William Blair Small Cap Growth Fund on Garrett Motion
Thesis
Garrett Motion is benefiting from hybrid and internal combustion vehicle demand that has proved more durable than the market had priced. Commercial vehicle and industrial sales were supported by regional expansion and strong aftermarket demand. Management raised its full-year outlook and continued share buybacks, providing further support to the operating thesis. The fund reduced the position after the stock's strong re-rating rather than because of a deterioration in the business.
“demand for hybrid and internal combustion engine (ICE) vehicles proved more durable than what had previously been priced into the stock”
Key risks
- Strong stock re-rating reduced risk/reward attractiveness