On December 31, 2024, Chuck Royce (Trades, Portfolio), a renowned figure in small-cap investing, made a significant move by reducing the firm's position in EVI Industries Inc. Royce sold 118,731 shares at a price of $16.35, marking a 15.33% reduction in the firm's holdings of EVI. This transaction reflects a strategic adjustment in Royce's portfolio, which now holds 655,741 shares of EVI, representing 0.1% of the firm's overall portfolio and 4.61% of EVI's total shares. The decision to reduce the position in EVI Industries Inc. could be driven by various factors, including market conditions and the firm's investment strategy.

Chuck Royce (Trades, Portfolio): A Pioneer in Small-Cap Investing

Charles M. Royce is a distinguished name in the realm of small-cap investing. As the portfolio manager for Royce Pennsylvania Mutual Fund since 1972, Royce has built a reputation for identifying undervalued stocks with strong potential. The firm's investment philosophy centers on companies with robust balance sheets, a history of business success, and promising future profitability. Royce's approach involves investing in smaller companies, typically with market capitalizations up to $5 billion, although some funds may extend to $10 billion. This strategy has led to a diverse portfolio, with top holdings including SEI Investments Co (SEIC, Financial), Air Lease Corp (AL, Financial), and Enovis Corp (ENOV, Financial).

EVI Industries Inc.: A Snapshot

EVI Industries Inc. operates in the industrial distribution sector, providing a range of services including the sale, lease, and rental of commercial and industrial laundry and dry cleaning equipment. The company also offers installation and maintenance services across the United States, Canada, the Caribbean, and Latin America. With a market capitalization of $246.64 million, EVI Industries Inc. is a modestly undervalued stock, trading at a price of $17.33 against a [GF Value](https://www.gurufocus.com/term/gf-score/EVI) of $23.01. The company's [PE ratio](https://www.gurufocus.com/term/pe-ratio/EVI) stands at 35.37, and it boasts a [GF Score](https://www.gurufocus.com/term/gf-score/EVI) of 83/100, indicating good outperformance potential.

Impact of the Transaction on Royce's Portfolio

The reduction in EVI Industries Inc. shares has a minimal impact on Chuck Royce (Trades, Portfolio)'s overall portfolio, accounting for just 0.1% of the firm's holdings. However, it represents a more significant 4.61% of EVI's total shares. This strategic move may be influenced by EVI's current valuation and market performance. Despite the reduction, EVI's stock has gained 5.99% since the transaction, reflecting a positive market response. The decision to reduce the position could be part of a broader strategy to optimize the portfolio's performance and align with the firm's investment philosophy.

Financial Performance and Valuation of EVI Industries Inc.

EVI Industries Inc. demonstrates a solid financial foundation with a [Balance Sheet Rank](https://www.gurufocus.com/term/rank-balancesheet/EVI) of 7/10 and a [Profitability Rank](https://www.gurufocus.com/term/rank-profitability/EVI) of 8/10. The company's [Growth Rank](https://www.gurufocus.com/term/rank-growth/EVI) is also commendable at 7/10, supported by a 3-year revenue growth rate of 11.60% and an impressive earnings growth rate of 46.00%. EVI's [Operating Margin](https://www.gurufocus.com/term/operating-margin/EVI) growth of 15.50% further underscores its profitability potential. Despite these strengths, the firm's [Piotroski F-Score](https://www.gurufocus.com/term/fscore/EVI) of 6 and [Altman Z score](https://www.gurufocus.com/term/zscore/EVI) of 3.35 suggest a need for cautious optimism regarding its financial health.

Market Performance and Growth Prospects

Since its IPO in 1999, EVI Industries Inc. has experienced a remarkable 1,869.32% increase in stock price, reflecting its long-term growth potential. The company's year-to-date price change stands at 2.36%, indicating steady market performance. EVI's growth prospects are further bolstered by its strong revenue and earnings growth rates, positioning it as a promising investment for value investors. However, the [Momentum Rank](https://www.gurufocus.com/term/rank-momentum/EVI) of 3/10 suggests that investors should remain vigilant about potential market fluctuations.

Conclusion

Chuck Royce (Trades, Portfolio)'s recent transaction involving EVI Industries Inc. offers valuable insights into the firm's investment strategy and market outlook. The decision to reduce the position in EVI reflects a strategic adjustment aimed at optimizing portfolio performance. For value investors, EVI's current valuation and growth potential present an intriguing opportunity, albeit with some caution due to its financial and market dynamics. As always, investors should conduct thorough research and consider their risk tolerance before making investment decisions.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.