Overview of Chuck Royce (Trades, Portfolio)'s Recent Stock Transaction
On December 31, 2023, the investment firm managed by Chuck Royce (Trades, Portfolio) executed a notable transaction involving CPI Aerostructures Inc (CVU, Financial). The firm reduced its holdings in CVU by 8,300 shares, which resulted in a -1.21% change in the position. The shares were traded at a price of $2.73 each. Following this transaction, the firm's total share count in CPI Aerostructures stood at 676,469, representing a 5.34% ownership in the company and accounting for 0.02% of the firm's portfolio.
Profile of the Guru: Chuck Royce (Trades, Portfolio)
Charles M. Royce, a venerated figure in the investment community, is renowned for his expertise in small-cap investing. Since 1972, Royce has been at the helm of the Royce Pennsylvania Mutual Fund, showcasing a steadfast commitment to value investing. With a bachelor's degree from Brown University and an MBA from Columbia University, Royce's firm focuses on companies with market capitalizations up to $5 billion, seeking stocks that trade below their estimated enterprise value. The firm's top holdings include FormFactor Inc (FORM, Financial), Ziff Davis Inc (ZD, Financial), Air Lease Corp (AL, Financial), Kennedy-Wilson Holdings Inc (KW, Financial), and Arcosa Inc (ACA, Financial), with a strong preference for the industrials and technology sectors. The firm's equity portfolio is valued at $9.82 billion.
CPI Aerostructures Inc Company Overview
CPI Aerostructures Inc, with its inception dating back to February 19, 1993, operates within the aerospace and defense industry in the United States. The company specializes in manufacturing structural aircraft parts for both commercial and defense sectors, offering a suite of services including engineering, program management, supply chain management, kitting, and Maintenance Repair and Overhaul (MRO). CPI Aerostructures is a key supplier for various aircraft, including the E-2D Advanced Hawkeye, A-10 Thunderbolt, Gulfstream G650, UH-60 BLACK HAWK helicopter, and S-92 helicopter. The company's market capitalization stands at $33.709 million, with a current stock price of $2.66.
Analysis of the Trade Action
The reduction in Chuck Royce (Trades, Portfolio)'s position in CPI Aerostructures Inc reflects a strategic move within the firm's portfolio. Despite the trade's minimal impact on the overall portfolio, it signifies a shift in the firm's investment stance towards CVU. The trade was executed at a price point below the GF Value of $3.82, indicating that the firm capitalized on the stock's valuation at the time of the trade. However, the stock's price has since decreased by -2.56%, suggesting a potential reassessment of the stock's future prospects by the firm.
Market Context and Stock Valuation
CPI Aerostructures Inc's current market capitalization is $33.709 million, with a stock price of $2.66. The stock's PE Ratio stands at 3.59%, indicating profitability, but the GF Valuation warns of a possible value trap, advising investors to think twice. The stock is trading at 0.70 times its GF Value, and has experienced a significant decline of -81.82% since its IPO. Year-to-date, the stock has seen a -4.32% change in price.
Financial Health and Performance Rankings
The financial health of CPI Aerostructures Inc is a mixed bag, with a Financial Strength rank of 4/10 and a Profitability Rank of 5/10. The company's Growth Rank is low at 2/10, while the GF Value Rank is at the maximum of 10/10. The Momentum Rank is 4/10, and the company has a Piotroski F-Score of 6, indicating a somewhat stable financial situation. The Altman Z score of 0.91, however, suggests potential financial distress.
Sector and Industry Considerations
The Aerospace & Defense industry is known for its cyclical nature and dependency on government spending. CPI Aerostructures Inc's positioning within this sector requires careful consideration of external factors such as defense budgets and commercial aviation demand. The company's role as a subcontractor to prime aircraft manufacturers also adds a layer of dependency on the health of the broader industry.
Implications for Value Investors
Chuck Royce (Trades, Portfolio)'s decision to reduce holdings in CPI Aerostructures Inc may offer insights into the firm's assessment of the stock's value and future performance. Value investors should consider the trade in the context of the company's financial health, industry positioning, and current market valuation. With the stock's GF Score of 66/100, indicating poor future performance potential, and the cautionary note from the GF Valuation, investors should conduct thorough due diligence before making investment decisions.
As of January 24, 2024, all data and rankings provided are based on the relative data supplied, ensuring accuracy and relevance for value investors seeking to understand the implications of Chuck Royce (Trades, Portfolio)'s recent trade action.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
