In this article, we discuss the top 10 stock picks of Mark Travis’s Intrepid Capital Management. If you want to skip our detailed analysis of Travis’s history, investment philosophy, and hedge fund performance, go directly to Mark Travis’s Intrepid Capital Management’s Top 5 Stock Picks.
Mark Travis is the co-founder of Intrepid Capital Management. Mark Travis, along with his father Forrest Travis, established the investment firm in 1994 in Jacksonville Beach, Florida. Both Mark Travis and Forrest Travis retired from a well-known brokerage house to start their own venture, away from the ascendancy of Wall Street.
Mark Travis currently serves as the chief executive officer, president, and lead portfolio manager at Intrepid Capital Management. The investment firm has $189.3 million in managed securities, and assets under management worth $419.7 million, according to the 13F filings at the end of June this year.
Travis received his Bachelor’s in economics from the University of Georgia, and has over 30 years of experience in asset management and investment strategies. At Intrepid Capital, Travis’s investment philosophy is to hold stakes in mutual funds like fixed-income funds, capital funds, equity endurance funds, and separately managed accounts as well.
Focusing on long-term, absolute returns, Mark Travis believes in an in-depth analysis of company fundamentals and a disciplined valuation process to select stocks for his investment portfolio. Some of the most notable stocks in Travis’s portfolio, as of June this year, include Twitter, Inc. (NYSE:TWTR), Dropbox, Inc. (NASDAQ:DBX), Alphabet Inc. (NASDAQ:GOOG), and Meta Platforms, Inc. (NASDAQ:FB), among others discussed at length below.
Intrepid Capital Management’s Q2 portfolio is dominated by stocks from the information technology, real estate, finance, consumer discretionary, industrials, and communications sectors. With a top ten holdings concentration of 35.57%, the largest stock in Travis’s Q2 portfolio is Skechers U.S.A., Inc. (NYSE:SKX), which accounts for 5.22% of his investment portfolio.
Photo by Joshua Hoehne on Unsplash
Why should we pay attention to Mark Travis’s stock picks? Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 86 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 86 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Our Methodology
Let’s take a look at Mark Travis’s Intrepid Capital Management’s top 10 stock picks. The stocks are ranked according to the value of each holding in Travis’s Q2 portfolio. We have also mentioned the number of hedge fund holders, latest earnings, and analyst ratings for each stock to give readers more context about these companies.
Mark Travis’s Intrepid Capital Management’s Top Stock Picks
10. SP Plus Corporation (NASDAQ:SP)
Intrepid Capital Management’s Stake Value: $4,644,000
Percentage of Intrepid Capital Management’s 13F Portfolio: 2.45%
Number of Hedge Fund Holders: 15
SP Plus Corporation (NASDAQ:SP), a top stock pick of Mark Travis’s Intrepid Capital Management, is an American provider of parking facilities, managing over one million parking spaces in the United States and Canada. Intrepid Capital Management owns 151,806 shares in SP Plus Corporation (NASDAQ:SP), worth $4.64 million, representing 2.45% of the firm’s portfolio for the end of June.
SP Plus Corporation (NASDAQ:SP) on October 27 announced earnings for the third quarter, with the Q3 EPS being $0.65, beating estimates by $0.15. The revenue for the quarter came in at $161.60 million, exceeding estimates by $11.38 million.
As of the end of the second quarter of 2021, 15 hedge funds were bullish on SP Plus Corporation (NASDAQ:SP), up from 10 in the preceding quarter.
In addition to Twitter, Inc. (NYSE:TWTR), Dropbox, Inc. (NASDAQ:DBX), Alphabet Inc. (NASDAQ:GOOG), and Meta Platforms, Inc. (NASDAQ:FB), SP Plus Corporation (NASDAQ:SP) is a notable stock in Travis’s Q2 portfolio.
Here is what Bernzott Capital Advisors has to say about SP Plus Corporation (NASDAQ:SP) in their Q4 2020 investor letter:
“SP Plus (SP): Parking operator SP Plus’s stock price finished 2020 -32%, but rallied +60% in 4Q. The company experienced significant negative impact due to reduced commuter, event, and travel volumes. April was the seeming nadir and results continue to improve sequentially. Impressively, the company reported positive free cash flow despite the drop in earnings. Technology initiatives, such as contactless payments and remote monitoring, have boosted its already strong market position.”
9. Twitter, Inc. (NYSE:TWTR)
Intrepid Capital Management’s Stake Value: $4,734,000
Percentage of Intrepid Capital Management’s 13F Portfolio: 2.50%
Number of Hedge Fund Holders: 89
Twitter, Inc. (NYSE:TWTR) is one of the top stock picks of Intrepid Capital Management, as of the end of June this year, with the investment firm holding a $4.73 million stake in Twitter, Inc. (NYSE:TWTR). This social networking platform accounts for 2.50% of Travis’s Q2 portfolio. As of 2021, there are 206 million active monetizable Twitter, Inc. (NYSE:TWTR) users, with 73 million daily users belonging to the United States.
On October 26, the Q3 EPS for Twitter, Inc. (NYSE:TWTR) came in at -$0.54, missing estimates by -$0.72. The actual revenue for the quarter exceeded analysts’ estimates by $1.02 million, at $1.28 billion.
BMO Capital analyst Daniel Salmon on October 28 kept a Market Perform rating on Twitter, Inc. (NYSE:TWTR), while lowering the price target from $70 to $65. Twitter, Inc. (NYSE:TWTR)’s app performed well, and the advertising performance wasn’t volatile. However, the expenses were higher than expected, which cut into the company’s profit margins.
At the end of the second quarter of 2021, 89 hedge funds in the exclusive database maintained by Insider Monkey reported owning stakes in Twitter, Inc. (NYSE:TWTR), down from 107 in the previous quarter.
Here is what ClearBridge Investments has to say about Twitter, Inc. (NYSE:TWTR) in its Q2 2021 investor letter:
“Not every portfolio company will neatly fit into one of these four growth segments and some may move from one to another over time. Social media platform Twitter could be considered an improving growth story due to the initiatives put in place to grow and better monetize its user base. With the global return of live events and sports causing a rebound in advertising, combined with other new services beginning to thrive, this is a company with the fundamentals to be categorized as a disruptor.”
8. Turning Point Brands, Inc. (NYSE:TPB)
Intrepid Capital Management’s Stake Value: $4,950,000
Percentage of Intrepid Capital Management’s 13F Portfolio: 2.61%
Number of Hedge Fund Holders: 30
Turning Point Brands, Inc. (NYSE:TPB) manufactures and distributes alternative smoking accessories and consumables containing active ingredients. Intrepid Capital Management owns 108,139 shares in Turning Point Brands, Inc. (NYSE:TPB), worth $4.95 million, representing 2.61% of the firm’s portfolio for the second quarter. Some of the well known products by Turning Point Brands, Inc. (NYSE:TPB) include Zig-Zag, Stoker’s, Beech-Nut, and Trophy, among others. All of them are nicotine-based products.
At the end of the second quarter of 2021, 30 hedge funds monitored by Insider Monkey were long Turning Point Brands, Inc. (NYSE:TPB), up from 26 in the previous quarter.
The third quarter earnings were disclosed by Turning Point Brands, Inc. (NYSE:TPB) on October 26. The Q3 EPS came in at $0.65, beating estimates by $0.04.
Eric Des Lauriers from Craig-Hallum, on October 27, kept a Buy rating on Turning Point Brands, Inc. (NYSE:TPB), while lowering the price target from $75 to $65. Even though Q3 performance exceeded expectations, the analyst lowered Q4 estimates for Turning Point Brands, Inc. (NYSE:TPB) because of the restrictions in the vape distribution business.
Here is what Maran Capital Management has to say about Turning Point Brands, Inc. (NYSE:TPB) in its Q3 2021 investor letter:
“At Turning Point Brands, the tail is wagging the dog. TPB has three segments, Zig Zag rolling papers, Stokers smokeless tobacco, and “New Gen,” a collection of investments in vaping and other alternative products. Zig Zag and Stokers are both performing very well, together run-rating approximately $100mm of annual EBITDA. Zig Zag is benefitting from the ongoing trend of cannabis legalization, and Stokers is a low-cost, high-quality competitor in its niche, taking share and operating under a pricing umbrella. New Gen, though, is struggling and operating at close to break-even levels. It is this third segment that investors seem to be focused on. The stock is cheap even assuming New Gen is worth nothing, and I believe risk-reward is asymmetrically skewed to the upside.”
7. Burlington Stores, Inc. (NYSE:BURL)
Intrepid Capital Management’s Stake Value: $4,981,000
Percentage of Intrepid Capital Management’s 13F Portfolio: 2.63%
Number of Hedge Fund Holders: 43
Burlington Stores, Inc. (NYSE:BURL) is an American chain of discount department stores, operating across the United States and Puerto Rico. Burlington Stores, Inc. (NYSE:BURL) is the third largest discount retailer in the US, after The TJX Companies, Inc. (NYSE:TJX)’s TJ Maxx, and Ross Stores, Inc. (NASDAQ:ROST). Intrepid Capital Management, as of June this year, owns 15,468 shares in Burlington Stores, Inc. (NYSE:BURL), worth $4.98 million, representing 2.63% of the firm’s 13F portfolio.
Laura Champine from the investment advisory Loop Capital, on October 14, downgraded Burlington Stores, Inc. (NYSE:BURL) from Buy to Hold, with a $285 price target, down from $410.
As of the second quarter of 2021, 43 hedge funds tracked by Insider Monkey were bullish on Burlington Stores, Inc. (NYSE:BURL), up from 32 in the preceding quarter.
In addition to Twitter, Inc. (NYSE:TWTR), Dropbox, Inc. (NASDAQ:DBX), Alphabet Inc. (NASDAQ:GOOG), and Meta Platforms, Inc. (NASDAQ:FB), Burlington Stores, Inc. (NYSE:BURL) is a notable stock in Travis’s Q2 portfolio.
Here is what Ariel Investments has to say about Burlington Stores, Inc. (NYSE:BURL) its Q1 2021 investor letter:
“Burlington is a leading off-price retailer offering an assortment of apparel, footwear, home, beauty and toys. Shares have risen as investors are increasingly optimistic the company will benefit from higher consumer spending this year with the US economy expected to reopen. In addition to this cyclical tailwind, we believe the company has several internal drivers and a relatively new CEO is spearheading. These include growing its store footprint through smaller formats (~30,000 square feet versus ~50,000 square feet) as it adapts to the evolving brick-and-mortar retail landscape, and closing its sizable margin gap with peers TJ Maxx and Ross by strengthening its merchant team, purchasing inventory items in-season (reacting to sales trends in real time) and reducing store inventory levels (fewer markdowns, higher merchandise margins).”
6. Jefferies Financial Group Inc. (NYSE:JEF)
Intrepid Capital Management’s Stake Value: $5,095,000
Percentage of Intrepid Capital Management’s 13F Portfolio: 2.69%
Number of Hedge Fund Holders: 29
A multinational investment bank and financial services company, Jefferies Financial Group Inc. (NYSE:JEF) is a top stock pick of Mark Travis’s Intrepid Capital Management, as of June this year. Intrepid Capital Management owns 148,980 shares in Jefferies Financial Group Inc. (NYSE:JEF), worth over $5 million, representing 2.69% of the firm’s Q2 portfolio. Jefferies Financial Group Inc. (NYSE:JEF) is sought after by clients for financial advice, institutional brokerage, capital restructuring, mergers and acquisitions consultancy, and asset management.
Jefferies Financial Group Inc. (NYSE:JEF) announced on September 30 a quarterly dividend of $0.25 per common share, payable on November 29 to shareholders on record as of November 15.
Earnings for Q3 were disclosed on September 30 by Jefferies Financial Group Inc. (NYSE:JEF). The EPS for the quarter came in at $1.50, beating analysts’ estimates by $0.50. The Q3 revenue also exceeded estimates by $196.25 million at $1.94 billion.
At the end of June, 29 hedge funds monitored by Insider Monkey were bullish on Jefferies Financial Group Inc. (NYSE:JEF), down from 38 in the preceding quarter.
Here is what GoodHaven Funds has to say about Jefferies Financial Group Inc. (NYSE:JEF) in its Q2 2021 investor letter:
“Jefferies Financial was our next biggest dollar gainer in the period, yet also remains undervalued in our opinion. We are running out of accolades to describe the string of great results at Jefferies. In their just reported six-month period, the core business earned over 35% return on tangible equity (ROTE) and more than doubled pre-tax income versus the prior year’s six months. Book value and tangible book value/share are now $40.77 and $30.29 respectively. Students of capital allocation should study Rich Handler. Over the last three years, Jefferies has repurchased 123 million shares for $2.6 billion at an average price of $21.04/share. Astute repurchases materially benefit remaining owners. While it’s reasonable to expect some normalization of Jefferies recent great results, Jefferies has gained market share in its core business and has a culture adept at finding new niches to earn good returns, while helping clients, and when existing niches become less profitable. Even if a more normalized ROTE is in store, we think that level will be materially higher than it has been in the recent past.”
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Disclosure: None. Mark Travis’s Intrepid Capital Management’s Top 10 Stock Picks is originally published by Insider Monkey.
