Merion Road Capital, an investment advisor, released its first quarter 2024 investor letter. A copy of the letter can be downloaded here. In the first quarter, Merion Road Small Cap Fund returned 4.9% compared to 5.0% for the Russell 2000 Index. The long-only portfolio of Merion Road rose 12.9% during the quarter compared to a 10.4% return for the S&P 500 Index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2024.
Merion Road Capital featured stocks like Bassett Furniture Industries, Incorporated (NASDAQ:BSET) in the first quarter 2024 investor letter. Headquartered in Bassett, Virginia, Bassett Furniture Industries, Incorporated (NASDAQ:BSET) manufactures, markets, and retails home furnishings. On April 17, 2024, Bassett Furniture Industries, Incorporated (NASDAQ:BSET) stock closed at $13.32 per share. One-month return of Bassett Furniture Industries, Incorporated (NASDAQ:BSET) was -9.94%, and its shares lost 8.20% of their value over the last 52 weeks. Bassett Furniture Industries, Incorporated (NASDAQ:BSET) has a market capitalization of $117.599 million.
Merion Road Capital stated the following regarding Bassett Furniture Industries, Incorporated (NASDAQ:BSET) in its first quarter 2024 investor letter:
“The Small Cap Fund increased 4.9% during the quarter. One timely position to discuss is Bassett Furniture Industries, Incorporated (NASDAQ:BSET). BSET is a 120-year-old manufacturer, wholesaler, and retailer of upper-middle / upper-end furniture. This is an asset heavy company. On the back-end they own and operate 2 wood manufacturing facilities in Virginia, 2 upholstery facilities in North Carolina and Alabama, and 3 warehouses. They own and operate 8 retail locations that cover more than 200k sq feet of retail space; and they operate another 49 owned stores that are leased. Additional distribution comes from 31 Bassett branded retail stores operated by 3rd parties, as well as wholesale sales into other retailers. Up until 2022 BSET had an internal distribution (trucking) company; this was sold to J.B. Hunt for $87mm with part of the proceeds used for a special dividend.
BSET has historically generated a 4-5% EBIT margin across its wholesale and retail business. Right now they are slightly loss making as the industry works through a glut in supply. LTM revenue is at $390mm which is right around where the company used to run pre-covid. Of course sales could dip further as retailers de-stock and demand lags given higher interest rates and slower home sales. But long-term I think it is fair to assume that this company could generate something like $20mm of EBIT…” (Clik here to read the full text)
A closeup of a blue-collar worker producing a sofa for a retail company.
Bassett Furniture Industries, Incorporated (NASDAQ:BSET) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Bassett Furniture Industries, Incorporated (NASDAQ:BSET) was held by 9 hedge fund portfolios, compared to 6 in the previous quarter, according to our database. In addition, please check out our hedge fund investor letters Q1 2024 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.
