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 IAC Inc. (NASDAQ:IAC) in the third quarter 2023 investor letter. Headquartered in New York, New York, IAC Inc. (NASDAQ:IAC) is a media and internet company. On October 9, 2023, IAC Inc. (NASDAQ:IAC) stock closed at $48.45 per share. One-month return of IAC Inc. (NASDAQ:IAC) was -7.19%, and its shares lost 1.87% of their value over the last 52 weeks. IAC Inc. (NASDAQ:IAC) has a market capitalization of $4.245 billion.
Cove Street Small Cap Value Fund made the following comment about IAC Inc. (NASDAQ:IAC) in its Q3 2023 investor letter:
“Also under “off spreadsheet,” we did not model for a giant cyber-hack of MGM Resorts (Ticker: MGM), of which our holding IAC Inc. (NASDAQ:IAC) owns 18% – their largest value driver. The cybersecurity breach froze MGM’s reservation system late in September 2023, generally making a mangle of things. Both stocks dropped accordingly. Angi (Ticker: ANGI), of which IAC owns 85%, reported a year-over-year revenue decline as Joey Levin (now full-time CEO of both IAC and Angi) focuses the company on more profitable business and retention…much to our delight. Dotdash Meredith remains mired in an ad recession as it continues its work onboarding the Meredith print properties to its digital monetization machine.
We view these challenges as annoying but temporary and the current market reaction as overly punitive. IAC currently trades $125m above the combined value of its cash, MGM, and Angi positions. At the current price, you “get” 31% of car-sharing marketplace Turo, the equity of publishing giant Dotdash Meredith, Care.com, Vivian Health, and other IAC companies for…$125m. Yes, we have taken this opportunity to add to our position.”
Photo by S O C I A L . C U T on Unsplash
IAC Inc. (NASDAQ:IAC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held IAC Inc. (NASDAQ:IAC) at the end of second quarter which was 49 in the previous quarter.
We discussed IAC Inc. (NASDAQ:IAC) in another article and shared Patient Capital Opportunity Equity Strategy’s views on the company. 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.
