CRH plc (CRH) Share Price Increased by 25% in Q1
L1 Capital, an investment management firm, released its “L1 Capital International Fund” first quarter 2023 investor letter, a copy of the same can be downloaded here. In the first quarter, the L1 Capital International Fund returned 13.7% (net of fees) compared to its benchmark’s (MSCI World Net Total Return Index in AUD) 9.1% return for the same period. The Australian dollar depreciated 1.2% against the U.S. dollar and depreciated 3.2% against the Euro in the quarter increasing the Fund and Benchmark Australian dollar reported returns. The Fund’s strong performance in the quarter was broad-based. Please check the top five holdings of the fund to know its best picks in 2023.
L1 Capital International Fund highlighted stocks like CRH plc (NYSE:CRH) in the first quarter 2023 investor letter. Headquartered in Dublin, Ireland, CRH plc (NYSE:CRH) is a building materials provider. On June 27, 2023, CRH plc (NYSE:CRH) stock closed at $54.57 per share. One-month return of CRH plc (NYSE:CRH) was 14.79%, and its shares gained 58.04% of their value over the last 52 weeks. CRH plc (NYSE:CRH) has a market capitalization of $39.825 billion.
L1 Capital International Fund made the following comment about CRH plc (NYSE:CRH) in its first quarter 2023 investor letter:
"CRH plc (NYSE:CRH), an Irish domiciled but North American-centric building products and solutions provider performed strongly in the quarter, with the share price increasing over 25% (in Euro). The market had under-estimated CRH’s pricing power and the benefit of providing integrated solutions to its customers, not just vanilla commodity building products. Investors were also pleased that CRH is considering moving its primary listing to the U.S., although we consider this action to be of limited materiality. We took advantage of an over-enthusiastic response to this announcement to trim our investment.
We were particularly pleased by management announcing an increase in CRH’s buyback to US$3.0b over the next 12 months, compared to US$1.2b in 2022. We have been engaged with management stressing that it would be beneficial to take advantage of the company’s strong financial position and undervalued share price to increase buyback activity. While we are not taking credit for the increased buyback, it is pleasing that the Board and management has once again demonstrated strong alignment with shareholders. Even after the strong price increase, CRH is currently trading on ~12x 2023F P/E, 7.5% free cashflow yield, a dividend yield of 3% and at the current share price will buy back over 8% of its outstanding shares over the next 12 months, all while maintaining very conservative financial leverage.
We modestly trimmed investment in CRH and Eagle Materials. These businesses continue to perform in line or ahead of our base case expectations, but following significant share price increases the risk adjusted returns in our base case scenarios were less favourable."
CRH plc (NYSE:CRH) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 13 hedge fund portfolios held CRH plc (NYSE:CRH) at the end of first quarter 2023 which was 7 in the previous quarter.
We discussed CRH plc (NYSE:CRH) in another article and shared the list of most undervalued growth stocks to buy according to analysts. 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.
