Is it a Smart Choice to Invest in Hexcel (HXL)?

LRT Capital Management, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. A return of +30.47% was recorded by the LRT Economic Moat strategy year-to-date, putting its 24-month return to +4.34%. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

LRT Capital Management, in its Q4 2021 investor letter, mentioned Hexcel Corporation (NYSE: HXL) and discussed its stance on the firm. Hexcel Corporation is a Stamford, Connecticut-based industrial materials company with a $4.7 billion market capitalization. HXL delivered an 8.03% return since the beginning of the year, while its 12-month returns are up by 0.92%. The stock closed at $55.96 per share on March 03, 2022.

Here is what LRT Capital Management has to say about Hexcel Corporation in its Q4 2021 investor letter:

“Hexcel manufactures carbon fiber composite materials with the primary end markets being aerospace and defense. The company’s stock price was hit heavily last year due to the decline in the aerospace market, but the stock is making an impressive comeback this year as the outlook for travel and aerospace demand improves. The near-term demand for lightweight, high-performance carbon fiber composites is still uncertain, but the longer-term trend is clearly very strong. As airplane manufacturers look to improve the fuel efficiency and performance of their planes, the primary way of doing this is to reduce weight. The 787, 777X and A350 are just the most recent examples of planes from Boeing and Airbus that utilize an increasing amount of carbon fiber materials in their construction.

Just as is the case with Marriott, we do not view recent results as meaningful or indicative of a long-term trend, but rather a once in a century aberration due to the Covid-19 pandemic. Once Covid-19 recedes, we expect the demand for more fuel-efficient planes to return rather quickly, powering the demand for the company’s light weight carbon composites.”

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Our calculations show that Hexcel Corporation (NYSE: HXL) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. HXL was in 26 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 21 funds in the previous quarter. Hexcel Corporation (NYSE: HXL) delivered an 8.74% return in the past 3 months.

In November 2021, we also shared another hedge fund’s views on HXL in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.