Investment management company Cove Street Capital recently released its “Small Cap Value Fund” fourth quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund returned 7.82% compared to 6.23% for the Russell 2000 Index and 8.42% for the Russell 2000 Value Index. In 2022, the fund returned -10.34% compared to -20.44% decline for the Russell 2000 Index and -14.48% decline for the Russell 2000 Value Index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
Cove Street Capital highlighted stocks like UFP Technologies, Inc. (NASDAQ:UFPT) in its Q4 2022 investor letter. Headquartered in Newburyport, Massachusetts, UFP Technologies, Inc. (NASDAQ:UFPT) is a manufacturer of components, subassemblies, products, and packaging utilizing specialized foams, films, and plastics for the medical industry. On January 11, 2023, UFP Technologies, Inc. (NASDAQ:UFPT) stock closed at $114.14 per share. One-month return of UFP Technologies, Inc. (NASDAQ:UFPT) was -0.29%, and its shares gained 50.38% of their value over the last 52 weeks. UFP Technologies, Inc. (NASDAQ:UFPT) has a market capitalization of $865.021 million.
Cove Street Capital made the following comment about UFP Technologies, Inc. (NASDAQ:UFPT) in its Q4 2022 investor letter:
“We sold the last of our shares in UFP Technologies, Inc. (NASDAQ:UFPT), which from beginning to end was approximately a “5-bagger” for the Fund. Yes, we wish we had more. And yes, we should have never sold a share on the way up! CEO Jeffrey Bailey has done a stupendous job moving the company from a “packaging” company with a high degree of auto business to primarily a trusted advisor to the medical device industry. This was accomplished with both internal growth, two well-sourced and executed acquisitions, and investments in global sourcing for global customers. It was a job well done. But, the “stock” has reached a valuation that bakes in a continuation of this trajectory and that is a bit harder to have confidence in. You might have also noticed the chance for other opportunities in this messy market. We may be back in the future at lower levels – it is a good business but not a forever keeper.
We would like to point out one thing with respect to UFPT. With many small cap companies, we do a lot of more work and then don’t get a chance to get a full position as there is limited liquidity. But we work…and we wait. In the case of UFPT, we bought 7% of the company in one fell swoop from another manager who “had” to get out. Ideal for us. It sometimes pays to hang around the hoop.”
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UFP Technologies, Inc. (NASDAQ:UFPT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 8 hedge fund portfolios held UFP Technologies, Inc. (NASDAQ:UFPT) at the end of the third quarter, which was 5 in the previous quarter.
We discussed UFP Technologies, Inc. (NASDAQ:UFPT) in another article and shared Headwaters Capital Management’s views on the company. In addition, please check out our hedge fund investor letters Q4 2022 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.
