Palm Valley Capital Management, an investment management firm, released the “Palm Valley Capital Fund” fourth quarter 2023 investor letter. A copy of the same can be downloaded here. In the fourth quarter, Palm Valley Capital Fund increased 4.00% compared to 15.12% and 14.07% gains for the S&P SmallCap 600 Index and the Morningstar Small Cap Index, respectively. In 2023, the fund increased by 9.47% compared to 16.05% and 20.59% appreciation for the indexes respectively. The fund’s large allocation in Treasury bills contributed to the Fund’s 2023 performance being less volatile than benchmarks. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
In its Q4 2023 investor letter, Palm Valley Capital Management featured stocks such as Crawford & Company (NYSE:CRD-A). Headquartered in Atlanta, Georgia, Crawford & Company (NYSE:CRD-A) is a claims management and outsourcing solutions provider. On January 3, 2024, Crawford & Company (NYSE:CRD-A) stock closed at $12.87 per share. One-month return of Crawford & Company (NYSE:CRD-A) was 12.99%, and its shares gained 137.89% of their value over the last 52 weeks. Crawford & Company (NYSE:CRD-A) has a market capitalization of $623.647 million.
In its fourth quarter 2023 investor letter, Palm Valley Capital Management stated the following regarding Crawford & Company (NYSE:CRD-A):
“In our third quarter letter to you, we described improving small cap valuations but pointed out that these were mostly occurring in businesses with plenty of operational or financial risk. Still, we purchased a few undervalued stocks in Q3 that had responded negatively to rate hikes. This continued in October, when we acquired two new positions for the portfolio and also added to around half of our existing holdings. The narrow window of opportunity for picking up value has mostly closed, in our opinion. A combination of strong earnings reports and the market’s winter ramp carried several Palm Valley holdings closer to our valuations. As a result, we reduced many names in the fourth quarter, including Crawford & Company (NYSE:CRD-A), which had been one of the larger weightings in the Fund.
There were no securities negatively impacting the Fund by at least 10 basis points in Q4. The three positions contributing most positively to the Fund’s fourth quarter performance were Crawford & Co., Lassonde Industries (ticker LAS/A CN), and WH Group (ticker: WHGLY). Crawford recently delivered its highest quarterly operating profit in five years. While management cautioned that Q4 results wouldn’t be as strong because no major hurricanes hit the U.S. during the fall, we believe investors are rewarding Crawford for expanding margins in its business segments that aren’t dependent on the weather.
For the year, three holdings having the largest favorable impact on performance were Crawford & Co., Lassonde Industries, and Miller Industries (ticker: MLR). Crawford’s stock had materially underperformed the market before 2023, and improving fundamentals combined with an undemanding valuation led to significant appreciation during the year.”
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Crawford & Company (NYSE:CRD-A) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 10 hedge fund portfolios held Crawford & Company (NYSE:CRD-A) at the end of third quarter which was 9 in the previous quarter. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
