Investment management company First Pacific Advisors recently released its “FPA Queens Road Small Cap Value Fund” fourth quarter 2023 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund returned 13.09% compared to a 15.26% return for the Russell 2000 Value Index. The Fund returned 16.00% in 2023 vs. 14.65% for the index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
FPA Queens Road Small Cap Value Fund featured stocks like Darling Ingredients Inc. (NYSE:DAR) in the fourth quarter 2023 investor letter. Headquartered in Irving, Texas, Darling Ingredients Inc. (NYSE:DAR) produces natural ingredients from edible and inedible bio-nutrients. On February 29, 2024, Darling Ingredients Inc. (NYSE:DAR) stock closed at $42.31 per share. One-month return of Darling Ingredients Inc. (NYSE:DAR) was -2.20%, and its shares lost 33.81% of their value over the last 52 weeks. Darling Ingredients Inc. (NYSE:DAR) has a market capitalization of $6.75 billion.
FPA Queens Road Small Cap Value Fund stated the following regarding Darling Ingredients Inc. (NYSE:DAR) in its fourth quarter 2023 investor letter:
“Darling Ingredients Inc. (NYSE:DAR) is the world’s largest rendering operation with 17% of the global market and a higher share in the core U.S. market. 28 The business is one part industrial where scale and route density are big advantages – they collect unused animal waste from slaughterhouses and butchers – and one part commodity – their plants process this waste into fats, bone meal and ingredients that trade at prices set by the global commodity markets. Finally, DAR’s Diamond Green Diesel joint venture with Valero turns animal fats into green energy – a business that benefits from renewables subsidies and tax credits. The company took on debt to make three large acquisitions in 2022, adding additional complexity as Darling integrates the acquisitions and de-levers. The stock has sold off because of weakness in Darling’s commodity end markets, falling renewable information number (RIN) prices and lower earnings and guidance reported for the second and third quarters. 29 We first purchased Darling shares in 2008 and have watched as CEO Randy Stuewe has grown Darling from a minnow to a global behemoth. As of December 31.2023, Darling trades at approximately 10x forward earnings and, despite the company’s commodity exposure and organizational complexity, we are comfortable holding a mid-sized position.”
A selection of pet food ingredients being prepared in a kitchen for quality and safety testing.
Darling Ingredients Inc. (NYSE:DAR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Darling Ingredients Inc. (NYSE:DAR) was held by 34 hedge fund portfolios, down from 35 in the previous quarter, according to our database.
We discussed Darling Ingredients Inc. (NYSE:DAR) in another article and shared Aristotle Atlantic Focus Growth Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q4 2023 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.
