10 Cheap and High-Quality Stocks Picked by Former SAC Capital Analyst

2. Garrett Motion Inc. (NASDAQ:GTX)

Number of Hedge Fund Holders: 35  

Prevatt Capital’s Stake: $25,844,000

Garrett Motion Inc. (NASDAQ:GTX) makes and sells auto parts and equipment. It is ranked second on our list of top stock picks of Prevatt Capital. Garrett Motion Inc. (NASDAQ:GTX) has been featured in the Prevatt portfolio since the fourth quarter of 2023. Tepper increased the stake of his hedge fund in the company by nearly 4% during the first three months of 2024. This stake is now worth more than 8.7% of the total portfolio. Garrett Motion Inc. (NASDAQ:GTX) is a value offering that often slips under the radar of top inventors. However, Tepper has identified the value in the shares over the past few months.

Garrett Motion Inc. (NASDAQ:GTX) is on track to deliver positive sales and earnings growth for the next few years by becoming embedded in the production chains of top car makers. It aims to deliver on growth numbers by focusing on development of zero emission technologies, decreasing the net debt to EBITDA ratio, and authorizing share buybacks to soothe uncertain investors. As a leading manufacturer of turbochargers and other automotive components, Garrett Motion Inc. (NASDAQ:GTX) benefits from a strong market presence and technological expertise already.

In its Q1 2024 investor letter, Alluvial Capital Management, an asset management firm, highlighted a few stocks and Garrett Motion Inc. (NASDAQ:GTX) was one of them. Here is what the fund said:

“Garrett Motion Inc. (NASDAQ:GTX) delivered nice results in February. The company issued strong guidance for 2024 and best of all, indicated it would use nearly all its 2024 free cash flow to repurchase stock. The company wasted no time, buying back a whopping 10 million shares for $90 million on March 6. Garrett will continue to harvest the cash flows from its dominant turbochargers business, investing in creating products for electric vehicles and returning excess cash to shareholders. Investors seem to be waking up to the reality that while electric vehicles are a near-inevitability, it will be a long time still before internal combustion engines lose their relevance. By the time they do, Garrett Motion will have completed the transition to an electric vehicle equipment manufacturer and will have returned billions in capital to investors.”