In this article, we will take a detailed look at the 7 Stocks Billion Dollar Hedge Fund Voss Capital Is Crazy About.
A fund management company, Voss Capital is based in Houston and was founded in 2011 by Travis Cocke who currently serves as the fund’s General Partner and Chief Investment Officer. He manages Voss’ funds. Interestingly, Voss is an acronym which stands for Value-Oriented Special Situations.
Before launching Voss, Cocke served as a Generalist Research Analyst at Ascendant Advisors LLC. from August 2009 to July 2010. Cocke was also an intern at the Teacher Retirement System of Texas during the summer of 2008.
He obtained a Bachelor of Business Administration in Finance from Texas A&M in 2009.
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In addition to concentrating on value stocks and special situations, as implied by the words that make up Voss’ acronym, the fund manager focuses on fundamentals. Special situations are unusual developments that affect companies. Additionally, Voss seeks to invest in stocks that it believes can double within three years.
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Our Methodology
The following data is gathered from Voss Capital’s investment letter for the first quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here). That’s why you should pay close attention to this important indicator.
7. Alta Equipment Group (NYSE:ALTG)
Value of Voss Capital’s 13F Position (6/30/2024): $24 million
An owner of equipment dealerships that both sell and rent equipment, Alta Equipment Group (NYSE:ALTG) also builds warehouses and repairs and provides maintenance for equipment.
In the third quarter, Alta Equipment Group (NYSE:ALTG)’s revenue fell by 3.7% versus the same period a year earlier to $449 million. On a positive note, its product support revenue rose 8% year-over-year, but its new and used equipment sales sank 13.3% YOY. Moreover, it generated an adjusted loss per share of 72 cents, although its adjusted EBITDA did come in at $43.2 million.
CEO Ryan Greenawalt reported that a number of Alta Equipment Group (NYSE:ALTG)’s customers had elected to postpone projects in order to wait for the outcome of the U.S. elections. He expressed optimism that Alta Equipment Group (NYSE:ALTG)’s customers would deploy more capital in 2025.
Analysts, on average, expect Alta Equipment Group (NYSE:ALTG)’s revenue to rise slightly to $1.9 billion in 2025 from $1.87 billion in 20254, and the mean estimate calls for its per-share loss to drop to -24 cents in 2025 from -$1.16 in 2024.
In May, Voss had expected Alta Equipment Group (NYSE:ALTG)’s parts and services revenue sales growth to be “resilient.” That’s because Alta Equipment Group (NYSE:ALTG)’s sales of new equipment had increased at a compound annual growth rate (CAGR) of about 43% since 2019, according to the firm. Additionally, Voss predicted that Alta Equipment Group (NYSE:ALTG) ‘s margins would rise, partly due to more profitable items making up a higher proportion of its sales. According to Voss, Alta Equipment Group (NYSE:ALTG)’s valuation was extremely low.
Alta Equipment Group (NYSE:ALTG)’s shares have sunk 25% since May 24.
6. International Money Express (NASDAQ:IMXI)
Value of Voss Capital’s 13F Position (6/30/2024): $25.5 million
International Money Express (NASDAQ:IMXI) focuses on enabling consumers to send funds from the U.S. to Latin America.
In Q3, International Money Express (NASDAQ:IMXI)’s revenue fell 0.3% versus the same period a year earlier to $172 million, but its net income increased 17% year-over-year to $17.3 million.
Stating that its valuation was failing to reflect its true value, International Money Express (NASDAQ:IMXI) announced that it had hired an advisor to help it “assess strategic initiatives.” The shares currently have a forward price-earnings ratio of just 8.65 times.
Analysts, on average, expect its EPS to climb to $2.40 in 2025 from $2.17 in 2024
Voss believes that International Money Express (NaSDAQ:IMXI) indicated that it would buy back $20 million to $25 million of its shares per quarter. The fund manager believes that these buybacks will enable the firm to “compound EPS at 20%+ for the next few years.”
International Money Express (NaSDAQ:IMXI)’s share price is little changed since May 24.
5. Genius Sports (NYSE:GENI)
Value of Voss Capital’s 13F Position (6/30/2024): $32.3 million
Genius Sports (NYSE:GENI) provides data and tech products to sports-betting platforms. In Q3, its sales jumped 18% versus the same period a year earlier to $120 million, while its adjusted EBITDA soared 45% year-over-year to $26 million.
Genius Sports (NYSE:GENI) raised its 2024 sales and adjusted EBITDA guidance to $511 million and $86 million, respectively, and now expects those metrics to increase by 24% and 61%, respectively. Genius Sports (NYSE:GENI) also expects to generate positive cash flow in 2024.
Analysts, on average, expect Genius Sports (NYSE:GENI)’s 2025 earnings per share to come in at 6 cents, versus a per-share loss of 10 cents in 2024.
Voss believes that Genius “is well-positioned to continue to benefit from increased sports betting legalization and the growth of in-game betting in the U.S.”
Genius has jumped 68% since May 24.
Choice Equities Capital Management stated the following regarding Genius Sports Limited (NYSE:GENI) in its Q3 2024 investor letter:
“CZR and Genius Sports Limited (NYSE:GENI) – Both Caesars Entertainment, Inc. and Genius Sports Limited operate in and around the entertainment, casino and gaming space. Caesars is a bit more well-known and discussed in brief below. Genius is not as well-known but possesses a bright future as a fast-growing company that has become a critical cog in the sports betting value chain. The company has exclusive data rights deals with many leagues including the English Premier League and the NFL (which owns an equity stake in the company) which afford the company the right to collect, synthesize and share pre-game and in-game data with their casino and sportsbook partners to generate betting lines. A more in-depth memo has been attached for existing investors.”