White Brook Capital Partners, an investment management firm, released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. White Brook Capital’s middle capitalization focused fund had a forgettable year in 2024. With the announcement of fourth-quarter earnings and positive 2025 outlook by the fund’s portfolio companies, fortunes have turned around thus far in 2025. The portfolio’s dominant theme is that it owns quality businesses in sectors that for one reason or another are out of favor. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
White Brook Capital Partners highlighted stocks like OPENLANE, Inc. (NYSE:KAR) in its Q4 2024 investor letter. OPENLANE, Inc. (NYSE:KAR) is a digital marketplace for used vehicles. The one-month return of OPENLANE, Inc. (NYSE:KAR) was 5.09%, and its shares gained 45.91% of their value over the last 52 weeks. On January 27, 2024, OPENLANE, Inc. (NYSE:KAR) stock closed at $20.85 per share with a market capitalization of $2.228 billion.
White Brook Capital Partners stated the following regarding OPENLANE, Inc. (NYSE:KAR) in its Q4 2024 investor letter:
“OPENLANE, Inc. (NYSE:KAR) had a solid 2024. Similar to Greenbriar the company has executed well, increasing gross margins at low volumes, while operating in an industry trough. 2025 should see vehicle volumes continue the late 2024 uptrend and there’s no reason to believe that the market share gains experienced in 2024 shouldn’t continue. Also during late 2024, the Company held an investor day that highlighted the Company’s financing business. It appears the Company believes, as I do, that either its digital wholesale used car auction business is severely undervalued or its leading secured lending financing business is. At the investor day, the Company changed and added to its disclosure in order to help the market recognize the value of the asset. Despite protestations. I believe that should the Company not achieve better recognition of this business, management would be willing to separate and sell it in part or whole. If it gets the “right” valuation for the division, the stock is severely undervalued at the current price.”
A line of new and used cars in a large auto dealership’s showroom.
OPENLANE, Inc. (NYSE:KAR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held OPENLANE, Inc. (NYSE:KAR) at the end of the third quarter which was 24 in the previous quarter. In the third quarter, OPENLANE, Inc. (NYSE:KAR) reported $448 million in consolidated revenue, up 8% from Q3 2023. While we acknowledge the potential of OPENLANE, Inc. (NYSE:KAR) 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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In addition, please check out our hedge fund investor letters Q3 2024 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.