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Here’s Why Longleaf Partners Discarded their Enerpac (EPAC) Position

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Jose Karlo Mari Tottoc
·3 min read
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Longleaf Partners Small-Cap Fund, an independent investment management firm, published its fourth quarter 2020 investor letter – a copy of which can be downloaded here. A return of 17.56% was recorded by the fund in the fourth quarter of 2020, below its Russell 2000 benchmark that delivered a 31.37% return in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Longleaf Partners Small-Cap Fund, in their Q4 2020 investor letter, mentioned Enerpac Tool Group Corp. (NYSE: EPAC) and emphasized their views on the company. Enerpac Tool Group Corp. is a Menomonee Falls, Wisconsin-based industrial company that currently has a $1.6 billion market capitalization. Since the beginning of the year, EPAC delivered a 16.14% return, extending its 12-month gains to 62.80%. As of March 26, 2021, the stock closed at $26.26 per share.

Here is what Longleaf Partners Small-Cap Fund has to say about Enerpac Tool Group Corp. in their Q4 2020 investor letter:

"Enerpac (-46%, -2.32%; --, --), the industrial tools company formerly called Actuant, detracted from performance in the year. While the company finally completed its transition to a pure-play tool business late in 2019, it faced COVID challenges in certain verticals like oil and gas in 2020. We also concluded that management was unlikely to monetize assets (or sell the full business) at an accretive price, so we sold our position to move onto better opportunities."

Best Industrial Dividend Stocks to Buy for 2021
Best Industrial Dividend Stocks to Buy for 2021


Our calculations show that Enerpac Tool Group Corp. (NYSE: EPAC) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Enerpac Tool Group Corp. was in 11 hedge fund portfolios. EPAC delivered a 20.02% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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Disclosure: None. This article is originally published at Insider Monkey.