Bonhoeffer Capital Management, an asset management company, released its third-quarter investor letter. A copy of the same can be downloaded here. In the third quarter, the fund returned -13.7% net of fees, compared to a -10.0% return for its closest benchmark DFA International Small Cap Value Fund, and a -10.9% return for the broad-based index, the MSCI World ex-US. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Bonhoeffer Capital Management highlighted stocks like Asbury Automotive Group, Inc. (NYSE:ABG) in its Q3 2022 investor letter. Headquartered in Duluth, Georgia, Asbury Automotive Group, Inc. (NYSE:ABG) is a US-based automotive retailer. On December 12, 2022, Asbury Automotive Group, Inc. (NYSE:ABG) stock closed at $179.78 per share. One-month return of Asbury Automotive Group, Inc. (NYSE:ABG) was -0.27%, and its shares gained 7.20% of their value over the last 52 weeks. Asbury Automotive Group, Inc. (NYSE:ABG) has a market capitalization of $3.979 billion.
Bonhoeffer Capital Management made the following comment about Asbury Automotive Group, Inc. (NYSE:ABG) in its Q3 2022 investor letter:
“One of our holdings in the distribution theme is Asbury Automotive Group, Inc. (NYSE:ABG), an automobile dealership firm. Asbury’s growth model is through same-store sales growth (4% per year), internet distribution (10% per year), and synergistic M&A (5% per year). These are enhanced by opportunistic operational leverage from scale and share repurchases (5% annual growth). Over the past 10 years, Asbury’s net income margins are up 120% with a 5x increase in revenues. These factors should lead to about a 20% EPS growth going forward. Ashtead has had 19% and 31% EPS growth over the past five and 10 years, respectively.
As can be seen below, a large portion of future growth is based upon the growth of internet sales. Both Asbury and Lithia have internet strategies which capture a younger demographic who do not visit dealerships with the same frequency as older folks. Asbury, through its online platform Clicklane, has found internet purchasers have very little overlap with existing customers; 95% are new customers. Asbury’s strategy is to target customers who are within 20 miles of an existing Asbury location vs. online only competitors (like Carvana) and Lithia. Asbury has had a per-store growth rate of 67% over the last year and only sells cars online in about 60% of its current footprint. This growth rate will decline going forward as the markets mature, but it will be bolstered as Clicklane is rolled out to the remaining 40% of Asbury’s footprint…” (Click here to read the full text)
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Asbury Automotive Group, Inc. (NYSE:ABG) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held Asbury Automotive Group, Inc. (NYSE:ABG) at the end of the third quarter, which was 27 in the previous quarter.
We discussed Asbury Automotive Group, Inc. (NYSE:ABG) in another article and shared LRT Capital Management’s views on the company. In addition, please check out our hedge fund investor letters Q3 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.
