SouthernSun Asset Management, LLC, an investment management firm, released its “SouthernSun Small Cap Strategy” third quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, the strategy returned -7.56% on a gross basis (-7.73% net) compared to a -5.13% return for the Russell 2000 Index and -2.96% for the Russell 2000 Value Index. The strategy returned 15.46% on a gross basis (14.61% net) over the trailing twelve months compared to 8.93% and 7.84%, respectively, for the indexes over the same period. In addition, please check the top 5 holdings of the strategy to know its best pick in 2023.
SouthernSun Small Cap Strategy highlighted stocks like Murphy USA Inc. (NYSE:MUSA) in the third quarter 2023 investor letter. Headquartered in El Dorado, Arkansas, Murphy USA Inc. (NYSE:MUSA) engages in the marketing of motor fuel products and convenience merchandise through retail stores. On October 26, 2023, Murphy USA Inc. (NYSE:MUSA) stock closed at $360.51 per share. One-month return of Murphy USA Inc. (NYSE:MUSA) was 5.50%, and its shares gained 13.52% of their value over the last 52 weeks. Murphy USA Inc. (NYSE:MUSA) has a market capitalization of $7.734 billion.
SouthernSun Small Cap Strategy made the following comment about Murphy USA Inc. (NYSE:MUSA) in its Q3 2023 investor letter:
“Murphy USA Inc. (NYSE:MUSA), a leading retailer of gasoline and convenience merchandise, was one of the top contributors in the Small Cap strategy in the third quarter. In our view, MUSA reported solid results for the second quarter of 2023, as it continues to benefit from its position as a low-cost, high-volume retailer of fuel. Fuel margins in the c-store industry have shifted higher in recent years due to cost and volume pressures faced by marginal, independent retailers, who as a group, comprise a large percentage of domestic fuel marketers. Due to its advantaged locations on Walmart outparcels, the small footprint for most of their stores, and low labor business model, MUSA disproportionately benefits from these higher fuel margins. We visited with management at their company headquarters recently and reviewed the business’s competitive position and its capital allocation outlook. Driven by its value proposition to consumers, MUSA continues to grow on a same-store basis and management sees a continued opportunity for new store additions and “raze and rebuild” of older stores. Management also continues to repurchase shares with excess cash flow, somewhat against the grain of an industry that has seen significant consolidation in recent years. In what we believe is evidence of capital discipline and owner orientation, since its spin in 2013, MUSA management has bought back over 50% of its shares outstanding while completing just one bolt-on acquisition.”
A customer happily filling up their tank at the Wholesale Club’s gasoline station. Editorial photo for a financial news article. 8k. –ar 16:9
Murphy USA Inc. (NYSE:MUSA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Murphy USA Inc. (NYSE:MUSA) at the end of second quarter which was 28 in the previous quarter.
We discussed Murphy USA Inc. (NYSE:MUSA) in another article and shared The London Company Small Cap Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q3 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
