Merion Road Capital, an investment advisor, released its fourth-quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, Merion Road Small Cap Fund returned -3.5% compared to a 6.2% return for the Russell 2000 Index and 3.2% for the Barclay Hedge Fund Index. Along with this, MRCM Long Only Large Cap returned -6.4% compared to a -4.9% return for the S&P 500 Index. For the full year 2022, Merion Road Small Cap Fund declined 17%, and MRCM Long Only Large Cap was down by 35%. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
Merion Road Capital highlighted stocks like Mastech Digital, Inc. (NYSE:MHH) in the Q4 2022 investor letter. Headquartered in Pittsburgh, Pennsylvania, Mastech Digital, Inc. (NYSE:MHH) is a digital transformation IT services provider. On January 16, 2023, Mastech Digital, Inc. (NYSE:MHH) stock closed at $14.00 per share. One-month return of Mastech Digital, Inc. (NYSE:MHH) was 5.60%, and its shares lost 17.65% of their value over the last 52 weeks. Mastech Digital, Inc. (NYSE:MHH) has a market capitalization of $162.648 million.
Merion Road Capital made the following comment about Mastech Digital, Inc. (NYSE:MHH) in its Q4 2022 investor letter:
“Mastech Digital, Inc. (NYSE:MHH). The big news out of MHH came in Q3 when they announced disappointing results in the Data & Analytics (“D&A”) segment and the abrupt termination of the divisions’ relatively new CEO. You may recall that MHH was originally a staffing company that built the D&A segment through two acquisitions: Infotrellis and Amberleaf. Under their ownership MHH has focused on expanding the D&A service capabilities beyond master data management and into high growth areas like data modernization and analytics. These growth investments have yet to bear fruit as segment EBITDA margins have deteriorated from >20% to ~10%. MHH was quick to hire a new division head, Michael Fleishman. Michael has a strong background in IT leadership and sales and I found him convincing when I had a chance to speak with him. While the potential for a new acquisition is likely pushed out a few quarters, MHH should be able to organically reaccelerate revenue growth and improve margins. MHH ended the year at $11, has a small net cash position, and is currently generating ~$1.15 in free cash flow.”
Mastech Digital, Inc. (NYSE:MHH) is not on our 30 Most Popular Stocks Among Hedge Funds list. As per our database, 3 hedge fund portfolios held Mastech Digital, Inc. (NYSE:MHH) at the end of the third quarter, which was 3 in the previous quarter. In addition, please check out our hedge fund investor letters Q4 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.
