Palm Valley Capital recently released its Q1 2020 Investor Letter, a copy of which you can download below. The fund posted a return of 0.79% for the quarter, outperforming its benchmark, the S&P Small Cap 600 Index which returned -32.65% in the same quarter. You should check out Palm Valley Capital’s top 5 stock picks which helped them beat the market by nearly 33 percentage points. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.
In the said letter, Palm Valley Capital highlighted a few stocks and Weis Markets Inc (NYSE:WMK) is one of them. Weis Markets is a food retailer. Year-to-date, WMK stock gained 39.5% and on May 19th it had a closing price of $55.71. Here is what Palm Valley Capital said:
“Weis Markets (WMK) operates 200 grocery stores in Pennsylvania and surrounding states. The company has a very strong balance sheet with no debt and $130 million in cash and marketable securities. Weis also owns 95 of its stores, a 1.3 million square foot distribution center, an ice cream plant, and a meat processing facility. Weis provides a 3% dividend yield and has consistently generated free cash flow over the past decade.”
In Q4 2019, the number of bullish hedge fund positions on WMK stock decreased by about 25% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with WMK’s growth potential.
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Disclosure: None. This article is originally published at Insider Monkey.