Black Bear Value Partners, an investment management firm, published its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. Black Bear Value Fund returned -9.4% in December and -1.4% in 2024 and the S&P 500 returned -2.4% in December and +25.0% in 2024. HFRI Value Index returned -1.2% in December and +11.5% in 2024. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Black Bear Value Partners highlighted stocks like Asbury Automotive Group, Inc. (NYSE:ABG) in its Q4 2024 investor letter. Headquartered in Duluth, Georgia, Asbury Automotive Group, Inc. (NYSE:ABG) is a US-based automotive retailer. The one-month return of Asbury Automotive Group, Inc. (NYSE:ABG) was -4.11%, and its shares gained 19.41% of their value over the last 52 weeks. On January 13, 2025, Asbury Automotive Group, Inc. (NYSE:ABG) stock closed at $241.92 per share with a market capitalization of $4.739 billion.
Black Bear Value Partners stated the following regarding Asbury Automotive Group, Inc. (NYSE:ABG) in its Q4 2024 investor letter:
“Asbury Automotive Group, Inc. (NYSE:ABG) operates auto dealerships across the United States. The strength of the model comes from the back of the house in parts and services where more than 50% of the profits come from.
When an auto dealer sells a car to a consumer, they capture both the trade-in (inventory to sell) and the relationship between parts and services. It is a razor-razorblade model in a highly fragmented industry (many dealerships are owned privately by families). The large dealer groups have transitioned to an omni-channel model where much of the selling/pre-buy activity can be done online, reducing the need for headcount and making the transaction smoother for their customers. The lower operating costs of the business are not appreciated by the market. They are appreciated by us and the management teams as most dealers, including ABG, have been buying in lots of stock with their free-cash flow.
ABG should be able to earn $25-$35 in free-cash flow per share in a “normal” year. At year-end pricing that implies a 10-14% annual yield. I hope management continues to buy back a lot of stock at these levels!”
A customer smiling delightedly after driving away in their new car from the automotive retail shop.
Asbury Automotive Group, Inc. (NYSE:ABG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held Asbury Automotive Group, Inc. (NYSE:ABG) at the end of the third quarter which was 30 in the previous quarter. In the third quarter of 2024, Asbury Automotive Group, Inc. (NYSE:ABG) generated $4.2 billion in revenue, up 16% year-over-year. While we acknowledge the potential of Asbury Automotive Group, Inc. (NYSE:ABG) 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 Asbury Automotive Group, Inc. (NYSE:ABG) and shared the list of best car repair stocks to invest in. 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.