Here’s Why Third Avenue Management Small-Cap Value Fund Exited EMCOR Group (EME)

Third Avenue Management, an investment management company based in New York City, released its “Small-Cap Value Fund” second quarter 2023 investor letter. A copy of the same can be downloaded here. Unlike the volatile first quarter, there was a methodological increase in returns in the second quarter. The fund returned 2.98% in Q2 compared to a 3.18% return for the Russell 2000 Value Index. For the first half of 2023, the fund returned 7.27% compared to 2.50% for the benchmark. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.

Third Avenue Small-Cap Value Fund highlighted stocks like EMCOR Group, Inc. (NYSE:EME) in the second quarter 2023 investor letter. Headquartered in Norwalk, Connecticut, EMCOR Group, Inc. (NYSE:EME) offers electrical and mechanical construction and facilities services. On July 31, 2023, EMCOR Group, Inc. (NYSE:EME) stock closed at $215.04 per share. One-month return of EMCOR Group, Inc. (NYSE:EME) was 16.91%, and its shares gained 86.76% of their value over the last 52 weeks. EMCOR Group, Inc. (NYSE:EME) has a market capitalization of $10.243 billion.

Third Avenue Small-Cap Value Fund made the following comment about EMCOR Group, Inc. (NYSE:EME) in its second quarter 2023 investor letter:

“EMCOR Group, Inc. (NYSE:EME) and Madison Square Garden Entertainment were eliminated in the second quarter. EMCOR Group has been in the portfolio for nearly twelve years and was an outstanding performer as the company generated a 20% annualized return over the holding period. The market capitalization was approaching $8 billion when we exited the position. Consistent with our strategy, we prefer to own companies with market capitalizations below $3 billion. Yet, we do not have a “hard sell” when market capitalizations surpass $3 billion. Instead, it becomes an easier candidate for sale when valuations are elevated. We believe the combination of valuation and market capitalization achieved in the second quarter justified exiting the position. We wish the management team well as they have built an outstanding company.”

Photo by scott-blake on Unsplash

EMCOR Group, Inc. (NYSE:EME) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held EMCOR Group, Inc. (NYSE:EME) at the end of first quarter which was 29 in the previous quarter.

We discussed EMCOR Group, Inc. (NYSE:EME) in another article and shared the list of largest construction companies in the US. 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.