Palm Valley Capital Management, an investment management firm, published its third-quarter 2022 investor letter – a copy of which can be downloaded here. A quarterly portfolio return of -1.83% was recorded by the fund for the third quarter of 2022, while its benchmarks, the S&P SmallCap 600 Index, by comparison, returned -5.20%, and -3.75% return for the Morningstar Small Cap Index over the same period. Try to spare some time to check the fund’s top 5 holdings for you to have an idea about their best stock picks this 2022.
In its Q3 2022 investor letter, Palm Valley Capital Management mentioned ManpowerGroup Inc. (NYSE:MAN) and explained its insights for the company. Founded in 1948, ManpowerGroup Inc. (NYSE:MAN) is a9 Milwaukee, Wisconsin-based employment agency company with a $3.4 billion market capitalization. ManpowerGroup Inc. (NYSE:MAN) delivered a -30.75% return since the beginning of the year, while its 12-month returns are down by -39.53%. The stock closed at $67.40 per share on October 11, 2022.
Here is what Palm Valley Capital Management has to say about ManpowerGroup Inc. (NYSE:MAN) in its Q3 2022 investor letter:
“We acquired four new positions during the quarter—two of these were recycled. The Fund bought back Kelly Services (NASDAQ:KELYA), a prior holding, and established a new weighting in ManpowerGroup (NYSE:MAN). Both companies serve the staffing industry. Staffing is cyclical, and we expect results for these companies to deteriorate in a recession, even though margins haven’t fully recovered yet from the lockdowns. In our judgment, during previous downturns, their operating performance was acceptable for a cyclical trough. We believe the valuations for Kelly and Manpower are becoming increasingly compelling. Kelly trades at a 46% discount to tangible book value. The company’s net assets are primarily supported by a mountain of receivables. Neither Kelly nor Manpower experienced significant credit losses during the last recession. ManpowerGroup’s $4 billion Enterprise Value is 6.7x its five-year average operating income before amortization, which includes a trough in 2020. Manpower is based in the U.S., but it earns the majority of revenues from Europe. We think the firm’s European exposure has placed it in the doghouse among investors, given the unique risks facing those economies. Manpower’s translated results are also weighed down by the rocketing U.S. dollar…” (Click here to see the full text)
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Our calculations show that ManpowerGroup Inc. (NYSE:MAN) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. ManpowerGroup Inc. (NYSE:MAN) was in 24 hedge fund portfolios at the end of the second quarter of 2022, compared to 25 funds in the previous quarter. ManpowerGroup Inc. (NYSE:MAN) delivered a -13.33% return in the past 3 months.
In August 2022, we published an article that includes ManpowerGroup Inc. (NYSE:MAN) in 5 Best High-Yield Dividend Stocks for Retirees in 2022. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q3 page.
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Disclosure: None. This article is originally published at Insider Monkey.
