Vulcan Value Partners, an exclusive investment vehicle for all public equity investments, published its ‘Small Cap Composite’ third-quarter 2020 Investor Letter – a copy of which can be downloaded here. A gross return of 0.1% was recorded by the fund for the Q3 of 2020, below its Russel 2000 Value Index benchmark that returned 2.6% and Russel 2000 index that returned 4.9%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.
Vulcan Value Partners, in their Q3 2020 Investor Letter said that the need for janitorial service has increased during the pandemic and continues to be in demand up to now. They acquired a new position in ABM Industries Incorporated (NYSE: ABM), the largest janitorial services provider in America that currently has a $2.75 billion market cap. For the past 3 months, ABM Industries Incorporated delivered a 21.58% return and settled at $41.19 per share at the closing of January 15th.
Here is what Vulcan Value Partners has to say about ABM Industries Incorporated in their Investor Letter:
“ABM Industries Inc. is the largest janitorial services provider in the U.S. Its market segments also include facility management services, parking services, and maintenance services. Its technical solutions business retrofits electrical, HVAC, lighting, and water systems to reduce customer utility expenses. ABM Industries’ asset-light business model, high level of recurring revenue, and solid free cash flow generation make it an attractive business. ABM Industries has high market share in several large metro cities and employs 140,000 workers, which enables it to deploy resources nationally to provide solutions to companies with multiple locations. It has made extensive technology investments to manage its workforce efficiently and create flexibility during difficult economic times. New service offerings including Enhanced Clean add value and further entrench customers. The trend of outsourcing janitorial services is accelerating during COVID-19 and market share is shifting towards larger providers, such as ABM Industries, who can adapt to customers’ needs without disrupting their business models.”
Last December 2020, we published an article telling that ABM Industries Incorporated (NYSE: ABM) was in 18 hedge funds’ portfolio, almost making to its all time high statistics of 21. ABM delivered an 8.85% return YTD.
As of September 2020, Vulcan Value Partners had a 844k share position in ABM that amounted to $30 million. However, our calculations showed that ABM Industries Incorporated (NYSE: ABM) does not belong to the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
Video: Top 5 Stocks Among Hedge Funds
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