Heartland Advisors, an investment management company, released its “Heartland Value Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. During the quarter the fund outperformed the Russell 2000 Value Index returning -1.02% versus -2.96% for the benchmark. The Fund generated gains in Energy, Utilities, and Financials owing largely to stock selection despite a difficult market. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Heartland Value Fund highlighted stocks like Stewart Information Services Corporation (NYSE:STC) in the third quarter 2023 investor letter. Headquartered in Houston, Texas, Stewart Information Services Corporation (NYSE:STC) provides title insurance and real estate transaction-related services. On October 12, 2023, Stewart Information Services Corporation (NYSE:STC) stock closed at $41.79 per share. One-month return of Stewart Information Services Corporation (NYSE:STC) was -7.56%, and its shares lost 2.70% of their value over the last 52 weeks. Stewart Information Services Corporation (NYSE:STC) has a market capitalization of $1.143 billion.
Heartland Value Fund made the following comment about Stewart Information Services Corporation (NYSE:STC) in its Q3 2023 investor letter:
“Financials. With a 10% market share, Stewart Information Services Corporation (NYSE:STC) is the smallest of the four companies enjoying an oligopoly in the title insurance industry.
While most people don’t think about title insurance when purchasing a home, policies indemnify homeowners and lenders against title defects that could result in significant loss arising from back taxes, liens, and other claims. Ever since a proposed sale to larger peer First American Financial was blocked by the Federal Trade Commission in 2019, STC has been in need of a new direction. Since being named CEO that same year, Fred Eppinger has set out to improve the company’s margin structure and take market share.
These operational improvements, however, have been hidden by lower top-line volume as rising mortgage rates have curtailed home transactions. As a result, STC shares fell to nearly 90% of book value, well below its 10-year average of 1.3X.
As housing sales normalize over time and revenues recover, we view STC’s earnings to have significant upside and the stock should trade closer to its historic average. Moreover, the realization of its improved margin structure could result in a multiple that’s closer to peers First American Financial and Fidelity National Financial, which have historically traded at a premium to STC.”
A business executive in a sharp suit shaking hands on a real estate deal. Editorial photo for a financial news article. 8k. –ar 16:9
Stewart Information Services Corporation (NYSE:STC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 12 hedge fund portfolios held Stewart Information Services Corporation (NYSE:STC) at the end of second quarter which was 15 in the previous quarter.
We discussed Stewart Information Services Corporation (NYSE:STC) in another article and shared long-term returns of Jeff Smith’s activist targets. In addition, please check out our hedge fund investor letters Q3 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.
