In this article, we will discuss Top 5 Stock Picks of Michael Bilger’s 59 North Capital. For the full list and the investment strategy of 59 North Capital, head on Top 10 Stock Picks of Michael Bilger’s 59 North Capital.
5. WESCO International, Inc. (NYSE:WCC)
59 North Capital Stake: $31,721,000
Percentage of 59 North Capital’s Portfolio: 9.08%
Number of Hedge Fund Holders: 48
WESCO International, Inc. (NYSE:WCC) is a distributor of industrial products with three reporting segments: electrical and electronic solutions, communications and security solutions, and utilities and broadband solutions.
In the last quarter, Michael Bilger added to his investment in WESCO International, Inc. (NYSE:WCC) by 54%. WESCO International, Inc. (NYSE:WCC) is trading at an attractive valuation of a forward P/E of 7.20x as compared with the sector median of 14.47x, which is perhaps why the fund increased its position in the company.
WESCO International, Inc. (NYSE:WCC) had a strong Q2 2022, reporting revenue at $5.48 billion, up 19.1% YoY, beating the market consensus by $170 million. The company reported a normalized EPS of $4.19, beating the market consensus estimate by $0.26. The management attributed the company’s good performance to the success of WESCO’S value creation and a better new business model.
Here is what Diamond Hill Capital Management specifically said about WESCO International, Inc. (NYSE:WCC):
“A general selloff among industrials stocks tied to heightened expectations for a recession hit WESCO International, Inc. (NYSE:WCC) International particularly hard due to its somewhat elevated leverage. We maintain conviction in WESCO — a leading distributor of electrical, industrial and communications materials and provider of supply chain management and logistics services — as the largest player in a fragmented market. Its recent merger with a large competitor has given it still more bargaining power in an industry where scale is important, along with significant cost-cutting opportunities. Further, we believe the technical sophistication, customization and high cost of many of the products WESCO supplies, as well as the level of value-added services it provides, should allow the company to remain relatively insulated from e-commerce competition.”
As per Insider Money’s proprietary database, 48 hedge funds are bullish on WESCO International, Inc. (NYSE:WCC), as of the end of the second quarter. Leonard Green & Partners has the biggest stake in the company, with a total investment value of $610,470 at the end of the June quarter.