Alluvial Capital Management: “Poor TIM”

Alluvial Capital Management, an investment management firm, published its second-quarter 2022 investor letter – a copy of which can be downloaded here. Alluvial Fund declined 9.9% in the second quarter and is down 16.5% year-to-date. By contrast, the Russell Microcap Index lost 19.0% this quarter and has fallen 25.1% in 2022. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Alluvial Capital Management mentioned TIM S.A. (NYSE:TIMB) and explained its insights for the company. Founded in 1987, TIM S.A. (NYSE:TIMB) is a Poland-based electrical materials distributor with a $5.7 billion market capitalization. TIM S.A. (NYSE:TIMB) delivered a 1.20% return since the beginning of the year, while its 12-month returns are up by 3.97%. The stock closed at $11.78 per share on July 27, 2022.

Here is what Alluvial Capital Management has to say about TIM S.A. (NYSE:TIMB) in its Q2 2022 investor letter:

“Poor TIM. Despite continued excellent results, shares have been trashed as the Polish construction market slows. The market now values TIM at just 4x my estimate of operating income as of June 30. Citing poor market conditions, the company announced it would delay the planned IPO of its e-commerce logistics company 3PL. TIM has gone from “very cheap” to “wildly cheap” this year. The market is too focused on near-term headwinds in TIM’s electronic components distribution business and is missing the continued growth and huge market opportunity at 3PL. Management apparently agrees and has announced a repurchase plan covering 14% of TIM’s shares outstanding. With Polish investors as morose as they have been in years, it could take time for TIM shares to rebound. But the market cannot ignore TIM’s profitability and growth forever.”

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Our calculations show that TIM S.A. (NYSE:TIMB) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. TIM S.A. (NYSE:TIMB) was in 12 hedge fund portfolios at the end of the second quarter of 2022, compared to 10 funds in the previous quarter. TIM S.A. (NYSE:TIMB) delivered a -14.95% return in the past 3 months.

In October 2021, we published an article that includes TIM S.A. (NYSE:TIMB) in 11 Best High Dividend Stocks Under $50. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

Disclosure: None. This article is originally published at Insider Monkey.