We recently compiled a list of the HG Vora Capital Management’s Stock Picks For 2025. In this article, we are going to take a look at where Driven Brands Holdings Inc. (NASDAQ:DRVN) stands against the other stocks.
HG Vora Capital Management was founded in 2009 as a hedge fund specializing in investing in event-driven, credit, and distressed special situations. The New York-based hedge fund has more than $5 billion in assets under management and reported more than $1.3 billion in securities in its latest 13F filing. While it is not positioning itself as an activist fund, HG Vora Capital has engaged with companies’ management on several occasions. As we go through some of HG Vora Capital’s stock picks, we will see some examples of the interactions that the fund had or is having with the companies it’s invested in.
Parag Vora, the founder of HG Vora, is a seasoned investor with decades of experience. Prior to founding HG Vora, Parag worked at Silver Point Capital, focusing on distressed assets and event-driven opportunities. Before Silver Point, Parag served as a Vice President in the Investment Banking Division at Goldman Sachs, advising real estate and consumer companies on M&A and leveraged financing.
HG Vora usually holds a relatively concentrated portfolio. However, over the last several years, the fund’s equity portfolio somewhat scaled down. At the end of 2021, HG Vora held 24 positions with a total value of $2.79 billion, according to its 13F filing for the period. It’s worth mentioning that such fluctuations in portfolio size can be observed during previous years as well. The reduced equity portfolio size could be attributed to a more attractive debt market driven by higher interest rates or other catalysts. During a panel at the Global Alts 2023 event, Parag said that it was “an amazing time to own safer first-lien debt where you can make equity-like returns.”
In its Q4 2024 13F filing, HG Vora Capital reported ownership in 10 companies as of the end of 2024. In a subsequent filing with the Securities and Exchange Commission, HG Vora disclosed closing its only healthcare bet – ModivCare Inc (NASDAQ:MODV), in which it had previously held 1.0 million shares.
Currently, most companies in HG Vora Capital’s 13F portfolio are operating in the resort and casino industry. Most holdings are long-term investments that Parag Vora’s fund has been bullish on for at least three years.
A busy auto service bay with technicians servicing a car.
Driven Brands Holdings Inc. (NASDAQ:DRVN)
Shares held by HG Vora Capital Management: 7.40 million
Value of Position: $119.44 million
Next on the list of HG Vora Capital Management’s Stock Picks is Driven Brands Holdings Inc. (NASDAQ:DRVN), which owns a portfolio of North American automotive service brands, including Take 5 Oil Change, Meineke Car Care Centers, and 1-800-Radiator & A/C. HG Vora Capital Management added Driven Brands to its equity portfolio during the fourth quarter of 2023, after the stock plummeted by some 60% between May and October. In August 2023, after weaker-than-anticipated quarterly results, Driven Brands Holdings Inc. (NASDAQ:DRVN) had to slash its guidance and the management stated that it would have to cut the scope of its auto-glass network by a third due to issues with integrating the auto-glass network. Later, Driven Brands had to take a goodwill impairment of $1.0 billion on its car wash segment after previously having disclosed declines in same store car wash sales. Nevertheless, in 2024, the company showed some signs of recovery with its stock gaining more than 20%. In its last quarterly report, for the third quarter of 2024, Driven Brands Holdings Inc. (NASDAQ:DRVN) posted adjusted EPS of $0.26, beating the consensus estimate of $0.22, while its revenue of $591.7 million was slightly lower than anticipated and grew by 2% on the year, while same store sales appreciated by 1.1% on the year. The growth was driven by strong performance of the Take 5 Oil Change segment, which recorded 15% revenue growth and a 5% same store sales increase.
Overall DRVN ranks 6th on our list of HG Vora Capital Management’s stock picks for 2025. While we acknowledge the potential of DRVN 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 more promising than DRVN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
