Madison Investments, an investment advisor, released its “Madison Small Cap Fund” second-quarter 2023 investor letter. A copy of the same can be downloaded here. In the second quarter, the fund (Class Y) returned 5.1% compared to a 5.2% each rise for the Russell 2000 and the Russell 2500 Index. The best-performing sectors of the portfolio were Industrials, Materials, and Financials while Consumer Staples, Information Technology, and Healthcare were the worst-performing sectors. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Madison Small Cap Fund highlighted stocks like Core & Main, Inc. (NYSE:CNM) in the second quarter 2023 investor letter. Headquartered in St. Louis, Missouri, Core & Main, Inc. (NYSE:CNM) distributes water, wastewater, storm drainage, and fire protection products. On July 18, 2023, Core & Main, Inc. (NYSE:CNM) stock closed at $31.58 per share. One-month return of Core & Main, Inc. (NYSE:CNM) was 9.50%, and its shares gained 41.93% of their value over the last 52 weeks. Core & Main, Inc. (NYSE:CNM) has a market capitalization of $7.2 billion.
Madison Small Cap Fund made the following comment about Core & Main, Inc. (NYSE:CNM) in its second quarter 2023 investor letter:
“Our largest new investment position was Core & Main, Inc. (NYSE:CNM). Core & Main is a distributor of water, wastewater, storm drainage, and fire protection products. It provides its services to municipalities, private water companies, and professional contractors across municipal, non-residential, and residential end markets nationwide. The firm’s specialty products and services are used to maintain, repair, replace, and construct water and fire protection infrastructure. CNM operates in a duopoly market structure with industrial giant Ferguson. Together the two companies have roughly equal share (17%) in an estimated $40 billion market, leaving significant room for organic market share gains and accretive acquisitions.
The U.S. municipal water infrastructure underwent a material period of underinvestment (2010-2018) for various reasons. Although that market has recovered from the trough, the Bipartisan Infrastructure Law of 2021 (BIL) provides $50 billion for water infrastructure investment. This funding will be used to improve the country’s drinking water, wastewater, and stormwater infrastructure. BIL is the single largest investment in water infrastructure in United States history. Our PMV estimate for CNM is $35.”
Core & Main, Inc. (NYSE:CNM) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 15 hedge fund portfolios held Core & Main, Inc. (NYSE:CNM) at the end of first quarter which was 17 in the previous quarter.
We discussed Core & Main, Inc. (NYSE:CNM) in another article and shared the list of most profitable new stocks on February 23. In addition, please check out our hedge fund investor letters Q2 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.
