Bonhoeffer Capital Management, an asset management company, released its fourth-quarter investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund returned 13.3% net of fees, the MSCI World ex-US Index returned 14.9%, and DFA International Small Cap Value Fund returned 19.4% for the same period. For the full year 2022, the fund returned -20.5%, compared to -16.0% and -9.8% return respectively for the indexes. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Bonhoeffer Capital Management highlighted stocks like Builders FirstSource, Inc. (NYSE:BLDR) in its Q4 2022 investor letter. Headquartered in Dallas, Texas, Builders FirstSource, Inc. (NYSE:BLDR) is a building material, manufactured components, and construction services provider. On March 10, 2023, Builders FirstSource, Inc. (NYSE:BLDR) stock closed at $81.64 per share. One-month return of Builders FirstSource, Inc. (NYSE:BLDR) was 1.64%, and its shares gained 9.83% of their value over the last 52 weeks. Builders FirstSource, Inc. (NYSE:BLDR) has a market capitalization of $11.267 billion.
Bonhoeffer Capital Management made the following comment about Builders FirstSource, Inc. (NYSE:BLDR) in its Q4 2022 investor letter:
“One of our holdings in the distribution theme is Builders FirstSource, Inc. (NYSE:BLDR), a clustered building products distribution firm. BFS’s growth model is through same-store sales growth (6% per year based upon increased home sales of 1.5 million units from 1.0 million units) and synergistic M&A (4% per year). These are enhanced by opportunistic operational leverage from scale and share repurchases (5% annual growth). Over the past five years, BFS’s net income margins are up from 2% to 13%, with a 3x increase in revenues. These factors should lead to about a 16% EPS growth going forward. BFS has had 82% EPS growth over the past five years. Since August 2021, BFS has repurchased 34% of its common stock.
The real driver is the pace at which new home and other construction rebounds from the interest rate shock of the last 18 months. We have used analyst estimates for revenue and free cash flow/earnings for the next two years and longer-term growth assumptions described above. We have also assumed 50% of free cash flow will be used for repurchases (and this may be conservative based upon the past 18 months’ repurchase levels).…” (Click here to read the full text)
Builders FirstSource, Inc. (NYSE:BLDR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 52 hedge fund portfolios held Builders FirstSource, Inc. (NYSE:BLDR) at the end of the fourth quarter which was 49 in the previous quarter.
We discussed Builders FirstSource, Inc. (NYSE:BLDR) in another article and shared the list of most undervalued industrial stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q4 2022 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.
