Greystone Capital Exited Seneca Foods (SENEA) with 40% Gain
Greystone Capital Management, an investment management company, released its fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the return for separate accounts managed by the firm ranged from +16.4% to +20.4%. The median account returned +18.1%, net of fees in Q4, and +11.8%, net of fees for the full year 2023. In the fourth quarter and FY2023, results exhibited both favorably and unfavorably when compared to the returns of S&P 500 and Russell 2000, which were +11.7% and +14.0% respectively during the quarter and +26.3% and +16.9% for the entire year. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Greystone Capital Management featured stocks such as Seneca Foods Corporation (NASDAQ:SENEA) in the fourth quarter 2023 investor letter. Headquartered in Fairport, New York, Seneca Foods Corporation (NASDAQ:SENEA) offers packaged fruits and vegetables. On February 2, 2024, Seneca Foods Corporation (NASDAQ:SENEA) stock closed at $54.04 per share. One-month return of Seneca Foods Corporation (NASDAQ:SENEA) was 1.54%, and its shares lost 12.04% of their value over the last 52 weeks. Seneca Foods Corporation (NASDAQ:SENEA) has a market capitalization of $384.939 million.
Greystone Capital Management stated the following regarding Seneca Foods Corporation (NASDAQ:SENEA) in its fourth quarter 2023 investor letter:
"We sold our position in Seneca Foods Corporation (NASDAQ:SENEA) during the quarter, shortly after it was featured as a new position in the Q3 letter. In early November, the company reported their Q2 results which revealed an over-inventoried, highly levered company whose earnings contracted year-over-year, on top of a continued cash burn due to the substantial inventory requirements for canned goods. After the earnings report, Seneca also announced the acquisition of Green Giant foods, the rationale for which I didn’t understand, despite the cheap price paid.
Although some of these developments were expected, what I didn’t expect is the stress that the company would put its balance sheet under in such a short period of time. For canned vegetable processors, the largest seasonal pack takes place from July to November. This means the bloated inventory position makes sense for this time of year. However, Seneca now has to move through their goods in an industry with declining volumes, which makes me nervous given where the balance sheet sits today. It’s clear that there is substantial upside should the business ever trade closer to its true book value but given the number of opportunities available in today’s market and my preference for cleaner balance sheets, it made sense to exit the position with a 40% gain."
An industrial factory complex, with conveyor belts producing packaged fruits and vegetables.
Seneca Foods Corporation (NASDAQ:SENEA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 10 hedge fund portfolios held Seneca Foods Corporation (NASDAQ:SENEA) at the end of third quarter which was 10 in the previous quarter.
We discussed Seneca Foods Corporation (NASDAQ:SENEA) in another article and shared Alluvial Capital Management’s views on the company. In addition, please check out our hedge fund investor letters Q4 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.
