Fred Alger Management, an investment management company, released its “Alger Spectra Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, the fund underperformed the Russell 3000 Growth Index. The energy and consumer staples sectors were the contributors to the fund’s relative performance in the quarter, while communication services and health care detracted. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Alger Spectra Fund highlighted stocks like GGFL Environmental Inc. (NYSE:GFL) in the third quarter 2023 investor letter. Headquartered in Vaughan, Canada, GFL Environmental Inc. (NYSE:GFL) offers non-hazardous solid waste management and environmental services. On November 3, 2023, GFL Environmental Inc. (NYSE:GFL) stock closed at $29.93 per share. One-month return of GFL Environmental Inc. (NYSE:GFL) was -8.11%, and its shares gained 16.73% of their value over the last 52 weeks. GFL Environmental Inc. (NYSE:GFL) has a market capitalization of $11.074 billion.
Alger Spectra Fund made the following comment about GFL Environmental Inc. (NYSE:GFL) in its Q3 2023 investor letter:
“GFL Environmental Inc. (NYSE:GFL) is a leading solid waste and environmental services company with operations in the U.S. and Canada. GFL went through a period of M&A over the past few years, which included inheriting sizable debt. Since then, GFL has committed to reducing that high leverage by 2025 by selling off non-core assets and focusing on generating high free cash flow. During the quarter, shares detracted from performance, as investors viewed GFL as an inflation beneficiary whose earnings growth would slow as inflation moderates. Additionally, the company saw a moderate decline in volumes that some market participants viewed as potentially hindering GFL’s ability to raise prices as company de input costs increased. After speaking with the GFL management team, we believe the volume decline seen during the quarter was attributed to GFL exiting low profit margin businesses. In our view, GFL has the ability to increase prices above input cost inflation, driving operating profit growth. Given the fact that waste management is an essential service, we believe GFL has a top position in each market they serve. Moreover, we believe GFL should produce resilient cash flow generation in a slowing economy, as they de-lever their balance sheet to an investment grade range by end of 2024, which could potentially drive GFL’s valuation to increase to levels closer to industry peers, in our view.”
Aerial view of a landfill, with the waste management company’s flagship vehicles toiling away.
GFL Environmental Inc. (NYSE:GFL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held GFL Environmental Inc. (NYSE:GFL) at the end of second quarter which was 21 in the previous quarter.
We discussed GFL Environmental Inc. (NYSE:GFL) in another article and shared Ave Maria Focused Fund’s views on the company in the previous quarter. 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.
