So, Permian Investment Partners decided to throw $41.7 million at Resideo Technologies. Because nothing says “confidence” like buying 965,936 shares of a company that’s still losing money. Let’s unpack this.
What Happened
Permian, a fund with $885.7 million in U.S. equity assets, stuck its nose into Resideo’s business. They bought 4.7% of their portfolio, which is like bringing a salad to a steak dinner. The SEC filing says it’s all about “strategic positioning.” Or maybe they just needed a new hobby.
What Else to Know
Their top five holdings? A mix of utilities, construction, and biotech. Resideo’s sitting at the bottom of that list. That’s not reassuring. If you’re investing in something, you’d expect it to be, you know, a priority. Not a afterthought.
- NYSE:TIC: $193.9 million (21.9% of AUM)
- NASDAQ:GRFS: $173.8 million (19.6% of AUM)
- NYSE:KBR: $150.5 million (17% of AUM)
- NYSE:NRG: $125 million (14.1% of AUM)
- NYSE:ARMK: $81.7 million (9.2% of AUM)
Resideo’s stock is up 39% this year. But here’s the kicker: the company lost $640 million last year. That’s not a typo. It’s a warning sign. Like a “Beware of the Dog” sign that’s actually a trap.
Company Overview
| Metric | Value |
|---|---|
| Price (as of Monday) | $36.38 |
| Market Capitalization | $5.4 billion |
| Revenue (TTM) | $7.4 billion |
| Net Income (TTM) | ($640 million) |
Company Snapshot
- Resideo sells things that keep your house warm and safe. Or at least, that’s the pitch. But if they’re losing money, maybe they’re not doing either well.
- They sell products through a distribution segment. Which is just a fancy way of saying “we don’t make the stuff, we just ship it.”
- They serve contractors, OEMs, and retailers. Which is great, unless those contractors are also your competitors. Or maybe the OEMs are just using them as a pawn.
Resideo’s a big name, but big names don’t always mean big profits. Especially when the numbers don’t add up. It’s like buying a luxury car that’s missing the engine.
Foolish Take
Let’s be real: Resideo’s not a tech stock. It’s a cash-burning industrial company with a shiny logo. The “margin expansion” they’re bragging about? That’s just a fancy way of saying they’re cutting costs. Which is fine, but not exactly a long-term strategy.
The fund’s position is small, but that’s not a comfort. If they’re only putting 4.7% into something, maybe they’re not sure. Or maybe they’re just testing the waters. Which is fine, but why not just put all the money into something that’s already proven?
Shares are down 18% from October highs. That’s not a crash, but it’s not a victory either. For long-term investors, this is like buying a house with a leaky roof and a shaky foundation. You can fix it, but why bother?
Glossary
Position: Like a seat at a party. But instead of a seat, it’s a bunch of shares. And instead of a party, it’s a financial disaster waiting to happen.
Reportable U.S. equity assets: The stuff the fund has to admit they own. Because otherwise, they’d be hiding it. Which is probably what they’re doing.
Fund AUM: The total money the fund manages. Which is a lot, but not enough to save Resideo.
Top five holdings: The five biggest bets the fund has. Which, in this case, are all better than Resideo.
Quarterly portfolio update: A report that says “we did this, and this, and this.” But nothing about why.
Aggregate market value: The total worth of all the stuff the fund owns. Which is a number that doesn’t mean much if the stuff is losing money.
Stake: A piece of a company. Like a slice of pizza. But instead of cheese, it’s risk.
End markets: The people who actually use the company’s products. Which, in this case, might be the only ones who know the company’s in trouble.
OEMs: Companies that make parts for other companies. Like a subcontractor who’s always late.
Distribution segment: The part of the business that gets the product to the customer. Which is important, but not as important as making the product in the first place.
Integrated offerings: A bunch of products that supposedly work together. Like a puzzle with missing pieces.
TTM: Time to panic. Because if the numbers are 12 months old, they’re probably not good.
🧠
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2025-12-15 21:22