Vltava Fund, an investment management company, recently released its first quarter 2023 investor letter. A copy of the same can be downloaded here. The firm believes that the greatest potential risk for value destruction in asset allocation is through acquisitions. More than 80% of the Fund’s portfolio is comprised of stocks of companies that place buying back their shares at attractive prices at the very top of their asset allocation considerations. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Vltava Fund highlighted stocks like Magna International Inc. (NYSE:MGA) in the first quarter 2023 investor letter. Headquartered in Aurora, Canada, Magna International Inc. (NYSE:MGA) is an automobile parts manufacturer. On April 6, 2023, Magna International Inc. (NYSE:MGA) stock closed at $51.15 per share. One-month return of Magna International Inc. (NYSE:MGA) was -5.49%, and its shares lost 16.59% of their value over the last 52 weeks. Magna International Inc. (NYSE:MGA) has a market capitalization of $14.625 billion.
Vltava Fund made the following comment about Magna International Inc. (NYSE:MGA) in its Q1 2023 investor letter:
“We used most of the available and newly received money to increase several existing positions. There were more than enough opportunities to do so during the past quarter. Nevertheless, two minor changes occurred in Vltava Fund’s portfolio last quarter. We sold the rest of our shares in the Canadian company Magna International Inc. (NYSE:MGA) and opened a new position in the Swiss company Jungfraubahn.
We have twice had Magna in our portfolio. The first time was during 2004–2006 and then again since 2015. We sold it the first time precisely because we were not satisfied with the asset allocation made by management and the main controlling shareholder. After a few years, we re-entered the company after the original main shareholder and founder sold his shares and at the same time the entire management was replaced. While we consider the new managers and their actions both in terms of running the company and in terms of asset allocation to be very good and there has been little to fault them for in the period of just over 7 years, the company’s results have remained below our expectations. This is probably because the overall characteristics of the company’s business type have been less profitable and less attractive than we had originally anticipated. Magna has turned out to be a rather enigmatic stock, as times of high expectations alternated with moments of disappointment. Gradually, we were losing our justification for holding the stock any longer until it disappeared from the portfolio altogether. Our gain on Magna since 2015 has been just over 50%. Even though we have only held the full position for about 4 years, it has been a disappointment.”
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Magna International Inc. (NYSE:MGA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 16 hedge fund portfolios held Magna International Inc. (NYSE:MGA) at the end of the fourth quarter which was 18 in the previous quarter.
We discussed Magna International Inc. (NYSE:MGA) in another article and shared Oakmark Funds’ views on the company. In addition, please check out our hedge fund investor letters Q1 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.