Here is why you need to put money into Covenant Logistics Group (CVLG)

Heartland Advisors, an funding administration agency, has printed its letter to traders “Heartland Worth Fund” for the third quarter of 2021 – a replica of which may be discovered seen right here. Bubble inflation throughout many asset courses initially of the quarter drained the oxygen from worth shares and the Fund edged down however stored tempo with its benchmark. We consider the pullback is non permanent and that your holdings ought to be in a stronger place over the long run than lots of the darlings in as we speak’s market. You may try the highest 5 holdings within the fund to get a really feel for his or her high picks for 2021.

Heartland Advisors, in its letter to traders for the third quarter of 2021, talked about Covenant Logistics Group, Inc. (NASDAQ: CVLG) and mentioned his place on the corporate. Covenant Logistics Group, Inc. is a Chattanooga, Tennessee-based truck service with a market capitalization of $ 468.8 million. CVLG has returned 91.59% year-to-date, whereas its 12-month returns are up 63.36%. The inventory closed at $ 27.14 per share on October 21, 2021.

Here is what Heartland Advisors has to say about Covenant Logistics Group, Inc. in its Q3 2021 letter to traders:

“As the worldwide financial system continues to function via provide chain points that emerged in the course of the pandemic, industrial trucking firms reminiscent of Covenant Logistics Group Inc. (CVLG) ought to prosper.

Covenant Logistics offers transport providers for devoted routes and on-time deliveries. The corporate benefited from elevated demand in a decent maritime market. Administration has additionally launched into an aggressive plan to extend revenue ranges via the sale of its low-margin refrigerated supply fleet, which ought to mitigate its risky place within the transport trade.

Though shares have appreciated, they continue to be engaging and commerce at 8 instances earnings and 4 instances enterprise worth relative to earnings earlier than curiosity, taxes, depreciation and amortization (EV / EBITDA). With shares listed at simply 70% of our intrinsic worth estimates, we consider traders ought to be effectively compensated within the coming quarters as the corporate completes its transformation right into a excessive margin freight service. “

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Based mostly on our calculations, Covenant Logistics Group, Inc. (NASDAQ: CVLG) didn’t safe a spot in our checklist of 30 hottest shares amongst hedge funds. CVLG was in 9 hedge fund portfolios on the finish of the primary half of 2021, in comparison with 12 funds within the earlier quarter. Covenant Logistics Group, Inc. (NASDAQ: CVLG) generated a return of 39.85% over the previous 3 months.

The popularity of hedge funds as savvy traders has been tarnished over the previous decade, as their hedged returns couldn’t sustain with the unhedged returns of inventory indices. Our analysis has proven that small cap hedge fund inventory choice managed to beat the market by double digits yearly between 1999 and 2016, however the margin for outperformance has shrunk lately. Nonetheless, we had been nonetheless in a position to determine prematurely a choose group of hedge funds which have outperformed S&P 500 ETFs by 115 share factors since March 2017 (see particulars right here). We had been additionally in a position to determine prematurely a choose group of hedge funds that underperformed the market by 10 share factors per 12 months between 2006 and 2017. Curiously, the margin of underperformance of those shares has elevated lately. Buyers who’re lengthy available in the market and quick on these shares would have reported greater than 27% per 12 months between 2015 and 2017. Now we have been monitoring and sharing the checklist of those shares since February 2017 in our quarterly e-newsletter.

At Insider Monkey, we scour a number of sources to uncover the following huge investing thought. For instance, lithium mining is among the quickest rising industries proper now, so we’re inventory areas like this. rising lithium shares. We undergo lists just like the 12 finest EV shares to decide on the following Tesla which is able to supply a 10x return. Despite the fact that we solely suggest positions in a tiny fraction of the businesses we analyze, we verify as many shares as doable. We learn letters from hedge fund traders and hearken to fairness pitches at hedge fund conferences. You may subscribe to our free day by day e-newsletter at our residence web page.

Disclosure: none. This text was initially printed on Monkey provoke.

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