Does Quad/Graphics (QUAD) Provide Significant Long-Term Opportunity?
Miller Value Partners, an investment management company, released its “Deep Value Strategy” second-quarter 2023 investor letter. A copy of the same can be downloaded here. In the second quarter, the Deep Value Strategy was down 2% net-of-fees lagging behind the overall market and the S&P 1500 Value Index. Lower valuation and smaller cap stocks trailed the overall equity market from March to May. The firm also witnessed significant valuation compression in its holdings. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Miller Value Deep Value Strategy highlighted stocks like Quad/Graphics, Inc. (NYSE:QUAD) in the second quarter 2023 investor letter. Headquartered in Sussex, Wisconsin, Quad/Graphics, Inc. (NYSE:QUAD) is a marketing solutions provider. On July 18, 2023, Quad/Graphics, Inc. (NYSE:QUAD) stock closed at $5.22 per share. One-month return of Quad/Graphics, Inc. (NYSE:QUAD) was 45.40%, and its shares gained 77.55% of their value over the last 52 weeks. Quad/Graphics, Inc. (NYSE:QUAD) has a market capitalization of $275.146 million.
Miller Value Deep Value Strategy made the following comment about Quad/Graphics, Inc. (NYSE:QUAD) in its second quarter 2023 investor letter:
"Our two largest detractors during the quarter were Quad/Graphics, Inc. (NYSE:QUAD) and Nabors Industries (NBR) with share prices down 12.1% and 23.5%, respectively, during the quarter. Shares of both companies are significantly mispriced in our opinion, providing potential long-term upside multiples of their current share prices.
Quad’s transformation from a printing company to a marketing experience company continues to pick-up steam. The company has built out an extensive marketing solutions portfolio that provides not only high-volume print, but content, digital, technology and analytic solutions to their clients. We see significant long-term opportunity as the company further expands its services to the 2,900 large corporate clients. With a market cap near $200M the shares look severely mispriced to us, versus the company’s $3B+ revenue base. Current valuation is extremely attractive at .2x Enterprise to Revenue and 3.5x Enterprise to Earnings Before Income, Taxes, Depreciation, and Amortization (EBITDA). With limited Wall Street coverage, we see significant upside potential as the marketplace becomes more familiar with Quad’s attractive positioning and long-term growth story."
Quad/Graphics, Inc. (NYSE:QUAD) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 10 hedge fund portfolios held Quad/Graphics, Inc. (NYSE:QUAD) at the end of first quarter which was 7 in the previous quarter.
We discussed Quad/Graphics, Inc. (NYSE:QUAD) in another article and shared the list of largest commercial printing companies in the world. 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.
