White Brook Capital, an asset management firm, published its first-quarter 2021 investor letter – a copy of which can be downloaded here. At quarter-end, the Fund was 91.41% invested across 10 positions. For the quarter, the Fund’s NAV increased by 2.98%, net of all realized and accrued fees vs the S&P 400 MidCap Index down 4.88% and the S&P 500 Index down 4.60%. This performance was the result of stock-specific selection and positions us well to take advantage of further opportunities this year. 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, White Brook Capital mentioned KAR Auction Services, Inc. (NYSE:KAR) and explained its insights for the company. Founded in 2006, KAR Auction Services, Inc. (NYSE:KAR) is a Carmel, Indiana-based used car dealers company with a $2.0 billion market capitalization. KAR Auction Services, Inc. (NYSE:KAR) delivered a 10.44% return since the beginning of the year, while its 12-month returns are up by 10.65%. The stock closed at $17.25 per share on April 19, 2022.
Here is what White Brook Capital has to say about KAR Auction Services, Inc. (NYSE:KAR) in its Q1 2022 investor letter:
“During the quarter, White Brook Capital Partners exited the recently entered position in KAR Auction Services, Inc (KAR). During the quarter, the Company sold its US physical wholesale auto auction business to Carvana creating an attractive exit opportunity. Previously KAR had enviable market share of the physical auction market and was quickly growing its online auction business where it was the second largest player in a fragmented market. Their advantage online is uncommanding in my view and they needed their dominant physical presence to create differentiation and grow awareness and use of the online business. I was pleased with the stock price presented after the news of the physical auction’s sale and simultaneously less certain about the standalone online offering’s competitive dynamism and ability to execute. The price offered for our shares represented a very good return on our investment, even more so given the short time the capital was invested, and we exited.”
Photo by Malusi Msomi on Unsplash
Our calculations show that KAR Auction Services, Inc. (NYSE:KAR) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. KAR Auction Services, Inc. (NYSE:KAR) was in 21 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 26 funds in the previous quarter. KAR Auction Services, Inc. (NYSE:KAR) delivered a 11.80% return in the past 3 months.
In August 2021, we also shared another hedge fund’s views on KAR Auction Services, Inc. (NYSE:KAR) 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.
