Silver Beech Capital's Investment Thesis for Southwest Gas Holdings (SWX)

Silver Beech Capital, a value-oriented investment management firm, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. Since its inception, Silver Beech has achieved a net annualized return of 19.9%, representing an annualized outperformance of 6.9% over the S&P 500. The fund was up 0.3% for the second quarter, compared to the S&P 500’s 6.2% return and the Russell 2000’s 1.8% decline. The United States’ economic fundamentals remain strong, and financial markets are optimistic. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.

In its second-quarter 2025 investor letter, Silver Beech Capital highlighted stocks such as Southwest Gas Holdings, Inc. (NYSE:SWX). Southwest Gas Holdings, Inc. (NYSE:SWX) engages in the purchase, distribution, and transportation of natural gas for residential, commercial, and industrial customers. The one-month return of Southwest Gas Holdings, Inc. (NYSE:SWX) was -0.51%, and its shares gained 15.32% of their value over the last 52 weeks. On September 05, 2025, Southwest Gas Holdings, Inc. (NYSE:SWX) stock closed at $78.60 per share, with a market capitalization of $5.658 billion.

Silver Beech Capital stated the following regarding Southwest Gas Holdings, Inc. (NYSE:SWX) in its second quarter 2025 investor letter:

"Southwest Gas Holdings, Inc. (NYSE:SWX) is a mid-capitalization holding company with two segments: (i) Southwest Gas Corporation, a stable, regulated natural gas utility serving customers in Arizona, Nevada, and California, and (ii) a majority-owned stake in Centuri Holdings (NYSE: “CTRI”), a North American utility infrastructure services company.

Our investment thesis is centered on a straightforward premise: the true value of SWX’s core regulated utility business is currently obscured by Centuri’s consolidated financials, which are in the final stages of being simplified. As this simplification occurs over the coming quarters, we anticipate a significant re-rating of the company’s valuation, driven by several powerful catalysts..." (Click here to read the full text)

Southwest Gas Holdings, Inc. (NYSE:SWX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held Southwest Gas Holdings, Inc. (NYSE:SWX) at the end of the second quarter, which was 36 in the previous quarter. While we acknowledge the potential of Southwest Gas Holdings, Inc. (NYSE:SWX) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.