Is SPX FLOW (FLOW) A Smart Long-Term Buy?

Diamond Hill Capital, an investment management firm, published its “Diamond Hill Small Cap Fund” third-quarter 2021 investor letter – a copy of which can be downloaded here. The portfolio outpaced the Russell 2000® Index in the quarter, delivering nearly a 2% positive return against the index’s negative return and adding to year-to-date outperformance.  You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

Diamond Hill Small Cap Fund, in its Q3 2021 investor letter, mentioned SPX FLOW, Inc. (NASDAQ: FLOW) and discussed its stance on the firm. SPX FLOW, Inc. is a Charlotte, North Carolina-based pumps and pumping equipment company with a $3.4 billion market capitalization. FLOW delivered a 41.05% return since the beginning of the year, while its 12-month returns are up by 55.98%. The stock closed at $81.75 per share on November 12, 2021.

Here is what Diamond Hill Small Cap Fund has to say about SPX FLOW, Inc.  in its Q3 2021 investor letter:

“On an individual holdings’ basis, top contributors to return included SPX Flow. SPX Flow, a manufacturer of industrial flow control systems such as pumps, valves and mixers, benefited from news it had been approached by Ingersoll Rand about a possible acquisition. SPX rejected the proposal but is reviewing its strategic options, including interest from two other potential buyers. To us, this is a sign the market still undervalues this quality business but other strategic buyers see the value we do. We are confident management will either hold out for a price reflective of long-term intrinsic value or continue to execute as a standalone company, growing intrinsic value at an attractive rate for years to come.”

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Based on our calculations, SPX FLOW, Inc. (NASDAQ: FLOW) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. FLOW was in 14 hedge fund portfolios at the end of the first half of 2021, compared to 12 funds in the previous quarter. SPX FLOW, Inc. (NASDAQ: FLOW) delivered a 5.38% return in the past 3 months.

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