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Voss Capital Trimmed Griffon Corp. (GFF) For Portfolio Risk Management

Voss Capital, LLC an investment management company, released its fourth-quarter 2023 investor letter. A copy of the same can be downloaded here. Voss Capital’s funds, Voss Value Fund, LP, and the Voss Value Offshore Fund, Ltd returned 19.4% and 18.6% net of fees and expenses respectively, in the fourth quarter compared to a 14.0% return for the Russell 2000 Index, 15.3% return for the Russell 2000 Value Index, and 11.7% return for the S&P 500 Index. Voss Value Master Fund’s total gross exposure as of December 31, 2023, was 177.8% and the net long exposure was 80.4%. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.

Voss Capital featured stocks like Griffon Corporation (NYSE:GFF) in the fourth quarter 2023 investor letter. Headquartered in New York, New York, Griffon Corporation (NYSE:GFF) operates through consumer and professional, and home and building products segments. On February 28, 2024, Griffon Corporation (NYSE:GFF) stock closed at $70.11 per share. One-month return of Griffon Corporation (NYSE:GFF) was 18.65%, and its shares gained 86.41% of their value over the last 52 weeks. Griffon Corporation (NYSE:GFF) has a market capitalization of $3.467 billion.

Voss Capital stated the following regarding Griffon Corporation (NYSE:GFF) in its fourth quarter 2023 investor letter:

"We recently sold just over half of our outsized position in Griffon Corporation (NYSE:GFF) for portfolio risk management purposes. In conjunction with stepping off the Board, the company bought 1.5 million shares from Voss, which we believe is a win/win for our investors and GFF shareholders. During our holding period and time engaging with the company, one non-core segment was sold at a high multiple, a thorough strategic review for the rest of the business was conducted, corporate governance improved at the margin, management bonus metrics were changed to incentivize ROI, and the company bought back over 14% of the shares outstanding while also paying $4 of special dividends. The total shareholder return has exceeded 200% since we first wrote a public letter in November 2021 while the Russell 2000 has had a negative return over that time. The market is waking up to the unmatched quality of GFF’s garage door segment as it has become one of the highest EBITDA margin building products companies in the public market.

We believe there remains substantial upside in the stock as any of the following play out: 1) the HBP segment garners an EBITDA multiple that is simply in line with much lower margin building product peers, in the 11.5-12.0x range 2) the CPP initiative to move to a more flexible contract manufacturing base bears fruit in 2025 and beyond, and 3) ongoing aggressive returns of capital to shareholders. As stated above, we remain as optimistic as ever on repair and remodeling spending, which includes garage doors."

A family selecting a wood and wire closet organization in a home improvement store.

Griffon Corporation (NYSE:GFF) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Griffon Corporation (NYSE:GFF) was held by 33 hedge fund portfolios, up from 26 in the previous quarter, according to our database.

We discussed Griffon Corporation (NYSE:GFF) in another article and shared Immersion Investment Partners' 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.