Marcelo Zinn, Maredin Capital Advisors: Maredin Capital Advisors Investor Letter
Editor’s note: Below is a brief intro about the fund, a portion about Maredin Capital Advisors and then a link to their latest letter where they discuss among other things why they are long Mannkind Corporation (NASDAQ:MNKD) .
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About Maredin: Maredin Capital Advisors, founded by Marcelo Zinn in 2005, is an Investment Management Company based in Miami, Florida, which focuses on long-term value investing in US centric equities and debt. Maredin’s primary responsibilities are the day-to-day management of the Zinn Fund Partnership (US Clients) and Astra Frontline Fund (non-US clients only). The Zinn Fund Partnership and Astra Frontline Fund are mirrored portfolios.
Maredin Capital Advisors Investor Letter
Marcelo Zinn, General Partner
June 24, 2014
Below is the preliminary first half 2014 report. Since this report only provides preliminary results, there may be a difference between the preliminary and actual mid-year results (NAV) calculated on June 30th.
Included in this report are our current and historical results, a review of our portfolio, and our perspective on the current economy and investment environment. We hope this will help provide more insight into our thought process and assist in any future capital allocation decisions you may have. On a separate, but interesting note, we will have an exciting announcement for all investors in August. A teaser: we are creating an investment vehicle (called “Paragon”) we can offer all investors, not only those who are “accredited” (net worth above $1M). Paragon will facilitate anyone who wishes to participate in the same philosophy and investments that investors in the Partnership have enjoyed for nearly 5 ½ years.
Our reason for creating Paragon is our long-held desire to assist anyone with navigating the investing landscape. We are very excited with this vehicle as we believe our competitive advantages can make a real difference for individual investors. I will be sending out an email detailing Paragon soon. If you would like to learn more, email me and I will put you on the list for the official announcement.
Maredin Capital on long Mannkind Corporation (NASDAQ:MNKD) position
First half performance was a combination of positive results in Mannkind Corporation (“MNKD”) – a company we have been researching and investing in for well over 6 years, as well as gains in our overall portfolio.
As we discussed we have a considerable position in MannKind Corp. The reason is rather straight-forward: it possesses all the key ingredients of a great investment. For starters, the company has a great CEO in Dr. Alfred Mann. Second, their main product, Afrezza, is pioneering a new class of “ultra-rapid” insulin treatment that will revolutionize diabetes therapy worldwide. Third, the company
has two other drugs in their pipeline as well as a delivery combo device called Technosphere that alone could be worth multiples of the current stock price. Fourth, the price doesn’t properly reflect our
estimate of intrinsic value, which is why we see a significant investment opportunity.
Excluding MannKind, we had success in several positions including a few new ones. Most notably would be Amazon.com, a company we believe has significant runway. Everyone is familiar with Amazon Corporation (NASDAQ:AMZN). Remarkably however, our analysis concludes that it remains considerably undervalued long-term as most investors and analysts are underestimating their true earnings power. Many analysts have actually become bearish on their future outlook. Their reasoning is based on poor short-term clarity in gauging earnings power. Several analysts want Amazon to focus on current earnings (wrong decision long term) instead of being laser focused on future earnings (correct decision). Amazon has correctly chosen to focus on the long-term.
Maredin Capital Advisors Investor Letter via Harvest