Miller Value Partners, an investment management company, released its “Deep Value Select Strategy” third-quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, Strategy returned +15.50% net-of-fees ahead of the S&P 1500 Value Index -4.20% return. Year to date through September 30, 2023, the fund returned +8.56% (net of fees) compared to +6.98% return for the index. Most of the strategy’s investments participated in the stronger quarter. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Miller Value Deep Value Select Strategy highlighted stocks like Bread Financial Holdings, Inc. (NYSE:BFH) in the third quarter 2023 investor letter. Headquartered in Columbus, Ohio, Bread Financial Holdings, Inc. (NYSE:BFH) provides tech-forward payment and lending solutions. On October 17, 2023, Bread Financial Holdings, Inc. (NYSE:BFH) stock closed at $31.40 per share. One-month return of Bread Financial Holdings, Inc. (NYSE:BFH) was -9.56%, and its shares gained 5.26% of their value over the last 52 weeks. Bread Financial Holdings, Inc. (NYSE:BFH) has a market capitalization of $1.577 billion.
Miller Value Deep Value Select Strategy made the following comment about Bread Financial Holdings, Inc. (NYSE:BFH) in its Q3 2023 investor letter:
“Recently we initiated a position in Bread Financial Holdings, Inc. (NYSE:BFH), formerly Alliance Data Systems. The company share price is down near historical recessionary price lows. Bread Financial provides proprietary direct-to-consumer credit cards and deposits along with digitally enabled private-label, co-branded credit cards, installment loans and buy now, pay later (BNPL). New management joined the company in 2020 and has completed a multi-year transformation to streamline its business model, develop differentiated products and expand brand partnerships. A new CFO has also dramatically improved the company’s balance sheet, enhancing their capital ratios nearly 3x to 9%+, reducing debt by $1.7B and increasing direct to consumer deposits by nearly $5B. Since 2020, BFH’s tangible book value has grown by >30% and is approaching $40/share. While the marketplace is concerned with potential industry changes to late fee payments and weaker consumer spending, management believes they will be profitable even if a deeper (2008-09-style) recession occurs.
We believe current marketplace concerns are significantly discounted in BFH’s low valuation, price to earnings (FY2) of 3.3x, and 25% discount to current tangible book value. Management’s long-term return-on-equity target is also significantly higher than market expectations providing a nice variant. We believe BFH upside potential over the next 3-5 years is more than three times the current share price.”
Bread Financial Holdings, Inc. (NYSE:BFH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 25 hedge fund portfolios held Bread Financial Holdings, Inc. (NYSE:BFH) at the end of second quarter which was 20 in the previous quarter.
We discussed Bread Financial Holdings, Inc. (NYSE:BFH) in another article and shared the list of best stocks to buy for medium term. In addition, please check out our hedge fund investor letters Q3 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.
