Top 5 Stocks to Buy and Hold According to MIG Capital

4. Armstrong World Industries, Inc. (NYSE:AWI)

MIG Capital’s ownership of Armstrong World Industries, Inc. (NYSE:AWI) dates all the way back to the first quarter of 2017. As of the end of September, the fund had a $45.2 million position in the stock that contained 473,417 shares. Hedge fund ownership of AWI fell by half during the first two quarters of 2021 but rebounded by 38% in Q3.

Black Bear Value Partners discussed the stock in its Q1 2021 investor letter, where it noted that 70% of Armstrong World Industries, Inc. (NYSE:AWI)’s sales are to repair and remodel segments of the home industry, making it less sensitive to new home starts. The fund believes Armstrong World Industries, Inc. (NYSE:AWI) is an excellent stock at an attractive valuation, with the capability of generating $4-$5 in free cash flow annually.

Black Bear Value Partners, an investment management firm, published its first quarter 2021 investor letter,and mentioned Armstrong World Industries, Inc. (NYSE:AWI). Here is what the fund said:

“AWI is a 129-year old designer and manufacturer of commercial and residential ceiling, wall, and suspension systems. 95% of their sales are for commercial use with the majority (70%) for repair and remodel (R&R). This translates to less sensitivity to new construction as R&R is a more stable revenue stream.

The US ceiling industry is consolidated with the top 3 companies controlling 98% of the market. AWI is the market leader with 65% market share. (Click here to see the full text)