On November 5, 2024, Meritage Group LP (Trades, Portfolio) executed a notable reduction in its holdings of Perimeter Solutions Inc (PRM, Financial). The firm decreased its position by 1,893,907 shares, which represents a 23.67% decrease in its stake. This transaction was carried out at a trade price of $13.5 per share. Despite this reduction, Meritage Group LP (Trades, Portfolio) still retains a significant number of shares in Perimeter Solutions, maintaining a substantial presence in the company's equity.
About Meritage Group LP (Trades, Portfolio)
Meritage Group LP (Trades, Portfolio) is a San Francisco-based investment management firm, established in 2006. Operating as a hedge fund sponsor, the firm manages over $12.3 billion in assets. It primarily focuses on the consumer discretionary and technology sectors. The firm is led by Chairman Nathaniel Simons, with co-Presidents Alex Richard Magaro and David Kenneth Zierk. Meritage Group LP (Trades, Portfolio) employs a fundamental methodology for investment decisions, investing globally in public equity and fixed income markets. The firm’s top holdings include companies like Autodesk Inc (ADSK, Financial) and Aon PLC (AON, Financial), reflecting its strategic focus on technology and industrial sectors.
Overview of Perimeter Solutions Inc
Perimeter Solutions Inc, trading under the symbol PRM, is a U.S.-based company specializing in lubricant additives and firefighting chemicals. The company went public in November 2021 and currently holds a market capitalization of $1.92 billion. Perimeter Solutions is considered modestly undervalued with a GF Value of $14.79, indicating potential for growth. The company operates in critical sectors where precision and reliability are paramount, such as fire safety and specialty products.
Impact of the Transaction
The reduction in shares had a -0.6 impact on Meritage Group's portfolio, with the stock now comprising 1.94% of the firm's holdings. Despite the reduction, Meritage Group still holds 6,106,093 shares of PRM, accounting for 4.18% of its total equity investments. This strategic adjustment reflects the firm's ongoing evaluation of its investment portfolio and market conditions.
Financial Metrics and Valuation of PRM
Perimeter Solutions Inc's current stock price is $13.13, slightly below its GF Value, indicating a modest undervaluation. The company has a GF Score of 64/100, suggesting poor future performance potential. Its balance sheet rank is 5/10, and its profitability rank is 4/10, reflecting challenges in financial strength and profitability.
Market Performance and Growth Indicators
PRM has experienced a year-to-date price increase of 186.06%, with a 3-year earnings growth rate of 63.20%. However, the company shows negative revenue growth over the past three years at -3.60%, highlighting challenges in its business segments. These mixed indicators suggest a complex market environment for Perimeter Solutions.
Other Notable Investors in PRM
Weitz Investment Management Inc holds the largest share percentage of PRM among gurus, indicating significant interest from institutional investors. Additionally, Joel Greenblatt (Trades, Portfolio) is a notable investor in PRM, further underscoring the stock's appeal to prominent market experts.
Conclusion
The recent transaction by Meritage Group LP (Trades, Portfolio) reflects a strategic rebalancing of its portfolio, while still maintaining a significant stake in Perimeter Solutions Inc. The firm's decision to reduce its holdings aligns with its investment philosophy and market analysis. As PRM continues to navigate its market challenges, the involvement of notable investors like Meritage Group and others suggests ongoing interest and potential for future growth.
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.
