Is U-Haul Holding Company (UHAL) Trading at a Discount?
Heartland Advisors, an investment management company, released its “Heartland Mid Cap Value Strategy” fourth quarter 2022 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the strategy returned a 12.38% (Net of Advisory Fees) compared to a 10.45% gain for the Russell Midcap Value Index. The stock selection in Real Estate, Healthcare, and Energy sectors led to the strategy’s outperformance in the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
Heartland Mid Cap Value Strategy highlighted stocks like U-Haul Holding Company (NYSE:UHAL) in its Q4 2022 investor letter. Based in Reno, Nevada, U-Haul Holding Company (NYSE:UHAL) is a do-it-yourself moving and storage company. On March 10, 2023, U-Haul Holding Company (NYSE:UHAL) stock closed at $60.69 per share. One-month return of U-Haul Holding Company (NYSE:UHAL) was -6.47%, and its shares gained 4.09% of their value over the last 52 weeks. U-Haul Holding Company (NYSE:UHAL) has a market capitalization of $10.564 billion.
Heartland Mid Cap Value Strategy made the following comment about U-Haul Holding Company (NYSE:UHAL) in its Q4 2022 investor letter:
“U-Haul Holding Company (NYSE:UHAL) owns DIY moving and storage assets under the “U-Haul” brand name. The company is a collection of company-owned and independent dealership, moving truck, self-storage real estate, and insurance assets. Through decades of expansion and focus, UHAL has built a dominant distribution network that is more than three times larger than its next two largest competitors combined. This scale has created a significant moat around the franchise as independent dealers are unlikely to switch to a competing brand because doing so would immediately have a negative impact on their revenue.
Yet the stock trades at less than 15 times earnings and more than a 40% discount to our sum-of-the-parts estimate. We believe the market glosses over UHAL’s high-quality moving equipment rental business because of management’s focus on ground-up self-storage development, a strategic decision that reduces short-term profit and creates the illusion of a company with poor returns on capital. In fact, UHAL’s management team has created tremendous value through their real estate investments. There are no major Wall Street analysts covering the stock while peers of similar size have 10 to 20 analysts under coverage. This creates an opportunity to own a high-quality company disguised as a deep-value stock.”
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U-Haul Holding Company (NYSE:UHAL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held U-Haul Holding Company (NYSE:UHAL) at the end of the fourth quarter which was 22 in the previous quarter. In addition, please check out our hedge fund investor letters Q4 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.
