Should You Hold Potbelly Corporation (PBPB) for the Long-Term?
Immersion Investment Partners, an investment management company, released its second quarter 2023 investor letter. A copy of the same can be downloaded here. The fund returned 22.3% in the second quarter compared to 5.21% for the Russell 2000 Index. The firm is happy with its broad-based year-to-date performance. The fund returned 29.73% year-to-date compared to 8.09% for the benchmark. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Immersion Investment Partners highlighted stocks like Potbelly Corporation (NASDAQ:PBPB) in the second quarter 2023 investor letter. Based in Chicago, Illinois, Potbelly Corporation (NASDAQ:PBPB) owns and operates Potbelly sandwich restaurants. On August 4, 2023, Potbelly Corporation (NASDAQ:PBPB) stock closed at $8.90 per share. One-month return of Potbelly Corporation (NASDAQ:PBPB) was 1.14%, and its shares gained 67.61% of their value over the last 52 weeks. Potbelly Corporation (NASDAQ:PBPB) has a market capitalization of $259.435 million.
Immersion Investment Partners made the following comment about Potbelly Corporation (NASDAQ:PBPB) in its second quarter 2023 investor letter:
“A stock we started purchasing in December 2022, Potbelly Corporation (NASDAQ:PBPB) was first introduced at our 2023 Annual Investor Meeting. The best way to describe the Potbelly opportunity is that of “low-hanging fruit”. We believe that the Potbelly brand is fundamentally strong but prior management proved subpar. The entire board and c-suite has been turned over in the last two years and the new team, led by Bob Wright (former Wendy’s COO), has embarked on a mission to realign the culture and basic operating practices of the organization with a medium-term goal of right-sizing unit economics and long-term goal of growing company-owned and franchised unit count. These efforts are paying off. As of the latest business update provided in June, annualized revenue per location is tracking to $1.35mm vs. pre-COVID levels of $950,000 and restaurant-level profit margins are rebounding very quickly to ~14% (vs. 15% pre-COVID). Over the last twelve months the company has announced the signing of 96 new locations and the sale of 20 company-operated locations to new and existing franchisees. Regardless of the progress made in the business and share price appreciation, the stock continues to trade at less than 10x EBITDA vs. 15x for Potbelly’s small-cap restaurant peers.”
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Potbelly Corporation (NASDAQ:PBPB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 13 hedge fund portfolios held Potbelly Corporation (NASDAQ:PBPB) at the end of first quarter 2023 which was 7 in the previous quarter.
We discussed Potbelly Corporation (NASDAQ:PBPB) in another article and shared 180 Degree Capital Corp.'s views on the company. 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.
