The Unburdening: A Portfolio’s Telling

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The reports arrive, as they always do, bearing the weight of transactions, the quiet erosion of holdings. Brown Capital Management, a custodian of other men’s fortunes, has released its accounting for the final quarter of the past year. Within this bureaucratic pronouncement lies a story – not of dramatic collapse, but of a gradual, considered disengagement. They have lessened their stake in Manhattan Associates, a purveyor of logistical architectures, by some $42.42 million. A sum not insignificant, yet viewed within the broader context of their portfolio’s shifting sands, it is a tremor, not an earthquake.

The reduction brings their ownership to 2.67% of reportable assets under management, a slow retreat from the 3.54% previously held. One observes this not with alarm, but with a certain weary recognition. The market, after all, is a vast, indifferent mechanism, and even the most astute of managers are compelled to navigate its currents, to prune and reshape their holdings as the seasons turn.

Their current constellation of favored investments reveals a preference for those engaged in the increasingly intricate dance of global commerce. Camtek, with $114.33 million allocated, stands as a prominent beacon. Global-e Online, CyberArk Software, Repligen, and Xometry follow, each representing a node in the complex network of modern supply chains and digital fortifications. These are the favored children of the age, shielded, for now, from the inevitable winds of change.

Manhattan Associates itself, as of the last reckoning, traded at $144.27, a price burdened by the anxieties of the present. A decline of 28.4% over the past year places it amongst the fallen, underperforming the broader market by a disheartening 42 percentage points. This is not a failure of the company, precisely, but a symptom of the prevailing climate, a collective apprehension regarding the future of established technologies.

Let us examine the anatomy of this entity, Manhattan Associates. They offer, in essence, the scaffolding upon which modern commerce is built – software for managing supply chains, optimizing inventory, and orchestrating the movement of goods. Their solutions, branded as Manhattan SCALE and Manhattan Active, are employed by a diverse clientele, spanning industries from grocery to pharmaceuticals, across the Americas, Europe, and Asia. A formidable undertaking, reliant on a constant influx of innovation.

The sale by Brown Capital, however, should not be construed as a condemnation. The firm, it appears, has been engaged in a gradual divestment over the past nine quarters, a slow release of a long-held position. After reaping substantial rewards from their investment, begun in 2009, they seem merely to be converting paper gains into liquidity, responding to the demands of their investors. A pragmatic maneuver, devoid of any particular animus toward Manhattan Associates. The company remains the fund’s 14th-largest position, a holding of some consequence, not a discarded trifle.

The prevailing fear, of course, centers on the looming specter of artificial intelligence. The market, in its characteristic shortsightedness, is punishing any software company that might be disrupted by this emergent technology. Manhattan Associates, caught in this indiscriminate sell-off, has seen its valuation plummet. But such anxieties, I believe, are overblown. The company has consistently been recognized as a leader in Warehouse Management Systems, appearing in Gartner’s Magic Quadrant for over a decade. Moreover, they are actively integrating AI agents into their supply chain software, adapting to the inevitable changes.

Currently trading at 21 times free cash flow – its lowest valuation since 2019 – Manhattan Associates appears reasonably priced, given its 8% annualized sales growth over the past decade. The threat of AI disruption remains, certainly, but the company benefits from a significant switching cost moat. Implementing a new supply chain system, pieced together with AI, would be a monumental undertaking. Therefore, I would venture to disagree with Brown Capital’s decision and will likely continue to acquire shares of Manhattan Associates at this attractive valuation. It is a slow, considered investment, a bet on the enduring power of logistical architecture in an increasingly complex world. A world, let us not forget, built not on ephemeral promises, but on the solid foundations of supply and demand.

Metric Value
Revenue (TTM) $1.08 billion
Net income (TTM) $219.95 million
Price (as of market close 2/20/26) $144.27
One-year price change (28.4%)

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2026-02-23 23:53