Why This Fund Trimmed a $28 Million Resideo Stake Despite a Booming Stock Rally
Key Points
New York City-based BeaconLight Capital sold 175,624 shares of Resideo Technologies in the third quarter.
Despite the sale, the position value still increased by about $9.75 million from the previous period due to REZI's surging shares.
As of September 30, the fund reported holding 645,028 REZI shares valued at $27.85 million, making it the fund's largest position by value.
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On November 14, New York City-based BeaconLight Capital disclosed in a U.S. Securities and Exchange Commission filing that it reduced its stake in Resideo Technologies (NYSE:REZI) by about 176,000 shares.
What Happened
BeaconLight Capital reported a reduction of 175,624 shares in Resideo Technologies (NYSE:REZI) during the third quarter, according to a Form 13-F filed with the U.S. Securities and Exchange Commission on November 14. The fund's remaining 645,028 shares were valued at $27.85 million at quarter-end, representing 13.74% of its $202.73 million in reportable U.S. equity assets.
What Else to Know
Following the sale, REZI remained BeaconLight's largest position at 13.74% of AUM. The position was previously 10.33% of the fund's AUM.
Top holdings after the filing:
- NYSE:REZI: $27.85 million (13.74% of AUM)
- NYSE:CSTM: $18.95 million (9.35% of AUM)
- NYSE:LNG: $14.13 million (6.97% of AUM)
- NYSE:SXT: $10.72 million (5.29% of AUM)
- NYSE:TECK: $10.26 million (5.06% of AUM)
As of Friday, REZI shares were priced at $35.99, up 48% over the past year and well outperforming the S&P 500, which is up 15% in the same period.
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $7.44 billion |
| Net Income (TTM) | $640.00 million |
| Price (as of Friday) | $35.99 |
| One-Year Price Change | 48% |
Company Snapshot
- Resideo Technologies offers comfort, thermal, and security solutions, including temperature and humidity controls, security panels, sensors, and smart home products under the Honeywell Home brand.
- The company operates through Products & Solutions and ADI Global Distribution segments, generating revenue from product sales and distribution to commercial and residential markets.
- It serves contractors, original equipment manufacturers, service providers, and retail/online channels targeting residential and non-residential end-users globally.
Resideo Technologies, Inc. is a leading provider of residential comfort and security solutions with a global footprint and a diverse product portfolio. The company leverages its established distribution network and recognized brands to address the evolving needs of both commercial and residential customers. Its strategic focus on integrated smart home and security technologies positions it competitively within the building products and protection services sector.
Foolish Take
Resideo just posted one of its strongest quarters ever, with record net income of $156 million (up a staggering 680% year over year), record adjusted EBITDA of $229 million (up 21%), and gross margins pushing nearly 30%. Both operating segments expanded margins again, extending a multi-quarter streak that speaks to real execution rather than one-off cost cuts.
Against that backdrop, trimming a position doesn’t read as a loss of conviction. In fact, Resideo remains the fund’s largest holding, even after the reduction, which suggests portfolio discipline rather than a changed thesis. Locking in gains amid a staggering run while keeping a double-digit allocation is often how long-term investors rebalance risk, especially when a single stock grows faster than the rest of the portfolio.
The broader context matters too. This portfolio is concentrated in industrials, materials, and infrastructure-linked names, and Resideo fits neatly alongside those holdings as a cash-generating, asset-heavy business tied to essential housing and safety systems. With management guiding to up to $832 million in full-year adjusted EBITDA and a planned business separation ahead, the story looks less about timing the top and more about managing exposure as the investment matures.
Glossary
13F reportable AUM: Assets under management that must be disclosed in quarterly SEC Form 13F filings by institutional investment managers.
Stake: The ownership interest or number of shares held by an investor in a company.
Form 13-F: A quarterly SEC filing by institutional investment managers listing their equity holdings.
AUM (Assets Under Management): The total market value of investments managed on behalf of clients by a fund or firm.
Position: The amount of a particular security or asset held in a portfolio.
Outperforming: Achieving better returns compared to a benchmark or index over a specific period.
TTM: The 12-month period ending with the most recent quarterly report.
Distribution (in context): The process of supplying products to various customers, retailers, or markets.
Segment: A distinct business unit or division within a company, often with separate products or markets.
Original Equipment Manufacturer (OEM): A company that produces parts or equipment used in another company's end products.
Smart home products: Devices and systems that automate or remotely control home functions, often using internet connectivity.
Building products sector: The industry segment focused on manufacturing and supplying materials and technologies for construction and property improvement.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cheniere Energy. The Motley Fool recommends Teck Resources. The Motley Fool has a disclosure policy.
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