Heartland Advisors, an investment management company, released its “Heartland Value Plus Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, the strategy was down approximately 5% underperforming the Russell 2000 Small-Cap Value Index’s -2.96% returns. The outperformance of the strategy over the past five years was attributed to the stock selection. However, this was not the case in the third quarter, the selection effect detracted in most sectors. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Heartland Value Plus Fund highlighted stocks like Carter’s, Inc. (NYSE:CRI) in the third quarter 2023 investor letter. Headquartered in Atlanta, Georgia, Carter’s, Inc. (NYSE:CRI) designs, sources, and markets branded childrenswear. On October 12, 2023, Carter’s, Inc. (NYSE:CRI) stock closed at $64.14 per share. One-month return of Carter’s, Inc. (NYSE:CRI) was -7.39%, and its shares lost 10.92% of their value over the last 52 weeks. Carter’s, Inc. (NYSE:CRI) has a market capitalization of $2.39 billion.
Heartland Value Plus Fund made the following comment about Carter’s, Inc. (NYSE:CRI) in its Q3 2023 investor letter:
“We’ve seen a fair amount of insider buying in our holdings, an encouraging sign that gives us confidence to hold tight. One such company is Carter’s Inc. (NYSE:CRI), which sells apparel for babies and children under the Carter’s and OshKosh B’gosh brands. So far in 2023, CRI has returned $96.6 million to shareholders in the form of share repurchases and cash dividends. That brings the repurchase and dividend totals to roughly $3 billion over the past 15 years.
Like all retailers, Carter’s has been undertaking inventory reduction in the aftermath of the pandemic. CRI, however, was 6 to 12 months ahead of other retailers in managing its inventories, a focal point of Carter’s self-help strategy. Since there is limited fashion risk in baby and infant apparel, the company recently packed a portion of its inventory in storage to be brought back later, thereby avoiding the need for steep discounts to work down backlogs. Management has also done a good job de-risking its supply chain in China and globally. For example, Carter’s was early to recognize that low water levels in the Panama Canal threatened delays through that waterway and moved to reduce the amount of its merchandise going through that route.
Meanwhile, CRI has an enviable balance sheet, very little debt, and very strong free cash flow. Yet, the stock trades at less than 12X earnings and less than 7X enterprise value to EBITDA.”
A colorful assortment of children’s apparel with different themes, capturing the dynamism of the business. Editorial photo for a financial news article. 8k. –ar 16:9
Carter’s, Inc. (NYSE:CRI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held Carter’s, Inc. (NYSE:CRI) at the end of second quarter which was 27 in the previous quarter.
We discussed Carter’s, Inc. (NYSE:CRI) in another article and shared the list of best stocks to buy for retirement. 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.
