Investment management company Cove Street Capital recently released its “Small Cap Value Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. During the calendar third quarter of 2023, financial markets were chaotic, causing CSC shareholders to lose some gains from the first half, both relatively and absolutely. In the third quarter, the fund delivered -7.48% compared to a -5.13% return for the Russell 2000 Index and a -2.96% return for the Russell 2000 Value Index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Cove Street Small Cap Value Fund highlighted stocks like The E.W. Scripps Company (NASDAQ:SSP) in the third quarter 2023 investor letter. Headquartered in Cincinnati, Ohio, The E.W. Scripps Company (NASDAQ:SSP) engages in television and newspaper publishing. On October 9, 2023, The E.W. Scripps Company (NASDAQ:SSP) stock closed at $5.04 per share. One-month return of The E.W. Scripps Company (NASDAQ:SSP) was -24.10%, and its shares lost 58.92% of their value over the last 52 weeks. The E.W. Scripps Company (NASDAQ:SSP) has a market capitalization of $425.772 million.
Cove Street Small Cap Value Fund made the following comment about The E.W. Scripps Company (NASDAQ:SSP) in its Q3 2023 investor letter:
“The E.W. Scripps Company (NASDAQ:SSP) was a detractor in the quarter on concerns about the general economy and ad market, as well as the world of “strikes” which can affect the desire of auto companies to advertise and the ability to produce “scripted” television and movies. We think all these issues define “cyclical and temporary”, and we aggressively added to our position to make this a Top 5 position. Scripps has done a very nice job of positioning itself to capitalize on the evolution of the media industry. We think “legacy” TV has much longer life to it than “fancy talk” suggests, and despite obvious exposure to the cyclicality of the advertising business at large, Scripps is a cash gusher that is rapidly paying down debt from a series of acquisitions that were enabled under the prior administration. Pick your favorite math, but ours suggests that free cashflow to pay down debt is creating 30% annualized increases in equity value at current levels. We have had different exposures to SSP over the last decade – ranging from zero to our current Top 5 position.
Photo by Bank Phrom on Unsplash
The E.W. Scripps Company (NASDAQ:SSP) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 10 hedge fund portfolios held The E.W. Scripps Company (NASDAQ:SSP) at the end of the second quarter, which was 13 in the previous quarter.
We discussed The E.W. Scripps Company (NASDAQ:SSP) in another article and shared Cove Street Capital’s views on the company in the previous quarter. 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.
