Kovitz Investment Group Partners, an investment management firm, published its “Kovitz Core Equity” first-quarter 2022 investor letter – a copy of which can be downloaded here. During the first quarter of 2022, the Kovitz Equity Composite (the “Composite”) decreased by 4.9%, net of all fees. By way of comparison, the S&P 500 was down 4.6% while the Russell 1000 Value Index fell 0.7% for the same period. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Kovitz Core Equity mentioned Hayward Holdings, Inc. (NYSE:HAYW) and explained its insights for the company. Founded in 1925, Hayward Holdings, Inc. (NYSE:HAYW) is a Berkeley Heights, New Jersey-based pump and pumping equipment manufacturing company with a $3.7 billion market capitalization. Hayward Holdings, Inc. (NYSE:HAYW) delivered a -38.31% return since the beginning of the year, while its 12-month returns are down by -15.55%. The stock closed at $16.18 per share on April 25, 2022.
Here is what Kovitz Core Equity has to say about Hayward Holdings, Inc. (NYSE:HAYW) in its Q1 2022 investor letter:
“Hayward is a relative newcomer to the public markets, having IPO’d slightly more than a year ago. However, the company has a long operating history in the oligopolistic pool supply industry as a global designer, manufacturer, and marketer of a broad portfolio of pool equipment. This niche industry has delivered exceptional economics for a wide range of businesses that participate in it and has typically grown at 1.5x-2x GDP for much of its recent history. This is driven by a steadily rising installed base of pools in the U.S., particularly as demographic trends have favored migration to warmer-weather locales, and the need to regularly maintain and replace broken equipment to keep it usable. Further supplementing demand have been vast improvements in the efficiency of equipment that significantly reduces the cost to operate a pool and a growing desire of pool owners to integrate more technology and automation into their pools to save both cost and time.
Shares have traded down roughly 40% over the past several months as fears of a reduction in home improvement spending from the COVIDinduced “stay at home” demand levels reached last year. While we are conscious of these fears, we note that the majority of Hayward’s business is comprised of maintenance equipment that is primarily non-discretionary in purchase. Moreover, as noted above, the majority of pools are located in regions that we expect to continue to see net migration as a more remote workforce and the Boomer generation continues to choose warm weather over snow.
Given industry reports of contractor backlogs going out past 2022, continued inventory constraints supporting home prices, and the solid base of non-discretionary maintenance spending on pool equipment and supplies, we believe the current valuation of Hayward’s shares should provide attractive returns in most economic scenarios.”
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Our calculations show that Hayward Holdings, Inc. (NYSE:HAYW) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Hayward Holdings, Inc. (NYSE:HAYW) was in 18 hedge fund portfolios at the end of the fourth quarter of 2021. Hayward Holdings, Inc. (NYSE:HAYW) delivered a -15.69% return in the past 3 months.
In June 2021, we also shared another hedge fund’s views on Hayward Holdings, Inc. (NYSE:HAYW) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
