On March 31, 2025, Chuck Royce (Trades, Portfolio), a renowned figure in the investment world, executed a significant stock transaction involving EVI Industries Inc. The transaction saw the addition of 50,894 shares at a price of $16.78 per share, bringing Royce's total holdings in EVI Industries to 706,635 shares. This move reflects a 7.76% increase in the firm's holdings of the company, indicating a strategic decision to bolster its position in the industrial distribution sector.

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

Charles M. Royce is celebrated as a pioneer in small-cap investing, having managed the Royce Pennsylvania Mutual Fund since 1972. The firm's investment philosophy is centered on identifying smaller companies with strong balance sheets, a proven track record, and the potential for future profitability. Royce's approach involves seeking out stocks trading below their estimated enterprise value, focusing on companies with market capitalizations up to $5 billion, and occasionally up to $10 billion. This disciplined strategy has positioned Royce as a respected figure in the investment community.

Understanding EVI Industries Inc

EVI Industries Inc operates as a distributor of commercial and industrial laundry and dry cleaning equipment across the USA, Canada, the Caribbean, and Latin America. With a market capitalization of $209.065 million, the company is a key player in the Industrial Distribution industry. EVI Industries provides a comprehensive range of services, including equipment sales, leasing, and maintenance, catering to a diverse clientele that spans commercial, industrial, institutional, government, and retail sectors.

Transaction Details and Portfolio Impact

The addition of EVI Industries shares resulted in a 0.01 impact on Royce's portfolio, with the company now representing 0.11% of the total portfolio. This strategic acquisition aligns with Royce's investment philosophy of seeking undervalued stocks with strong fundamentals. The firm's increased stake in EVI Industries underscores confidence in the company's potential for growth and profitability within the industrial distribution sector.

Financial Metrics and Valuation of EVI Industries

Currently trading at $16.39, EVI Industries has a price-to-earnings (PE) ratio of 34.87 and a [GF Value](https://www.gurufocus.com/term/gf-score/EVI) of $22.50, indicating it is modestly undervalued. The stock boasts a [GF Score](https://www.gurufocus.com/term/gf-score/EVI) of 87/100, suggesting good outperformance potential. Additionally, the company has a [Balance Sheet Rank](https://www.gurufocus.com/term/rank-balancesheet/EVI) of 7/10, reflecting its solid financial standing.

Performance and Growth Indicators

EVI Industries has demonstrated impressive growth metrics, with a 46% earnings growth over the past three years and a revenue growth rate of 11.60%. The company's [Profitability Rank](https://www.gurufocus.com/term/rank-profitability/EVI) is 8/10, supported by a gross margin growth of 6.00% and an [Operating Margin](https://www.gurufocus.com/term/operating-margin/EVI) growth of 15.50%. These indicators highlight the company's robust performance and potential for continued success.

Market and Industry Context

Despite a -2.32% price change since the transaction and a -3.19% year-to-date change, EVI Industries remains a significant player in its sector. Operating in a single segment, the company has a cash to debt ratio of 0.11 and an [interest coverage](https://www.gurufocus.com/term/interest-coverage/EVI) of 5.84, reflecting its ability to manage financial obligations effectively. The [Altman Z score](https://www.gurufocus.com/term/zscore/EVI) of 3.18 further underscores the company's financial health.

Conclusion: Strategic Confidence in EVI Industries

Chuck Royce (Trades, Portfolio)'s decision to increase holdings in EVI Industries aligns with the firm's investment philosophy of identifying undervalued stocks with strong fundamentals. This transaction reflects a strategic confidence in EVI Industries' potential for future growth and profitability within the industrial distribution sector. As the company continues to demonstrate robust performance metrics, it remains a compelling investment opportunity for those seeking exposure to this dynamic industry.

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.