Emeth Value Capital, an investment management company, released its fourth-quarter investor letter. A copy of the same can be downloaded here. In 2023, the fund returned +42.58% compared to +22.30% for the MSCI ACWI Index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Emeth Value Capital featured stocks such as Driven Brands Holdings Inc. (NASDAQ:DRVN) in the fourth quarter 2023 investor letter. Headquartered in Charlotte, North Carolina, Driven Brands Holdings Inc. (NASDAQ:DRVN) provides automotive services to retail and commercial customers. On February 2, 2024, Driven Brands Holdings Inc. (NASDAQ:DRVN) stock closed at $13.34 per share. One-month return of Driven Brands Holdings Inc. (NASDAQ:DRVN) was -2.63%, and its shares lost 53.14% of their value over the last 52 weeks. Driven Brands Holdings Inc. (NASDAQ:DRVN) has a market capitalization of $2.187 billion.
Emeth Value Capital stated the following regarding Driven Brands Holdings Inc. (NASDAQ:DRVN) in its fourth quarter 2023 investor letter:
“Driven Brands Holdings Inc. (NASDAQ:DRVN) is the largest automotive services platform in North America with more than five thousand corporate owned and franchised store locations operating across quick serve oil change, maintenance and repair, collision, paint, auto glass, auto parts distribution, and car wash. The group serves more than seventy million vehicles annually and owns several of the most recognized brands in the industry, including Meineke, Take 5 Oil Change, Maaco, and Carstar. Over the past decade, Driven Brands has expanded its location count by more than threefold, grown its system-wide sales by more than sixfold, and increased profits by nearly fifteenfold. The group is majority owned by Roark Capital, a leading private equity investor in franchise business models, and has been led by Jonathan Fitzpatrick, CEO, since 2012. Fitzpatrick personally owns more than $30 million of Driven Brands common stock and the vast majority of his and his management team’s compensation is tethered to generating long-term shareholder value.
The automotive care industry in the United States is large, growing, and highly fragmented. In aggregate, the total addressable market is estimated to be $350+ billion and encompasses a wide range of services, including automotive repair and maintenance, heavy collision repair, paint, auto glass, and car wash. There is a steadily growing car parc of 285 million vehicles in the U.S., which travel in excess of three trillion miles annually, and the automotive care industry plays a role in keeping this essential transportation infrastructure operating. The industry has proven to be recession-resistant and has a long track record of consistent growth, having grown at four percent per annum since 2007. In addition, several structural tailwinds will continue to drive predictable long-term industry growth. The number of vehicles in operation, average vehicle age, and vehicle complexity are all increasing, which in turn drives growth in demand for vehicle maintenance and cost of repair. Moreover, the continued shift in consumer preference toward do-it-for-me (DIFM) versus do-it-yourself (DIY) has increased the market for professional services. With respect to the competitive landscape, the automotive care industry in effectively every sub-segment remains highly fragmented. For instance, roughly eighty percent of auto service locations are comprised of smaller chains and independent shops, which provides scaled multi-site operators (MSOs) significant whitespace for organic and inorganic growth. This bodes well for Driven Brands, as it has the ability to invest in the required technology, infrastructure, and equipment to service more complex cars, and receives preference from insurance carriers and fleet operators who wish to work with nationally scaled and recognized chains…”(Click here to read the full text)
A mechanic working in a busy automotive service station, attended by customers.
Driven Brands Holdings Inc. (NASDAQ:DRVN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held Driven Brands Holdings Inc. (NASDAQ:DRVN) at the end of third quarter which was 20 in the previous quarter.
We discussed Driven Brands Holdings Inc. (NASDAQ:DRVN) in another article and shared the list of most promising car stocks according to analysts. In addition, please check out our hedge fund investor letters Q4 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.
