Ariel Investment, an investment management company, released its “Ariel Fund” third-quarter investor letter. A copy of the same can be downloaded here. In the third quarter, the fund generated a loss of -7.47%, underperforming the Russell 2500 Value Index, which returned a loss of -4.50%, and the Russell 2500 Index, which returned a -2.82% loss. Inflation concerns, Russia-Ukraine tension, energy price, and Federal Reserve’s aggressive actions impacted the investors’ confidence in the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
Ariel Investment highlighted stocks like Mohawk Industries, Inc. (NYSE:MHK) in the Q3 2022 investor letter. Headquartered in Calhoun, Georgia, Mohawk Industries, Inc. (NYSE:MHK) is a flooring products company. On December 1, 2022, Mohawk Industries, Inc. (NYSE:MHK) stock closed at $102.90 per share. One-month return of Mohawk Industries, Inc. (NYSE:MHK) was 14.33% and its shares lost 40.47% of their value over the last 52 weeks. Mohawk Industries, Inc. (NYSE:MHK) has a market capitalization of $6.538 billion.
Ariel Investment made the following comment about Mohawk Industries, Inc. (NYSE:MHK) in its Q3 2022 investor letter:
“Alternatively, leading manufacturer and distributor of floorcovering products Mohawk Industries, Inc. (NYSE:MHK) detracted from relative returns in the quarter. MHK has consistently demonstrated its ability to deliver sales growth and generate strong cash flow despite significant inflation, rising interest rates, and geopolitical instability. However, this quarter was an inflection point as the slowing U.S. housing market began to change consumer discretionary spend. Higher natural gas prices and constrained supply in Europe presented another headwind. Given these factors, MHK guided to softening demand and increasing pressure on margins moving forward. Management initiated corrective actions across the enterprise including implementing further price increases, enhancing service levels and restructuring to reduce costs. In our view, MHK’s track record of success managing through economic cycles and healthy balance sheet have the company wellpositioned to benefit from long-term growth in residential remodeling, new home construction and commercial projects. At current levels, MHK is trading at a -67% discount to our estimate of private market value.”
Photo by Max Williams on Unsplash
Mohawk Industries, Inc. (NYSE:MHK) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held Mohawk Industries, Inc. (NYSE:MHK) at the end of the third quarter which was 27 in the previous quarter.
We discussed Mohawk Industries, Inc. (NYSE:MHK) in another article and shared the list of stocks recommended by BofA. In addition, please check out our hedge fund investor letters Q3 2022 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.