Here’s Why Valmont Industries (VMI) Declined Despite Several Secular Tailwinds
Artisan Partners, an investment management company, released its “Artisan Small Cap Fund” fourth quarter 2023 investor letter. A copy of the same can be downloaded here. The portfolio had a positive absolute return in Q4 but underperformed the Russell 2000 Growth Index due to security selection, particularly in the healthcare and information technology sectors. In the fourth quarter, its Investor Class fund ARTSX returned 9.18%, Advisor Class fund APDSX posted a return of 9.26%, and Institutional Class fund APHSX returned 9.28%, compared to a return of 12.75% for the Russell 2000 Growth Index. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Artisan Small Cap Fund featured stocks like Valmont Industries, Inc. (NYSE:VMI) in the fourth quarter 2023 investor letter. Headquartered in Omaha, Nebraska, Valmont Industries, Inc. (NYSE:VMI) manufactures and sells metal products. On March 8, 2024, Valmont Industries, Inc. (NYSE:VMI) stock closed at $215.01 per share. One-month return of Valmont Industries, Inc. (NYSE:VMI) was 9.80%, and its shares lost 28.12% of their value over the last 52 weeks. Valmont Industries, Inc. (NYSE:VMI) has a market capitalization of $4.347 billion.
Artisan Small Cap Fund stated the following regarding Valmont Industries, Inc. (NYSE:VMI) in its fourth quarter 2023 investor letter:
"Along with Argenx, our top detractors in Q4 were Lattice Semiconductor and Valmont Industries, Inc. (NYSE:VMI). Valmont is a leading designer and manufacturer of engineered metal products. There remains a lot to like about the company. It has exposure to several secular tailwinds (accelerating spending for renewables, grid hardening and renewed irrigation investments to ensure more efficient water usage), a solid balance sheet, strong free cash flow generation and an attractive valuation. However, the company abruptly changed CEOs in July and reported a goodwill impairment in its most recent earnings release. The goodwill impairment was on Prospera, an AI company focused on agriculture that Valmont acquired in 2021, due to significantly slower growth than originally projected. Given the operational missteps and new management team, we have started to harvest the position after giving back most of the strong gains generated in 2021 and 2022."
Aerial view of highly-engineered steel towers, with their intricate frameworks shining in the sun.
Valmont Industries, Inc. (NYSE:VMI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. At the end of the fourth quarter, Valmont Industries, Inc. (NYSE:VMI) was held by 32 hedge fund portfolios, up from 26 in the previous quarter, according to our database.
We discussed Valmont Industries, Inc. (NYSE:VMI) in another article and shared Artisan Small Cap Fund's views on the company in the previous quarter. 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.
