Last year, a little-known value fund called Dane Capital produced a return for its investors of 50.2% net of fees and expenses by investing in unloved small-cap stocks.
Philip Carret was an investor and founder of Pioneer Fund, one of the first mutual funds in the United States. Carret ran the mutual fund for 55 years, during which time an investment of $10,000 became $8 million. That suggests he achieved a compound annual return of nearly 13% for his investors. Q1 2021 hedge Read More
Founded by Eric Gomberg, Dane has a mandate to seek out hidden value, wherever it can be found. The firm’s returns are testament to its successful execution of this strategy.
At the end of last year, we interviewed Eric for our exclusive value newsletter Hidden Value Stocks to get his thoughts on the market, and where he’s finding value today.
And he’s just released another idea, a newly public renewables focused E&C company with a compelling valuation 3.8x 2018 EV/EBITDA and a free cash flow yield of around 25% and record backlog.
Here’s a snippet of Eric’s thesis:
“XXX currently trades in excess of a 4x EBITDA turns discount to comparables despite higher margins than peers. At a peer multiple in excess of 7.0x EV/EBITDA based on 2018 EBITDA of $88mn, which includes the benefits from working on projects previously outsourced but excludes any potential future acquisitions, shares would be worth close to $16, representing a ~80% upside. Should management successfully execute, we think acquisitions can bring 2018 EBITDA to ~$113mn, and a 7.0x EV/EBITDA would imply shares nearing $17, or a ~90% return.”
To find out more about this idea, as well as the ideas Eric originally profiled, and many more stock picks from other value investors, all you need to do is head over to hiddenvaluestocks.com and sign up today.
Hidden Value Stocks is a quarterly publication which profiles two hedge funds in each issue. So far, ideas profiled have produced a total return for investors of over 50% (compared to the Russell 2000 value benchmark return of 40% over the same period) with an average return of 25%.
Each manager profiles two stocks which they believe are the most undervalued opportunities in today's market. We let the managers choose what companies they want to profile with two requirements: they have to be cheap and fly under the radar.
Each newsletter subscriber not only receives a detailed investment thesis on each idea, but we also provide direct access to the funds profiled as well as their quarterly updates.