Investment management company Cove Street Capital recently released its “Small Cap Value Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The firm concluded an unsatisfactory fiscal year of operations. It owns a few not-so-good holdings and some delayed-gratification positions since the market generally dislikes small-cap value stocks. In the third quarter, the fund returned 3.70% (net of fees) compared to 9.27% for the Russell 2000 Index and 10.15% for the Russell 2000 Value Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Cove Street Capital Small Cap Value Fund highlighted stocks like Climb Global Solutions, Inc. (NASDAQ:CLMB) in the third quarter 2024 investor letter. Headquartered in Eatontown, New Jersey, Climb Global Solutions, Inc. (NASDAQ:CLMB) is a value-added information technology distribution and solutions company. The one-month return of Climb Global Solutions, Inc. (NASDAQ:CLMB) was 17.76%, and its shares gained 129.83% of their value over the last 52 weeks. On October 7, 2024, Climb Global Solutions, Inc. (NASDAQ:CLMB) stock closed at $103.77 per share with a market capitalization of $478.047 million.
Cove Street Capital Small Cap Value Fund stated the following regarding Climb Global Solutions, Inc. (NASDAQ:CLMB) in its Q3 2024 investor letter:
“Climb Global Solutions, Inc. (NASDAQ:CLMB) has been our top performer so far in 2024. The company is a specialty IT distributor that acts as an intermediary between software vendors and resellers, focusing on “emerging” software and helping them bring their products to market. The IT distributor industry is dominated by large players servicing enterprise software and hardware whereas smaller software companies are left underserved by a fragmented distributor base. This is where Climb has focused, executing on a strategy of organic growth and strategic acquisitions, the latter of which seek to add new vendors and expand Climb’s geographic reach. An intentional focus on software over hardware, successful integration of past acquisitions, organic additions of high-quality vendors, conservative valuation multiples paid on recent transactions, and strength in cybersecurity and data center end markets YTD have inspired confidence in management’s ability to execute this strategy. No leverage, no issues – just a good business model with good management bought well.”
A technician in a server room of a corporate office surrounded by servers and networking equipment.
Climb Global Solutions, Inc. (NASDAQ:CLMB) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 6 hedge fund portfolios held Climb Global Solutions, Inc. (NASDAQ:CLMB) at the end of the second quarter which was 5 in the previous quarter. Climb Global Solutions, Inc.’s (NASDAQ:CLMB) second quarter net sales increased 13% year-over-year to $92.1 million. While we acknowledge the potential of Climb Global Solutions, Inc. (NASDAQ:CLMB) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Climb Global Solutions, Inc. (NASDAQ:CLMB) and shared the list of stocks that hedge funds are talking about. In the first quarter 2024, Cove Street Capital Small Cap Value Fund characterized Climb Global Solutions, Inc. (NASDAQ:CLMB) as a minnow in a billion-dollar space. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.