Heartland Advisors, an investment management firm, published its “Heartland Mid Cap Value Fund” fourth-quarter 2021 investor letter – a copy of which can be seen here. Security selection was mixed with holdings in Materials and Consumer Discretionary bolstering returns; however, the portfolio couldn’t overcome weakness in Financials and Information Technology, and the Strategy lagged the Russell Mid Cap® Value Index for the quarter. The portfolio finished the year up more than 20% and kept pace with its benchmark. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Heartland Mid Cap Value Fund, in its Q4 2021 investor letter, mentioned PPG Industries, Inc. (NYSE: PPG) and discussed its stance on the firm. PPG Industries, Inc. is a Pittsburgh, Pennsylvania-based manufacturing company with a $36.7 billion market capitalization. PPG delivered a -10.21% return since the beginning of the year, while its 12-month returns are up by 14.94%. The stock closed at $154.83 per share on January 27, 2022.
Here is what Heartland Mid Cap Value Fund has to say about PPG Industries, Inc. in its Q4 2021 investor letter:
“A material advantage. While higher input costs and supply chain bottlenecks were a common theme across many industries, some areas were better suited than others to pass along price increases and navigate logistical challenges. The Materials sector is one example. The portfolio’s holdings in the space outperformed the benchmark average and contained a top contributor, PPG Industries Inc. (PPG).
PPG is the second-largest coatings supplier in the world and boasts the top market share in the industrial space, including auto refinishing and original equipment manufacturing (OEM), aerospace, and general industrial. The company is second only to Sherwin-Williams in the architectural coatings market.
Shares of PPG lagged sector peers in early autumn after management warned that earnings would come in lower than expected for the third quarter and withdrew sales guidance for the period. Shortages of key coating ingredients have tightened inventories and caused costs to rise. Externally, customers, including those in the automotive industry, have slowed production as they grapple with their own supply chain issues. The moves have had a chain reaction resulting in a decline in orders for PPG products.
The company has responded to the above headwinds by aggressively raising per-unit pricing including a 6% increase in the fourth quarter and another hike planned for the first quarter of 2022. PPG’s stock responded favorably as real-time indicators suggest cost pressures may be at or near a peak.
Despite PPG being a provider of key components for its customers and uniquely positioned to benefit from the shift toward electric vehicles (EVs), the company trades at a discount to historical levels against both the S&P 500 and its peers.”
jakob-rosen-jq0RCl1nl9I-unsplash
Our calculations show that PPG Industries, Inc. (NYSE: PPG) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. PPG was in 30 hedge fund portfolios at the end of the third quarter of 2021, compared to 26 funds in the previous quarter. PPG Industries, Inc. (NYSE: PPG) delivered a -3.57% return in the past 3 months.
In December 2021, we also shared another hedge fund’s views on PPG 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.
