Should You Invest in Stagwell (STGW)?
Choice Equities Capital Management, a hedge fund manager, released its second-quarter 2023 investor letter recently. You can view it here. In the second quarter, the fund returned +8.0% on a net basis which brought the year-to-date net performance to +9.0%. This compares to Russell 2000’s +5.2% gain for Q2 and +8.1% year-to-date. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Choice Equities Capital Management highlighted stocks like Stagwell Inc. (NASDAQ:STGW) in the second quarter 2023 investor letter. Headquartered in New York, New York, Stagwell Inc. (NASDAQ:STGW) is a media and public relations agency. On August 1, 2023, Stagwell Inc. (NASDAQ:STGW) stock closed at $6.81 per share. One-month return of Stagwell Inc. (NASDAQ:STGW) was -4.49%, and its shares lost 2.58% of their value over the last 52 weeks. Stagwell Inc. (NASDAQ:STGW) has a market capitalization of $2.908 billion.
Choice Equities Capital Management made the following comment about Stagwell Inc. (NASDAQ:STGW) in its second quarter 2023 investor letter:
"Stagwell Inc. (NASDAQ:STGW) – Stagwell is another company likely to benefit from a potential increase in spend in advertising budgets. The company can most succinctly be described as a digitally savvy marketing agency. CEO Mark Penn has built the company through acquisition, starting with the first major platform acquired which was media agency MDC Partners in 2019. With roots tracing to Penn’s experience in running polling agencies, Penn has pieced the business together through acquisition, with a focus on adding entities with targeted digital capabilities to help their clients succeed in the digital transformations of their marketing functions. The company counts Apple, Google, Amazon and Microsoft amongst its customers. As a relatively new entity, the agency is devoid of many of the low growth business elements its older legacy-oriented peers encounter with their exposures to decaying media verticals.
Shares look attractively priced, trading at a single digit PE multiple and offering a mid-teens free cash flow yield. The company has a highly cash generative model, offers attractive topline organic growth that is likely moving into the mid-teens going forward on the back of digital tailwinds and a ramp in political spending. Additionally, recent share repurchases have cleaned up the cap table, shrunk the float and should make the story easier to understand for investors who still may be unfamiliar with the name."
Pixabay/Public Domain
Stagwell Inc. (NASDAQ:STGW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held Stagwell Inc. (NASDAQ:STGW) at the end of first quarter which was 10 in the previous quarter.
We discussed Stagwell Inc. (NASDAQ:STGW) in another article and shared the list of digital marketing companies and agencies 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.
