SouthernSun Asset Management, LLC, an investment management firm, released its “SouthernSun SMID Cap Strategy” second quarter 2023 investor letter. A copy of the same can be downloaded here. In the second quarter, the strategy returned 11.26% on a gross basis (11.04% net) compared to a 5.22% return for the Russell 2500 Index and 4.37% for the Russell 2500 Value Index. Since its inception, the strategy has continued to outperform both indexes on an annualized gross and net basis. The strategy returned 27.17% on a gross basis (26.29% net) over the trailing twelve months compared to 13.58% and 10.37% returns for indexes, respectively. In addition, please check the top 5 holdings of the strategy to know its best pick in 2023.
SouthernSun SMID Cap Strategy highlighted stocks like WestRock Company (NYSE:WRK) in the second quarter 2023 investor letter. Headquartered in Atlanta, Georgia, WestRock Company (NYSE:WRK) provides fiber-based paper and packaging solutions. On August 1, 2023, WestRock Company (NYSE:WRK) stock closed at $32.77 per share. One-month return of WestRock Company (NYSE:WRK) was 16.41%, and its shares lost 21.42% of their value over the last 52 weeks. WestRock Company (NYSE:WRK) has a market capitalization of $ 8.409 billion.
SouthernSun SMID Cap Strategy made the following comment about WestRock Company (NYSE:WRK) in its second quarter 2023 investor letter:
“WestRock Company (NYSE:WRK) was one of the top detractors in the SMID Cap strategy in the second quarter, and we exited our position in May of 2023. Westrock is a leading producer of packaging and paper with a broad portfolio of corrugated and consumer packaging, product displays and kraft paper with operations based in the U.S. and Latin America. Westrock has grown primarily through acquisitions, and debt levels have crept up over time. In March of 2021, a new management team came onboard, and they have been working to improve returns on capital by shutting down older mills and installing new, more efficient machines for products going into growing markets. Several competitors have announced they will be adding capacity in the next few years by converting old newsprint facilities to kraft paper and corrugated production. While management has shown resolve in taking aggressive actions to improve Westrock’s return profile, we believe that current market conditions will make it difficult for them to earn long-term returns that meet our objective. We decided to reallocate the capital to other businesses that we believe have much better return profiles than Westrock.”
WestRock Company (NYSE:WRK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held WestRock Company (NYSE:WRK) at the end of first quarter which was 39 in the previous quarter.
We discussed WestRock Company (NYSE:WRK) in another article and shared the list of best packaging stocks to buy. In addition, please check out our hedge fund investor letters Q2 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.
