Fiduciary Management Inc. (FMI), an independent money management firm, released its fourth quarter 2023 investor letter. A copy of the same can be downloaded here. Global stock markets had a strong year in 2023, with robust consumer demand, tight labor markets, and declining inflation all contributing to the positive outlook. The Small Cap Strategy rose 12.4% (gross) / 12.2% (net) in the quarter compared to 14.03% and 15.26% for the Russell 2000 Index and Russell 2000 Value Index. FMI Large Cap Strategy gained 13.1% (gross) / 13.0% (net) compared with 11.69% and 9.50% for the S&P 500 and iShares Russell 1000 Value ETF, respectively. The FMI All Cap Equity advanced 11.4% (gross) / 11.2% (net), compared with 12.14% for the iShares Russell 3000 ETF. Finally, the FMI International Strategies gained 6.4% (gross) / 6.2% (net) on a currency-hedged basis and 9.6% (gross) / 9.4% (net) on a currency-unhedged basis. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Fiduciary Management featured stocks such as BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) in the fourth quarter 2023 investor letter. Headquartered in Westborough, Massachusetts, BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) operates warehouse clubs. On January 10, 2024, BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) stock closed at $65.77 per share. One-month return of BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) was -0.77%, and its shares lost 5.16% of their value over the last 52 weeks. BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) has a market capitalization of $8.772 billion.
Fiduciary Management stated the following regarding BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) in its fourth quarter 2023 investor letter:
“BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ)’s is the third largest warehouse club operator in the U.S., with locations primarily along the East Coast. The warehouse club business model has many attractive characteristics, offering a limited number of items in each product category (sold in large pack sizes) which allows them to drive down purchasing costs. These companies have low operating costs, efficient distribution networks, and are typically located in low-cost areas. Their no-frills stores, simple operations, and large real estate footprints create labor efficiencies. This allows for merchandise to be offered at very sharp prices. Customers gain access to these low prices by purchasing annual memberships to the clubs, which have high retention rates and generate steady, recurring revenue. The business earns high returns on capital despite low prices and operating margins. BJ’s has a checkered history but has made significant improvements to the business over the past decade. The market remains skeptical as to how sustainable these improvements are and how well they can compete against strong peers in the warehouse club industry. We believe this misses the mark, as the club industry commands a small share of a vast retail market. We believe all of the warehouse club operators can grow and take share from indirect competitors that can’t match their pricing. If this proves out, we believe BJ’s valuation multiple should re-rate higher to better reflect the underlying strength of its business model.”
A warehouse in the supply chain network, showing how goods are shipped from manufacturer to customers.
BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) at the end of third quarter which was 27 in the previous quarter.
We discussed BJ’s Wholesale Club Holdings, Inc. (NYSE:BJ) in another article and shared TimesSquare Capital Management’s views on the company in the previous quarter. 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.
