SouthernSun Asset Management, LLC, an investment management firm, released its “SouthernSun Small Cap Strategy” third quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, the strategy returned -7.56% on a gross basis (-7.73% net) compared to a -5.13% return for the Russell 2000 Index and -2.96 % for the Russell 2000 Value Index. The strategy returned 15.46 % on a gross basis (14.61% net) over the trailing twelve months compared to 8.93% and 7.84 %, respectively, for the indexes over the same period. In addition, please check the top 5 holdings of the strategy to know its best pick in 2023.
SouthernSun Small Cap Strategy highlighted stocks like Dycom Industries, Inc. (NYSE:DY) in the third quarter 2023 investor letter. Headquartered in Palm Beach Gardens, Florida, Dycom Industries, Inc. (NYSE:DY) provides contracting services to the telecommunications infrastructure and utility industries. On October 26, 2023, Dycom Industries, Inc. (NYSE:DY) stock closed at $85.08 per share. One-month return of Dycom Industries, Inc. (NYSE:DY) was -5.54%, and its shares lost 26.86% of their value over the last 52 weeks. Dycom Industries, Inc. (NYSE:DY) has a market capitalization of $2.496 billion.
SouthernSun Small Cap Strategy made the following comment about Dycom Industries, Inc. (NYSE:DY) in its Q3 2023 investor letter:
“Dycom Industries, Inc. (NYSE:DY), a leading provider of engineering and construction services to the telecommunications and utility industries, was the top detractor in the Small Cap strategy, despite delivering solid revenue (+7%) and adjusted EBITDA growth (+25%). Management expects flat revenue growth next quarter due to a moderation in spending from two large customers (AT&T and Frontier), but a very strong demand environment in 2024 – driven partly by unprecedented government funding through the ARPA, RDOF, and BEAD programs. Profitability continues to improve from the depressed levels of the last few years, and we continue to believe there is further room for margin expansion. Our meetings and construction site visits with management this quarter in Nashville, TN gave us a renewed appreciation for the difficulty of managing construction projects and a deeper conviction that Steve Nielsen, CEO has a deep understanding of the industry and a decision-making framework driven by shareholder returns. With only 43% of the homes in the U.S. passed with fiber, we continue to believe there is a long runway for fiber penetration, and Dycom is well-positioned to engineer and construct these fiber networks.”
An engineer in her office examining a blueprint, surrounded by engineering components. Editorial photo for a financial news article. 8k. –ar 16:9
Dycom Industries, Inc. (NYSE:DY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held Dycom Industries, Inc. (NYSE:DY) at the end of second quarter which was 30 in the previous quarter.
We discussed Dycom Industries, Inc. (NYSE:DY) in another article and shared Aristotle Capital Small Cap Equity Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q3 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.
