ValueWalk is always looking for new ways to bring information and actionable information to its readers and other investors.
As part of this quest, we started Hidden Value Stocks, a quarterly newsletter with one goal: to find hidden value.
Each quarter, we speak with two value-oriented hedge funds and ask them for their top value ideas. Since inception, these ideas (28 in total, over two years) have generated an average return of 28%!
Welcome to our latest issue of ValueWalk’s hedge fund update. Below subscribers can find an excerpt in text and the full issue in PDF format. Please send us your feedback! Featuring investors exit long-short hedge funds, the oil market is now "broken", and Haidar Capital surges 225%. Q2 2022 hedge fund letters, conferences and more
The latest issue of the newsletter is coming out later this month, and as usual, it’s packed full of valuable ideas.
Our second interview is with Avenir Capital. Avenir uses a private market approach in public markets, looking for undervalued businesses that have a long-term strategy for wealth creation.
Avenir runs a high conviction strategy not constrained by global borders. Since inception, the Avenir Global Fund – Class I has achieved an annualized return for investors of 17.1%, and over the past five years, the fund has achieved an annualized gross return of 20.9%. In our interview, Avenir profiles two ideas, one company based in Asia and another from the US.
Below is a snippet from the interview in which Avenir discusses one of its highest conviction ideas based in the US.
Your second pick is [REDACTED]. This company has been on a strong run recently, so do you still see value in the shares?
[REDACTED] has taken some important steps over the past 18 months. The company has favourably put SEC litigation behind them, simplified the corporate structure and uplisted to the New York Stock exchange. This has led to the company rising 54% this year.
[REDACTED] listed 10% of the equity of the company’s wholly-owned subsidiary business on the NYSE. This is a positive development to help to further highlight the undervaluation..
Management took advantage of a favorable window of opportunity to list [Spinco] with the share prices of the major competitors…up 55% – 65% YTD. The comps now trade on trailing EBITDA multiples of 15.7x, 12.9x and 14.3x respectively, and [Spinco] trades around 8.4x or an almost 50% discount to the average multiple of competitors.
There is also roughly $1 per share of various real estate assets offset by a $0.40 per share of net debt at the holdco that are unrelated to [Spinco]. This gives a combined value of $14 per share for [REDACTED] compared to the current price…75% upside.
If this interests you, and you’d like to learn more about Avenir or the other funds profiled, click here to sign up to Hidden Value Stocks today.
Prices go up December 31st at 11:59PM EST!