Headwaters Capital Management, an investment management company, released its first-quarter 2024 investor letter. A copy of the investor letter can be downloaded here. The fund increased by +10.6% (+10.4% net) in the first quarter compared to a +8.6% return for the Russell Mid Cap Index. During Q1, large caps, led by the S&P 500 with a 10.4% gain, outperformed small caps, represented by the Russell 2000 with a 5% gain. Headwaters portfolio exceeded the Russell Mid Cap benchmark due to favorable stock selection. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Headwaters Capital Management featured stocks Climb Global Solutions, Inc. (NASDAQ:CLMB) in the first quarter 2024 investor letter. Headquartered in Eatontown, New Jersey, Climb Global Solutions, Inc. (NASDAQ:CLMB) is a value-added information technology company. On April 9, 2024, Climb Global Solutions, Inc. (NASDAQ:CLMB) stock closed at $70.59 per share. One-month return of Climb Global Solutions, Inc. (NASDAQ:CLMB) was 5.80%, and its shares gained 33.36% of their value over the last 52 weeks. Climb Global Solutions, Inc. (NASDAQ:CLMB) has a market capitalization of $322.425 million.
Headwaters Capital Management stated the following regarding Climb Global Solutions, Inc. (NASDAQ:CLMB) in its first quarter 2024 investor letter:
“Climb Global Solutions, Inc. (NASDAQ:CLMB): The Middle Man for the Middle Man Summary Investment: Thesis 1) Niche Cybersecurity and Data Center Software Distributor with Vertical Specific Expertise 2) Focus on Cybersecurity and Data Center End Markets along with Faster Growing Vendors Supports Double Digit Organic Billings Growth; Programmatic M&A Will Supplement Organic Growth 3) Attractive Financial Profile Given Capital Light Nature of Software Distribution and Minimal CAPEX Requirements 4) CEO with Impressive Industry Experience and Track Record.
Climb Global Solutions is a specialty IT distributor focused on cybersecurity and data center software. CLMB differentiates itself from broadline distributors such as Arrow, TD Synnex or Ingram Micro through deep expertise with the limited number of products it distributes. CEO Dale Foster orchestrated this focused distribution strategy when he took over as CEO, reducing the number of vendors on the company’s line card from 455 to 100. As a result, CLMB now serves as a more focused partner, dedicating all its sales and marketing expertise to a smaller list of vendors. CLMB acts as an outsourced sales force for its partners given their expertise with the products they distribute. Unlike many technology distributors, hardware only accounts for 6% of the company’s adjusted gross billings, which has positive working capital and ROIC implications (discussed below). While the top 20 vendors account for ~70% of CLMB’s sales, the company has a focused strategy of adding smaller companies with strong growth prospects to its line card. CLMB’s vendor expansion strategy is achieved through organic new partnership agreements as well as through acquisitions of distributors with high growth vendor relationships….” (Click here to read the full text)
A technician in a server room of a corporate office surrounded by servers and networking equipment.
Climb Global Solutions, Inc. (NASDAQ:CLMB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Climb Global Solutions, Inc. (NASDAQ:CLMB) was held by 4 hedge fund portfolios, compared to 4 in the previous quarter, according to our database. In addition, please check out our hedge fund investor letters Q1 2024 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.
