Middle Coast Investing, an investment advisor firm, released its third-quarter investor letter. A copy of the letter can be downloaded here. It was a frustrating quarter for the firm. The portfolio appreciated in the quarter but lagged the main indices and closer benchmarks. The portfolio’s price to earnings for the trailing 12 months (TTM) was 19.7. Cash and equivalents accounted for 17.1% of the portfolio at the end of the quarter, with an estimated average yield of 3%. This compares to 13.4% of the portfolio and a 3.9% yield at the end of Q2. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Middle Coast Investing highlighted stocks like ABM Industries Incorporated (NYSE:ABM) in the third quarter 2024 investor letter. ABM Industries Incorporated (NYSE:ABM) is a company that offers integrated facility, infrastructure, and mobility solutions. The one-month return of ABM Industries Incorporated (NYSE:ABM) was 4.75%, and its shares gained 21.89% of their value over the last 52 weeks. On October 7, 2024, ABM Industries Incorporated (NYSE:ABM) stock closed at $52.29 per share with a market capitalization of $3.283 billion.
Middle Coast Investing stated the following regarding ABM Industries Incorporated (NYSE:ABM) in its Q3 2024 investor letter:
“ABM Industries Incorporated (NYSE:ABM) – ABM stands for American Building Maintenance. This company is primarily a janitorial company – schools, businesses, and airports outsource their janitorial services by hiring ABM. ABM also offers parking lot maintenance, facility engineering, and provides airport services (passenger assistance, logistics, catering).
This is a boring business. Its ‘steady’ business lines have grown revenue at about 4% a year since 2019, and it’s hard to see it doing better than GDP growth. But we’re only paying 14 times earnings or so, and from our experience owning airport shares, know that this business should do well even in hard times.
The two upside kickers are a) similar to Apogee’s challenge with office buildings, ABM is struggling in its business and industry line, and if that ever goes back to normal, that could be a tailwind, and b) it is building out a microgrid and electric vehicle power station installation business. ABM’s ‘project’ business, which is less stable, has grown 9.4% a year since 2019, and while this is only 25% of the overall business, it at least has a profile that could outpace the steadier business and transform ABM’s overall business.”
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ABM Industries Incorporated (NYSE:ABM) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held ABM Industries Incorporated (NYSE:ABM) at the end of the second quarter which was 27 in the previous quarter. In the fiscal third quarter, ABM Industries Incorporated’s (NYSE:ABM) revenue increased 3.3% year-over-year to $2.1 billion. While we acknowledge the potential of ABM Industries Incorporated (NYSE:ABM) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In addition, please check out our hedge fund investor letters Q3 2024 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.