Analyzing Walthausen & Co., LLC's Q3 2022 13F holdings: Key changes observed and their implications.

As we reflect on the third quarter of 2022, it's clear that Walthausen & Co., LLC has made some significant changes in their 13F holdings. In this blog post, we will review the data presented in the CSV and analyze the changes observed in the company's portfolio during the quarter.

First, let's examine the top five holdings in terms of percentage change by the end of Q3. The company's largest increase in holdings was in Great Lakes Dredge & Dock Corporation (GLDD), which saw a 449.8% increase in shares owned and a 360.7% increase in value. This suggests that Walthausen & Co., LLC has high confidence in the company's growth potential and has taken advantage of this by increasing its stake in the company.

The second largest increase was in Mercer International Inc (MERC), which saw a 193.6% increase in shares owned and a 342.6% increase in value. This increase could indicate the company's expectation of future growth in MERC's industry or confidence in its management team.

Heritage Crystal Clean Inc (HCCI) had the third-largest increase in holdings with a 81.2% increase in shares owned and a 333.3% increase in value. The company may have taken advantage of a dip in HCCI's stock price during the quarter, leading to an opportunity to buy low in a company with growth potential.

The fourth-largest increase was in Federal Agricultural Mortgage (AGM), with a 183.9% increase in shares owned and a 314.9% increase in value. AGM provides agricultural real estate and rural housing mortgage loans, and Walthausen & Co., LLC may have taken advantage of growth opportunities in the agricultural industry.

Lastly, Bowlero Corporation (BOWL) had a 35.5% increase in shares owned and a 2823% increase in value. BOWL is a bowling alley and entertainment company that expanded significantly during the pandemic, leading to potential growth opportunities. By increasing its stake in BOWL, Walthausen & Co., LLC may be anticipating future growth in the entertainment industry.

Now let's take a closer look at the largest changes in holdings on a company-by-company basis. For instance, Camden National Corporation (CAC) saw a 155.2% increase in value, but only a 147.3% increase in shares owned. This suggests that while Walthausen & Co., LLC sees growth potential in CAC, the company may be exercising caution in terms of buying more shares.

Similarly, while Chesapeake Energy Corporation (CHK) saw a 217.3% increase in value, it only saw a 38.6% increase in shares owned. This suggests that the company may have taken advantage of a buying opportunity toward the end of the quarter to increase its stake.

On the other hand, Beacon Roofing Supply Inc (BECN) saw a 5.3% decrease in value despite there being no change in shares owned. This suggests that the management team at Walthausen & Co., LLC may have concerns regarding the future growth potential of BECN.

Another company that saw a decrease in value was McGrath Rentcorp (MGRC), with an 8.7% decrease despite no change in shares owned. This may suggest that the company does not see significant growth potential in the near future and therefore reduced its stake in the company.

It's essential to note that while changes in the company's holdings provide insight into the team's expectations for the future, it is not necessarily indicative of the company's immediate financial performance. It's also important to remember that investment strategies differ among firms and can be influenced by multiple factors, including market trends and overall industry outlook.

In conclusion, Walthausen & Co., LLC has made significant changes in their 13F holdings in the third quarter of 2022, primarily indicating their confidence in several companies' potential for growth. While it's important to weigh in the risks and market factors that can change quickly, these changes provide a glimpse into the firm's current investment strategies and provide the public with valuable insight into the state of the market.