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Mohawk Industries (MHK) Fell on Muted Consumer Demand

Ariel Investments, an investment management company, released its “Ariel Focus Fund” third-quarter 2023 investor letter. A copy of the same can be downloaded here.  In the third quarter, the fund fell -5.87 % compared to a -3.16% and -3.27% decline for the Russell 1000 Value Index and the S&P 500 Index, respectively. Global markets fell in the third quarter. In this context, the government bond yield spiked, which put pressure on the equities and led the high values “magnificent seven” to lose their shine. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.

Ariel Focus Fund highlighted stocks like Mohawk Industries, Inc. (NYSE:MHK) in the third quarter 2023 investor letter. Headquartered in Calhoun, Georgia, Mohawk Industries, Inc. (NYSE:MHK) designs and manufactures flooring products. On December 8, 2023, Mohawk Industries, Inc. (NYSE:MHK) stock closed at $92.30 per share. One-month return of Mohawk Industries, Inc. (NYSE:MHK) was 15.94%, and its shares lost 10.57% of their value over the last 52 weeks. Mohawk Industries, Inc. (NYSE:MHK) has a market capitalization of $5.878 billion.

Ariel Focus Fund made the following comment about Mohawk Industries, Inc. (NYSE:MHK) in its third 2023 investor letter:

"Manufacturer and distributor of floorcovering products, Mohawk Industries, Inc. (NYSE:MHK), detracted from our returns in the period. MHK has historically demonstrated its ability to deliver sales growth and generate strong cash flow despite significant inflation, rising interest rates, and geopolitical instability. However, over the past few quarters, consumer demand has been muted due to a challenging macro environment. Additionally, near-term margin headwinds continue to pressure results, but as channel inventories near the bottom, management is optimistic that volumes will increase as the housing market improves over time. In our view, MHK’s healthy balance sheet and success managing through economic cycles have the company well positioned to benefit from long-term growth in residential remodeling, new home construction and commercial projects. At current levels, MHK is trading at a -64% discount to our estimate of private market value."

An overhead view of a website displaying the multiple options of flooring products available for purchase.

Mohawk Industries, Inc. (NYSE:MHK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held Mohawk Industries, Inc. (NYSE:MHK) at the end of third quarter which was 32 in the previous quarter.

We discussed Mohawk Industries, Inc. (NYSE:MHK) in another article and shared Heartland Value Fund's views on the company. In addition, please check out our hedge fund investor letters Q3 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.