Do you think Verra Mobility Corporation (VRRM) is an attractive investment?

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Tourlite Capital Management, an investment management firm, has released its third quarter 2022 letter to investors. A copy of it can be downloaded here. In the third quarter, Tourlite Fund Founder Class returned -2.8%, compared to -4.9% for the S&P 500 Index. Since inception in April 2022, the fund has returned 1.6% , compared to a return of -20.2% for the S&P 500 index. Macroeconomic factors affected the fund’s performance during the quarter. Additionally, you can check out the fund’s top 5 holdings for its top picks in 2022.

Tourlite Capital Management discussed stocks like Verra Mobility Corporation (NASDAQ:VRRM) in the Q3 2022 Letter to Investors. Mesa, Arizona-based Verra Mobility Corporation (NASDAQ: VRRM) is a provider of mobility technology solutions. On October 19, 2022, Verra Mobility Corporation (NASDAQ:VRRM) stock closed at $16.15 per share. Verra Mobility Corporation’s (NASDAQ:VRRM) one-month return was 2.34% and its shares have gained 8.10% of their value over the past 52 weeks. Verra Mobility Corporation (NASDAQ: VRRM) has a market capitalization of $2.474 billion.

Here is what Tourlite Capital Management specifically said about Verra Mobility Corporation (NASDAQ:VRRM) in its Q3 2022 Letter to Investors:

Mobility company Verra (NASDAQ: VRRM) is a leader in transportation technology. The company has three segments: commercial, government and parking. The commercial and government segments account for more than 85% of revenues. Verra is an attractive business with mid- to high-single digit revenue growth and sustainable competitive advantages.

Commercial Services provides tolling and violation management services for commercial fleets (i.e. rental cars). Verra is integrated with toll authorities and shares its revenue with rental car operators. Business should benefit from two key tailwinds, including the continued shift from cash to cashless tolls and the conversion of highways to toll roads. Currently around 65% of toll booths are cashless and this figure is expected to rise to over 80% in the next few years. Verra is heavily integrated into the car rental system with long-term contracts and technology that would be expensive to replicate.

The Government segment offers solutions for cities and school districts, including the application of red light, speed and bus lane cameras. Most of these relationships are revenue sharing and Verra retains ownership of the hardware/cameras. Future growth will come from expanding offerings to states where current enforcement is limited (i.e., only have red light cameras) and penetration into the 17 states without enforcement. Photo.

Based on our projections for 2023, Verra is trading at over 7.5% yield on free cash flow.”

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Copyright: hywards / 123RF Stock Photo

Verra Mobility Corporation (NASDAQ:VRRM) is not on our list of 30 most popular stocks among hedge funds. According to our database, 24 hedge fund portfolios held Verra Mobility Corporation (NASDAQ:VRRM) at the end of the second quarter, up from 30 in the prior quarter.

We discussed Verra Mobility Corporation (NASDAQ:VRRM) in another article and shared the list of companies that have recently raised their orientations. Additionally, please see our Letters to Hedge Fund Investors Q3 2022 page for more letters from hedge fund investors and other leading investors.

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Disclosure: none. This article originally appeared on Insider Monkey.

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