SRK Capital, an investment management firm, released its fourth quarter 2023 investor letter. A copy of the same can be downloaded here. In 2023, the SRK Fund appreciated 17.15% while the S&P 500 and the Russell 2000 appreciated 26.29% and 16.93%, respectively. The fund increased 869.94% compared to 98.88% and 41.75% for the indexes respectively. The Fund underperformed the S&P 500 for the first time in 2023. In addition, please check the fund’s top five holdings to know its best picks in 2023.
SRK Capital featured stocks such as Heritage Global Inc. (NASDAQ:HGBL) in its Q4 2022 investor letter. Headquartered in San Diego, California, Heritage Global Inc. (NASDAQ:HGBL) is an asset services company. On February 20, 2024, Heritage Global Inc. (NASDAQ:HGBL) stock closed at $2.9700 per share. One-month return of Heritage Global Inc. (NASDAQ:HGBL) was 0.34%, and its shares gained 15.56% of their value over the last 52 weeks. Heritage Global Inc. (NASDAQ:HGBL) has a market capitalization of $109.618 million.
SRK Capital stated the following regarding Heritage Global Inc. (NASDAQ:HGBL) in its fourth quarter 2023 investor letter:
“Heritage Global Inc. (NASDAQ:HGBL) reported Q3 earnings that failed to meet expectations due to a credit loss reserve that was taken in the specialty lending segment, caused by their largest borrower experiencing slower charged-off collections. I don’t believe this is a long-term issue as slower collections are being experienced industry-wide as the level of charge-offs continues to normalize to pre-pandemic trends. This normalization continues to benefit Heritage’s brokerage business with operating income growth of 64% year-over-year and 140% for the nine months of 2023. Reports from credit card issuers indicate that net charge-offs continue to increase above 2019 levels. An interesting anecdote driving charge-offs is the millions of Americans whose credit worthiness improved during the pandemic thanks to less spending, government stimulus, and forbearance on some payments. This migration to better risk tiers appears to have deceived many of these lenders as they optimistically lent to this group of individuals who have now seemingly reverted back to their historical credit worthiness and are falling behind on their debt payments. This trend should drive continued growth in revenue and earnings for Heritage Global. The stock sell-off following the Q3 earnings report provided us with an attractive opportunity to add to our position at less than 10x expected earnings.”
A close-up of a stock exchange board, displaying the active trading of the company’s securities.
Heritage Global Inc. (NASDAQ:HGBL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Heritage Global Inc. (NASDAQ:HGBL) was held by 10 hedge fund portfolios, up from 8 in the previous quarter, according to our database. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.
Suggested Articles:
- 13 Largest Refineries in the US
- 15 Poorest Cities in the US that are Actually Growing Fast
- 23 Richest Countries That Give Citizenship By Birth
Disclosure: None. This article is originally published at Insider Monkey.
