White Brook Capital, an asset management firm, published its first-quarter 2021 investor letter – a copy of which can be downloaded here. At quarter-end, the Fund was 91.41% invested across 10 positions. For the quarter, the Fund’s NAV increased by 2.98%, net of all realized and accrued fees vs the S&P 400 MidCap Index down 4.88% and the S&P 500 Index down 4.60%. This performance was the result of stock-specific selection and positions us well to take advantage of further opportunities this year. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, White Brook Capital mentioned Mohawk Industries, Inc. (NYSE:MHK) and explained its insights for the company. Founded in 1988, Mohawk Industries, Inc. (NYSE:MHK) is a Calhoun, Georgia-based flooring manufacturer with an $8.1 billion market capitalization. Mohawk Industries, Inc. (NYSE:MHK) delivered a -29.81% return since the beginning of the year, while its 12-month returns are down by -36.41%. The stock closed at $127.88 per share on April 19, 2022.
Here is what White Brook Capital has to say about Mohawk Industries, Inc. (NYSE:MHK) in its Q1 2022 investor letter:
“During the quarter, White Brook exited Mohawk Industries, Inc (NYSE:MHK). Mohawk is a founder-run leading flooring supplier, globally. I sold our position as tensions between Russia and Ukraine were beginning to build. The Company has a small factory in Russia, and I concluded that even if commercial and residential flooring needs were to grow in the region, transportation of those goods across eastern europe would, at best, be more costly. At the time, I expected a level of harassment and additional cost at the border, but was hyper aware of what followed when other autocrats in recent history built troops on their neighbors’ borders. The worst case ended up coming true, but White Brook Capital was out of the investment weeks before – able to trade a cheap, global, construction supplier with an overly conservative balance sheet for another that was also cheap, but levered to the US housing market instead, and was using their balance sheet to increase each share of stock’s per share earnings in front of anticipated growth. In making the transition, given the ability to better understand the US construction and renovation market vs the global flooring market, the position’s size was also increased. Mohawk ultimately represented a positive but unspectacular IRR given the length of time the investment was held.”
Our calculations show that Mohawk Industries, Inc. (NYSE:MHK) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Mohawk Industries, Inc. (NYSE:MHK) was in 38 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 38 funds in the previous quarter. Mohawk Industries, Inc. (NYSE:MHK) delivered a -21.0% return in the past 3 months.
In March 2022, we published an article that includes Mohawk Industries, Inc. (NYSE:MHK) in the 10 Industrial Stocks to Invest In According to Ray Dalio’s Bridgewater Associates. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.