Why One Fund Exited a $6 Million MYR Group Stake Last Quarter Amid Stock's 50% Rally

On Friday, Denver-based 1060 Capital Management disclosed in an SEC filing that it sold out its entire position in MYR Group (NASDAQ:MYRG), a move representing a net change of $5.9 million.

What Happened

According to a filing with the U.S. Securities and Exchange Commission released Friday, 1060 Capital sold its entire stake in MYR Group during the third quarter. The move involved the disposition of all 32,500 previously held shares, reducing the position value to zero. The estimated value of the transaction was $5.9 million based on quarterly average pricing.

What Else to Know

Top holdings after the filing:

• NYSE:RSI: $9.2 million (31.3% of AUM)
• NYSE:PRIM: $6.9 million (23.3% of AUM)
• NASDAQ:LULU: $5.3 million (18.1% of AUM)
• NYSE:NVRI: $4.2 million (14.1% of AUM)
• NYSE:MTZ: $2.1 million (7.2% of AUM)

As of Friday, shares of MYR Group were priced at $229.44, up 52.6% over the past year and well outperforming the S&P 500, which is up about 13% in the same period. MYR Group stock is currently 4.9% below its 52-week high.

Company Overview

Company Snapshot

MYR Group is a leading provider of electrical construction services with a diversified portfolio across transmission, distribution, and commercial/industrial projects. The company leverages its scale and technical expertise to deliver critical infrastructure solutions for utilities and large-scale commercial clients. MYR Group serves investor-owned utilities, cooperatives, independent power producers, government agencies, commercial and industrial facility owners, and general contractors in the United States and Canada. Its broad customer base and long-standing industry presence support a resilient business model and competitive positioning in the North American market.

Foolish Take

For long-term investors, 1060 Capital’s move matters because it fits a broader pattern: The firm has only 10 reported holdings, and it's been cycling out of names where it presumably thinks original catalysts have largely played out. Last quarter, the fund also sold Brightstar Lottery and Armstrong World Industries—while adding Lululemon and building a sizable Tesla put position. In a portfolio built around high-conviction, catalyst-driven bets, MYR’s near-all-time-high stock price has likely left fewer ways to “win” relative to more contrarian opportunities.

As for fundamentals, MYR's third-quarter revenue rose to $950.4 million (up 7% year over year), gross margins expanded to 11.8% from 8.7%, and EBITDA nearly doubled to $62.7 million. That's all while net income jumped to a record $32.1 million, and free cash flow strengthened materially. Shares are up more than 50% over the past year and sit just 4.9% below their 52-week high.

Ultimately, it appears MYR remains a high-quality operator, but for deep fundamental investors, future upside increasingly depends on continued execution rather than mean reversion—making patience essential at these levels and potentially coming at a higher opportunity cost as new catalysts emerge.

Glossary

13F reportable assets: Assets that institutional investment managers must report quarterly to the U.S. Securities and Exchange Commission on Form 13F.
AUM (Assets Under Management): The total market value of investments managed on behalf of clients by a fund or firm.
Quarterly average pricing: The average price of a security over a specific quarter, used to estimate transaction values.
Trailing twelve months (TTM): The 12-month period ending with the most recent quarterly report.
Disposition: The act of selling or otherwise removing an asset from a portfolio.
Transmission and distribution network projects: Infrastructure projects that deliver electricity from power plants to end users through high-voltage lines and substations.
Investor-owned utilities: Privately owned electric, gas, or water utilities that are operated for profit.
Independent power producers: Companies that generate electricity for sale to utilities or end users but are not utility companies themselves.
General contractors: Firms responsible for overseeing and managing construction projects, hiring subcontractors, and ensuring project completion.
Commercial/industrial wiring installations: Electrical systems installed in business or industrial facilities to provide power and lighting.
Competitive positioning: How a company differentiates itself and maintains an advantage over competitors in its industry.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lululemon Athletica Inc. The Motley Fool recommends MasTec. The Motley Fool has a disclosure policy.