Anchor Capital Management’s Top 5 Stock Picks in 2024

3. Air Transport Services Group, Inc. (NASDAQ:ATSG)

Value of Anchor Capital Management’s 13F Position (3/31/2024): $12.2 million

Number of Hedge Fund Shareholders (12/31/2023): 19

Anchor Capital Management bought more shares of Air Transport Services Group, Inc. (NASDAQ:ATSG) during the first quarter, raising the size of its position by 23% to 886,153 shares. Hegde fund ownership of ATSG has been remarkably steady of late, with 19 funds holding long positions in the company in five of the previous six quarters between mid-2022 and the end of 2023.

It’s not hard to see why some hedge funds are doggedly hanging on to their positions in Air Transport Services Group, Inc. (NASDAQ:ATSG), as shares of the provider of air cargo transportation and services trade well below their historical valuation. The company’s revenue growth was modest in 2023, inching up by just 1% to $2.1 billion and the company has scaled back on some of its ambitious capital spending plans in the wake of weakening demand in both its passenger airline operations and leasing segment.

Bernzott Capital Advisors isn’t as bullish on Air Transport Services Group, Inc. (NASDAQ:ATSG) as Anchor Capital Management, having sold off its stake in the company according to the fund’s Q2 2023 investor letter, citing its heavy capex cycle (though as noted above, the company has since scaled back those initiatives):

“Air Transport Services Group, Inc. (NASDAQ:ATSG): The company’s elevated capital spending plans through next year extend its heavy capex cycle and will impede a free cash flow recovery. As a result, we exited the position.”