Greystone Capital Management, an investment management company, released its fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the return for separate accounts managed by the firm ranged from +16.4% to +20.4%. The median account returned +18.1%, net of fees in Q4, and +11.8%, net of fees for the full year 2023. In the fourth quarter and FY2023, results exhibited both favorably and unfavorably when compared to the returns of S&P 500 and Russell 2000, which were +11.7% and +14.0% respectively during the quarter and +26.3% and +16.9% for the entire year. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Greystone Capital Management featured stocks such as Limbach Holdings, Inc. (NASDAQ:LMB) in the fourth quarter 2023 investor letter. Headquartered in Warrendale, Pennsylvania, Limbach Holdings, Inc. (NASDAQ:LMB) is an integrated building systems solutions company. On February 2, 2024, Limbach Holdings, Inc. (NASDAQ:LMB) stock closed at $43.38 per share. One-month return of Limbach Holdings, Inc. (NASDAQ:LMB) was 2.02%, and its shares gained 239.44% of their value over the last 52 weeks. Limbach Holdings, Inc. (NASDAQ:LMB) has a market capitalization of $477.327 million.
Greystone Capital Management stated the following regarding Limbach Holdings, Inc. (NASDAQ:LMB) in its fourth quarter 2023 investor letter:
“Limbach Holdings, Inc. (NASDAQ:LMB) is our construction and engineering services business, that was our best performer during 2023. Both intrinsic value changes and multiple expansion took place quickly for Limbach this year, but significant upside remains. A powerful investment thesis can exist when a company stops doing dumb things. A poor strategy, bad capital allocation and public market reputational damage plagued this business prior to our involvement.
The Limbach of today does smart things, by focusing on higher margin, more durable Owner-Direct revenues, and is being much more selective on General Contractor work, eliminating the bid-for-a-project-at-all-costs mentality that hampered progress previously. This led to record profitability for the business during FY23 and has turned the company into a cash flow machine, which will only continue as the business mix continues to shift more toward Owner Direct revenues, up from the 50/50 split between ODR and GCR today. This cash flow will also help on the M&A front, as Limbach is once again using their balance sheet to acquire complementary businesses within their fragmented industry, for 3-4x EBITDA, on which they executed two smaller deals in FY2023. As more deals come through the pipeline, at historical multiples, the combination of organic growth and M&A will juice free cash flow per share considerably.
In my prior experience as an NBA scout, my favorite players to watch (and recommend) were the guys who demanded the ball at the end of a close game. Prior to being promoted to CEO, Mike McCann was demanding the ball. It’s not often you see a microcap CEO attack his role with such vigor, and we’ve benefitted because of it. In addition, we are aligned. During Q3 of this year, Mike (along with CFO Jayme Brooks) purchased over $150k in stock on the open market, after the shares had appreciated over 200% on the year. I am thrilled to be invested alongside this management team and look forward to seeing what they will accomplish over time.”
A workforce of engineers and construction workers in professional gear, showcasing the company’s capabilities in developing energy infrastructure solutions.
Limbach Holdings, Inc. (NASDAQ:LMB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 12 hedge fund portfolios held Limbach Holdings, Inc. (NASDAQ:LMB) at the end of third quarter which was 9 in the previous quarter.
We discussed Limbach Holdings, Inc. (NASDAQ:LMB) in another article and shared Laughing Water Capital’s views on the company. 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.
