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Giverny Capital Asset Management, LLC, an investment management company, recently published its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. The portfolio continued its strong performance in the fourth quarter, but trailed the S&P 500 Index. The portfolio returned 0.78% compared to a 2.41% return for the S&P 500 Total Return Index in the quarter. The fund returned 21.09% in 2024 compared to the 25.02% return for the Index during the same period. For more information on the fund’s top picks in 2024, please check its top five holdings.
In its fourth quarter 2024 investor letter, Giverny Capital Asset Management emphasized stocks such as Installed Building Products, Inc. (NYSE:IBP). Installed Building Products, Inc. (NYSE:IBP) engages in the installation of insulation, waterproofing, fire-stopping, fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving and mirrors, and other products. The one-month return Installed Building Products, Inc. (NYSE:IBP) was 11.23%, and its shares lost 7.46% of their value over the last 52 weeks. On February 6, 2024, Installed Building Products, Inc. (NYSE:IBP) stock closed at $191.32 per share, with a market capitalization of $5.336 billion.
Giverny Capital Asset Management stated the following regarding Installed Building Products, Inc. (NYSE:IBP) in its Q4 2024 investor letter:
"Installed Building Products, Inc. (NYSE:IBP), purchased in 2022. IBP is a prosaic business, installing fiberglass insulation into new homes, apartment buildings and commercial structures. The key to its success is that fiberglass is manufactured in super-heated furnaces that cannot be turned on and off efficiently. When a manufacturer opens a plant, it produces fiberglass 24 hours a day, 365 days a year. The producers need large customers to absorb those volumes, and they grant those buyers significant discounts. We believe IBP buys fiberglass for about 20% less than smaller customers do. Not even giant homebuilders like DR Horton or Pulte can command the discounts IBP receives, as IBP installs insulation in about 30% of all newly built US homes.