Home Hedge Funds Is XPEL (XPEL) a High-Quality Business?

Is XPEL (XPEL) a High-Quality Business?


Plural Investing, an investment management company, released its fourth quarter 2023 investor letter. A copy of the same can be downloaded here. In the fourth quarter, the fund’s gross return was 14.5% and its net return was 14.3%. The firm’s objective is to produce returns over five years that are noticeably higher than those of the global markets. In addition, please check the fund’s top five holdings to know its best picks in 2023.

Plural Investing featured stocks such as XPEL, Inc. (NASDAQ:XPEL) in the fourth quarter 2023 investor letter. Headquartered in San Antonio, Texas, XPEL, Inc. (NASDAQ:XPEL) manufactures and distributes automotive products. On January 24, 2024, XPEL, Inc. (NASDAQ:XPEL) stock closed at $52.76 per share. One-month return of XPEL, Inc. (NASDAQ:XPEL) was -2.31%, and its shares lost 30.39% of their value over the last 52 weeks. XPEL, Inc. (NASDAQ:XPEL) has a market capitalization of $1.458 billion.

Plural Investing stated the following regarding XPEL, Inc. (NASDAQ:XPEL) in its fourth quarter 2023 investor letter:

XPEL, Inc. (NASDAQ:XPEL) is a global supplier of protection films. Like the film protecting the surface of your phone, XPEL’s films can be applied to your car body, car window, and home or office window to protect it from scratches and chips or provide privacy and UV protection. The company is led by CEO Ryan Pape, who has high integrity, a strong customer focus, and who concentrates on long term value creation when allocating capital. Pape became CEO in 2010 and has steered the company from near bankruptcy to a $1.4bn valuation today. He owns shares worth $57mm and is aged 42, giving him a long runway and incentive to compound capital. We invested in XPEL shares in 2020 between $11-$15 and have been shareholders since, tending to reduce our position between $70-$100 and add to it between $40-50. The stock halved from the $80s to the low $40s late last year primarily because of short seller reports. We nearly tripled our share ownership as a result. The stock trades at $50 today and we think will be worth $100- $150 in three years.

We think XPEL is one of the highest quality businesses we have come across and that its competitive advantages are generally greatly misunderstood. We believe its advantages are its scale, customer captivity, excellent owner/operator, and culture.”

XPEL’s primary product is paint protection film (‘PPF’), which accounts for 57% of its revenues. We estimate the company has around 40% market share in the US, making it the largest player…” (Click here to read the full text)

A mechanic working in a busy automotive service station, attended by customers.

XPEL, Inc. (NASDAQ:XPEL) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 14 hedge fund portfolios held XPEL, Inc. (NASDAQ:XPEL) at the end of third quarter which was 13 in the previous quarter.

We discussed XPEL, Inc. (NASDAQ:XPEL) in another article and shared Polen Capital’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q4 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.

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