Merion Road Capital Management, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. Merion Road Capital’s long-only large-cap portfolio returned 20% for the year. While this is a strong result on an absolute basis, it lagged the S&P. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Merion Road Capital Management, in its Q4 2021 investor letter, mentioned Ferguson plc (NYSE: FERG) and discussed its stance on the firm. Ferguson plc is a Wokingham, United Kingdom-based plumbing and heating products distributor with a $33.3 billion market capitalization. FERG delivered a -17.45% return since the beginning of the year, while its 12-month returns are up by 25.28%. The stock closed at $148.08 per share on February 14, 2022.
Here is what Merion Road Capital Management has to say about Ferguson plc in its Q4 2021 investor letter:
“One of our largest contributors was Ferguson (“FERG”). The company was busy from a strategic perspective, having divested its non‐core UK business, created a dual stock listing, and initiated a $1bn share buyback program. They are currently preparing to move their primary stock listing from the UK to the US. Thisshould lead to their inclusion in the S&P 500 index and improved trading liquidity – both good things for the stock. FERG has also executed well fundamentally. Organic growth over the last few quarters has been in the low 20%s to which the company has augmented their usual barrage of smaller acquisitions. While the uplift in construction activity has surely been a boon to the topline, FERG has continued gaining share within the industry. To this point, in a time when securing product is difficult, they have been able to leverage their relationships with over 45,000 global suppliers. Margins have been particularly strong given the dramatic increase in commodity prices; though this may turn from tailwind to headwind over the nextseveral quarters, the company anticipates offsetting much of thisthrough scale benefits and other internal initiatives.”
Our calculations show that Ferguson plc (NYSE: FERG) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. FERG was in 10 hedge fund portfolios at the end of the third quarter of 2021, compared to 11 funds in the previous quarter. Ferguson plc (NYSE: FERG) delivered a -6.30% return in the past 3 months.
In October 2021, we published an article that includes FERG in the 11 Best High Dividend Stocks Under $50. You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
