Investment management company Cove Street Capital recently released its “Small Cap Value Fund” first quarter 2023 investor letter. A copy of the same can be downloaded here. In the first quarter, the fund returned 2.83% compared to 2.74% for the Russell 2000 Index and -0.66% 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 Capital Small Cap Value Fund highlighted stocks like Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) in the first quarter 2023 investor letter. Headquartered in Houston, Texas, Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) is a dredging services provider. On April 10, 2023, Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) stock closed at $5.42 per share. One-month return of Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) was 2.46%, and its shares lost 61.91% of their value over the last 52 weeks. Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) has a market capitalization of $359.528 million.
Cove Street Capital Small Cap Value Fund made the following comment about Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) in its Q1 2023 investor letter:
“We initiated a position in Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), the leader in domestic dredging. Dredging is used in a number of maritime projects including port expansions, coastal restorations, trench digging for pipelines and windfarms. GLDD operates in a stable oligopoly in which they take 35-40% market share in domestic dredging projects that are “put out to bid” and for which they have capacity. The bid market in the first half of 2022, facilitated by the U.S. government, evaporated due to some combination of an extra-long Continuing Resolution, overly complicated budget authorization and allocation processes, and frankly, work-from-home inefficiencies. When your dredgers aren’t at work because you didn’t get your bid, you send them to the shipyard for maintenance, causing a “double-whammy” of less revenue and higher costs. GLDD’s margins in 2022 got crushed, as did the stock price. Ultimately, these are projects that have to get done both for national security and economic purposes – ports have to be a certain depth for shippers and other vessels to enter. These big projects did not go away but were delayed. Great Lakes ultimately operates downstream from a record $2.3 billion Fund budgeted by the U.S. government for these projects in 2023 – we anticipate the bid market will return. This is a classic “Graham” value attached to real, albeit cyclical business.”
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Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) at the end of the fourth quarter which was 12 in the previous quarter.
We discussed Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) in another article and shared the top stock picks of Minerva Advisors. In addition, please check out our hedge fund investor letters Q1 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.
