Why This Fund Made a $56 Million Bet on a Stock Down 30% in the Past Year
Key Points
ADW Capital initiated a new stake in Driven Brands, buying 4,000,000 shares in the first quarter.
The quarter-end value of the position was $50.44 million.
This trade represented a 21.9% change in 13F reportable assets under management (AUM).
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On May 15, 2026, ADW Capital Management disclosed a new position in Driven Brands (NASDAQ:DRVN), acquiring four million shares in a trade estimated at $56.31 million based on quarterly average pricing.
What happened
According to a Securities and Exchange Commission (SEC) filing dated May 15, 2026, ADW Capital Management reported a new position in Driven Brands, acquiring 4,000,000 shares. The estimated value of the trade was approximately $56.31 million, calculated using the average closing price for the quarter. At quarter-end, the position was valued at $50.44 million, reflecting both the purchase and price movement.
What else to know
- Top five holdings after the filing:
- NYSE: APG: $60.06 million (26.2% of AUM)
- NASDAQ: DRVN: $50.44 million (22.0% of AUM)
- NYSE: GFL: $42.14 million (18.4% of AUM)
- NASDAQ: STGW: $31.45 million (13.7% of AUM)
- NYSE: CODI: $29.48 million (12.9% of AUM)
- As of May 14, 2026, Driven Brands shares were priced at $12.54, down nearly 30% over the past year and well underperforming the S&P 500, which is instead up about 25%.
Company overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $2.4 billion |
| Net income (TTM) | ($192.7 million) |
| Market capitalization | $2.1 billion |
| Price (as of market close May 14, 2026) | $12.54 |
Company snapshot
- Driven Brands offers automotive services including paint, collision repair, glass replacement, vehicle repair, car wash, oil change, and maintenance, as well as distribution of automotive parts and consumables.
- The firm operates through a mix of company-operated, franchised, and independently-operated stores, generating revenue from direct services, franchise fees, product distribution, and training services.
- It serves retail and commercial customers across the United States, Canada, and internationally, targeting both individual vehicle owners and automotive businesses.
Driven Brands leverages a diversified business model, combining direct operations with franchising and distribution to capture value across the automotive aftermarket. Scale, brand portfolio, and a broad service offering contribute to its competitive position in the consumer cyclical sector.
What this transaction means for investors
ADW seems to be making a contrarian bet here on a pretty badly beaten stock. Driven Brands shares have tanked during a tough year marked by accounting restatements and asset sales. But taking a step back, there are reasons to see value. The company exited 2025 with revenue up 6% to $1.86 billion, while adjusted EBITDA climbed to $449 million. Its Take 5 oil change business continues to be a standout, posting 6.2% same-store sales growth for the year and delivering its 22nd consecutive quarter of same-store sales growth. Driven also generated $331 million in operating cash flow and used proceeds from the sale of its international car wash business to reduce debt, improving pro forma leverage to 3.3 times adjusted EBITDA.
The accounting restatement is the obvious risk, but management emphasized that the corrections were not “a result of any substantive change to the Company’s operations or business performance.” Meanwhile, 2026 guidance calls for revenue of roughly $1.95 billion to $2.05 billion and up to $145 million in free cash flow.
So what does this all mean for long-term investors? Ultimately, if Driven can keep growing Take 5, delever the balance sheet, and restore credibility after the restatement, today's valuation may look much more attractive in hindsight than the market currently believes.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends APi Group. The Motley Fool recommends GFL Environmental. The Motley Fool has a disclosure policy.
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