Heartland Advisors, an investment management company, released its “Heartland Value Plus Fund” first quarter 2023 investor letter. A copy of the same can be downloaded here. In the first quarter, the Value Plus Investor Class of the fund returned 0.33% and the Value Plus Institutional Class returned 0.41% compared to -0.66% for the Russell 2000 Value Index. Investments in Industrials and Health Care contributed to the fund’s outperformance in the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Heartland Value Plus Fund highlighted stocks like Avanos Medical, Inc. (NYSE:AVNS) in the first quarter 2023 investor letter. Headquartered in Alpharetta, Georgia, Avanos Medical, Inc. (NYSE:AVNS) is a medical technology company. On April 13, 2023, Avanos Medical, Inc. (NYSE:AVNS) stock closed at $30.34 per share. One-month return of Avanos Medical, Inc. (NYSE:AVNS) was 9.25%, and its shares lost 4.98% of their value over the last 52 weeks. Avanos Medical, Inc. (NYSE:AVNS) has a market capitalization of $1.414 billion.
Heartland Value Plus Fund made the following comment about Avanos Medical, Inc. (NYSE:AVNS) in its Q1 2023 investor letter:
“In general, we are very comfortable with how the portfolio has been positioned, but we did make some tweaks around the edges later in the quarter to take advantage of what the market was giving. We were particularly focused on opportunities in companies that have compelling self-help strategies. This is because at a time when there aren’t many economic or market catalysts you can rely on, self-help advantages stand out.
A good example is Avanos Medical, Inc. (NYSE:AVNS), a medical device company focused on products related to pain management, chronic care, and digestive and respiratory health.
This is a story of addition by subtraction. Avanos, which we added to in the quarter, announced plans to wind down around $35 million of its slowest-growing and least profitable parts of the business and take a restructuring charge. This portfolio optimization could amount to roughly $55 million in gross cost savings. The company’s self-help moves are also likely to boost its EBITDA margin to 22%, up from 16-17% in 2022.
Meanwhile, AVNS has a very strong balance sheet, sporting a Net Debt/EBITDA ratio of less than 1. And the stock is quite cheap, trading at approximately 9 times EV/EBITDA based on ’24 estimates.”
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Avanos Medical, Inc. (NYSE:AVNS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held Avanos Medical, Inc. (NYSE:AVNS) at the end of the fourth quarter which was 20 in the previous quarter. In addition, please check out our hedge fund investor letters Q1 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.
