Miller Value Partners, an investment management company, released its “Deep Value Select Strategy” fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. In the fourth quarter, Strategy returned +1.67% net-of-fees trailing the S&P 1500 Value Index’s +13.70% return. For the full year, the strategy returned +9.86% behind the S&P 1500 Value Index’s +21.64% due to weaker Q4 performance. Due to a weaker September and October, the strategy’s smaller cap assets suffered a large contraction in valuation, which contributed to the underperformance in the quarter. December witnessed a good comeback for the strategy. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Miller Value Deep Value Select Strategy featured stocks such as Western Alliance Bancorporation (NYSE:WAL) in the fourth quarter 2023 investor letter. Western Alliance Bancorporation (NYSE:WAL) is a bank holding company headquartered in Phoenix, Arizona. On January 22, 2024, Western Alliance Bancorporation (NYSE:WAL) stock closed at $66.08 per share. One-month return of Western Alliance Bancorporation (NYSE:WAL) was -1.51%, and its shares lost 1.81% of their value over the last 52 weeks. Western Alliance Bancorporation (NYSE:WAL) has a market capitalization of $7.234 billion.
Miller Value Deep Value Select Strategy stated the following regarding Western Alliance Bancorporation (NYSE:WAL) in its fourth quarter 2023 investor letter:
“During the quarter, our largest positive contributor was Western Alliance Bancorporation (NYSE:WAL), whose market price was up more than 40%. Western is a leading national commercial bank with a capital-light business model. The company appears to me to be positioned for long-term growth at the high end of their peer group. WAL has industry-leading underwriting (as evidenced by their low loss rate) and return on assets, which, in my view, support their 18-20% target return on common tangible equity target.Consensus expectations remains in the 15% range potentially providing a nice ongoing variant. Western’s mortgage business is also a “hidden asset” not being sufficiently recognized in the company’s current share price in my opinion. At more than 10% of their company revenue and near trough profitability, any future recovery in the mortgage market from lower interest rates could provide greater future earnings power. WAL’s shares remain attractively priced with a price-to-estimated earnings ratio (FY2) below 7x, a 40% discount to its historical long-term average and a greater than 30% discount to their banking peer group.”
A banker closely examining a document while seated at his desk.
Western Alliance Bancorporation (NYSE:WAL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held Western Alliance Bancorporation (NYSE:WAL) at the end of third quarter which was 38 in the previous quarter.
We discussed Western Alliance Bancorporation (NYSE:WAL) in another article and shared the list of most profitable value stocks. 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.
