Heartland Advisors, an investment management firm, published its “Heartland Value Fund” second-quarter 2022 investor letter – a copy of which can be downloaded here. The ever-popular NASDAQ Composite was hit hard, dropping -30% year to date, while the S&P 500 Index fell by -20%. Many unprofitable companies, once valued in the billions, have plummeted -50%, -75%, or more, from their recent highs. Small value stocks were not spared but held up better, with the Russell 2000 Value Index off -17.3% and the Heartland Small Cap Value Strategy down -14.2% year to date. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, Heartland Value Fund mentioned Carriage Services, Inc. (NYSE:CSV) and explained its insights for the company. Founded in 1991, Carriage Services, Inc. (NYSE:CSV) is a Houston, Texas-based funeral and cemetery services, and merchandise provider with a $638.8 million market capitalization. Carriage Services, Inc. (NYSE:CSV) delivered a -33.41% return since the beginning of the year, while its 12-month returns are up by 17.43%. The stock closed at $42.91 per share on July 25, 2022.
Here is what Heartland Value Fund has to say about Carriage Services, Inc. (NYSE:CSV) in its Q2 2022 investor letter:
“One such opportunity is Carriage Services (NYSE:CSV), a leading owner of funeral homes and cemetery operations throughout the country. CSV’s economies of scale, professional management, and superior operating model have allowed it to take share organically and through value-added acquisitions, in what we view as an attractive, highly cash flow generative industry. CSV is a long-tenured holding in the portfolio; however, its weighting has fluctuated, based on our view of its attractiveness. In 2021, a COVID-19-related spike in mortality rates boosted fundamentals and the stock price with it, causing us to reduce our holdings by around 20%. More recently, the stock has sold off materially, likely in sympathy with its consumer discretionary peers that are often economically sensitive. We continue to forecast robust fundamentals for CSV as its demand tends to be highly inelastic. Trading at less than 10 times enterprise value to EBITDA and at 11 times Heartland’s estimate of current year earnings, we think CSV is an attractive investment, so we built back the position over the last quarter.”
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Our calculations show that Carriage Services, Inc. (NYSE:CSV) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Carriage Services, Inc. (NYSE:CSV) was in 24 hedge fund portfolios at the end of the second quarter of 2022, compared to 22 funds in the previous quarter. Carriage Services, Inc. (NYSE:CSV) delivered a -13.71% return in the past 3 months.
In May 2022, we also shared another hedge fund’s views on Carriage Services, Inc. (NYSE:CSV) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
