Palm Valley Capital Management, an investment management firm, released the “Palm Valley Capital Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, Palm Valley Capital Fund declined -0.09% outperforming the -0.58% decline in the S&P SmallCap 600 and slightly underperforming the 0.32% gain in the Morningstar Small Cap Total Return Index. The Fund faced losses on certain equity positions, but these were partly balanced out by gains from Treasury bill holdings. During the quarter the equity positions in the Fund reduced by 3.6%. Cash equivalents comprised 78% of the fund’s assets at the period’s end. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Palm Valley Capital Fund highlighted stocks like TrueBlue, Inc. (NYSE:TBI), in the fourth quarter 2024 investor letter. TrueBlue, Inc. (NYSE:TBI) is a specialized workforce solutions provider. The one-month return of TrueBlue, Inc. (NYSE:TBI) was -7.53%, and its shares lost 43.08% of their value over the last 52 weeks. On January 6, 2025, TrueBlue, Inc. (NYSE:TBI) stock closed at $7.98 per share with a market capitalization of $235.88 million.
Palm Valley Capital Fund stated the following regarding TrueBlue, Inc. (NYSE:TBI) in its Q4 2024 investor letter:
“For the year, the Fund’s top decliners were TrueBlue, Inc. (NYSE:TBI), SSR Mining (ticker: SSRM), and Carters. While TrueBlue’s shares bounced modestly in Q4, the stock fell for most of 2024. We’ve averaged down. The company specializes in blue collar day labor, which is very easy for clients to turn off compared to typical temporary assignments that usually last for months. However, TrueBlue’s jobs are also easier to turn back on when demand improves. Management contends that the firm is actually gaining customers, even as volumes per client are down materially. We attribute revenue declines primarily to cyclical factors accentuated by the pandemic, with commercial, light-industrial staffing demand down over 30%. It is also possible that the surge in illegal immigration has offered certain, smaller employers alternatives for cheaper labor. As long as the company, currently debt-free, can navigate the downturn near breakeven cash flows, then we think the opportunity in the stock is considerable. The shares are priced at a discount to tangible book value and sell for 4x our estimate of normalized operating profit.”
A busy industrial worker in their uniform operating machinery in a factory setting.
TrueBlue, Inc. (NYSE:TBI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held TrueBlue, Inc. (NYSE:TBI) at the end of the third quarter which was 19 in the previous quarter. TrueBlue, Inc. (NYSE:TBI) reported a revenue of $382 million for the quarter, reflecting a 19% decline compared to the previous year. This decrease was driven by ongoing uncertainty and client caution in the staffing industry. While we acknowledge the potential of TrueBlue, Inc. (NYSE:TBI) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed TrueBlue, Inc. (NYSE:TBI) and shared Palm Valley Capital Fund’s views on the company. In addition, please check out our hedge fund investor letters Q4 2024 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.