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.
