Perimeter Solutions Stock Up 111% but One Fund Trimmed Its $35 Million Stake
Key Points
Massachusetts-based East Coast Asset Management sold 497,847 shares of Perimeter Solutions in the third quarter.
The position value fell by $6.40 million from the previous period.
As of September 30, the fund reported holding nearly 1.6 million shares of Perimeter Solutions valued at $35.24 million.
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Massachusetts-based East Coast Asset Management cut its stake in Perimeter Solutions (NYSE:PRM) by 497,847 shares, reducing its position by an estimated $6.40 million, according to a November 14 SEC filing.
What Happened
According to an SEC filing dated November 14, East Coast Asset Management reduced its holdings in Perimeter Solutions (NYSE:PRM) by 497,847 shares during the third quarter. The remaining stake totaled nearly 1.6 million shares worth $35.24 million as of September 30. The transaction accounted for 2.96% of the fund’s $319.18 million in reportable U.S. equity assets across 68 positions.
What Else to Know
The fund’s Perimeter Solutions position, after the reduction, is 11.04% of 13F assets and ranks as its second-largest holding.
Top holdings after the filing:
- NASDAQ: GOOGL: $50.07 million (15.7% of AUM)
- NYSE: PRM: $35.24 million (11.0% of AUM)
- NYSE: TDG: $30.83 million (9.7% of AUM)
- NASDAQ: META: $30.75 million (9.6% of AUM)
- NASDAQ: TSLA: $30,428,632 (9.53% of AUM)
As of Friday, shares of Perimeter Solutions were priced at $28.08, up a staggering 111% over the past year and vastly outperforming the S&P 500, which is up 15% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Price (as of Friday) | $28.08 |
| Market Capitalization | $4.15 billion |
| Revenue (TTM) | $636.34 million |
| Net Income (TTM) | $78.03 million |
Company Snapshot
- Perimeter Solutions offers fire retardants, firefighting foams, and lubricant additives under brands such as PHOS-CHEK, FIRE-TROL, AUXQUIMIA, SOLBERG, and BIOGEMA.
- The company generates revenue primarily through the Fire Safety and Oil Additives segments, supplying products and related services to industrial and government clients.
- It serves federal, state, provincial, municipal, and commercial customers in the United States, Germany, and internationally.
Perimeter Solutions, Inc. is a specialty chemicals company with a focus on fire safety and lubricant additives, operating at scale with a global customer base. The company leverages its established brands and technical expertise to address critical safety and industrial needs, supporting both public agencies and commercial enterprises. Its diversified product portfolio and international reach provide a competitive edge in the specialty chemicals sector.
Foolish Take
Amid a staggering stock run, Perimeter Solutions had quietly grown into an outsized position. Even after trimming roughly $6 million worth of stock, it still represents 11% of the portfolio and remains the fund’s second-largest holding. That’s not a retreat. That’s risk management.
Operationally, the business continues to fire. Third-quarter revenue rose 9% year over year to $315.4 million, while adjusted EBITDA climbed 9% to $186.3 million, driven by strength in Fire Safety products, where segment EBITDA jumped 13%. Year-to-date adjusted EBITDA is up 20%, and adjusted EPS for the quarter came in at $0.82, up from $0.75 a year earlier.
After a rally like this, trimming a portion helps rebalance exposure without abandoning the thesis. Basically, the fund didn’t exit. It recalibrated. For long-term investors, that’s the takeaway. Selling a bit after a big win doesn’t mean you’re wrong. In fact, it can just be that you were right all along.
Glossary
13F reportable assets: U.S. equity securities that institutional investment managers must disclose quarterly to the Securities and Exchange Commission (SEC) in Form 13F.
Assets under management (AUM): The total market value of investments managed by a fund or investment firm.
Position: The amount of a particular security or asset held in a portfolio.
Trailing 12-month (TTM): The 12-month period ending with the most recent quarterly report.
Forward price-to-earnings ratio: A valuation metric comparing a company’s current share price to its forecasted earnings per share.
Enterprise value/EBITDA: A valuation ratio comparing a company’s total value to its earnings before interest, taxes, depreciation, and amortization.
52-week high: The highest price at which a security has traded during the past year.
Stake: The ownership interest or amount of shares held in a company by an investor or fund.
Specialty chemicals: Chemical products designed for specific applications, often serving niche industrial or commercial needs.
Fire retardants: Substances used to slow or stop the spread of fire.
Lubricant additives: Chemicals added to lubricants to enhance performance or provide specific properties.
Outperforming the S&P 500: Achieving a higher return than the S&P 500 index over a given period.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Meta Platforms, and Tesla. The Motley Fool recommends TransDigm Group. The Motley Fool has a disclosure policy.
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