Alta Fox Capital, an investment management firm, published its fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A commendable net return of 50.44% was recorded by the fund for the Q4 of 2020, outperforming its S&P 500 benchmark that returned 12.15%. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Alta Fox Capital, in their Q4 2020 Investor Letter said that they acquired a position in Collectors Universe, Inc. (NASDAQ: CLCT), and expects a positive return from the company. Collectors Universe, Inc. is a value-added services provider that currently has a $827 million market cap. For the past 3 months, CLCT delivered a decent 66.23% return and settled at $91.31 per share at the closing of January 29th.
Here is what Alta Fox Capital has to say about Collectors Universe, Inc. in their investor letter:
“In 2020 and very recently, we played the role of reluctant activist on two occasions. The first was related to our investment in Collectors Universe (CLCT). We began building our position in March of 2020 and bought most of our shares in the low to mid $20’s. Alta Fox first filed a 13D in June and settled with the company in September. The company then received a tender offer in November at $75.25. Alta Fox publicly filed for appraisal rights in December. The offer was recently revised at $92.00/share. Today we updated our 13D filing, as required by the SEC, to confirm our demand for appraisal rights at the updated offer price. We have conducted a tremendous amount of research on this investment and we are in no rush to relinquish our significant stake given the surging demand, growing backlog, and numerous attractive reinvestment opportunities. Alta Fox typically enjoys sharing our work with our dedicated investor following, but in this case, the vast majority of our research remains unseen, even by the Fund’s limited partners. The depth of the work we did on Collectors Universe sets an aspirational standard for work we will do in the future. We did many things right with this investment and learned a few first-time activist lessons, but overall, we are extremely proud of what we were able to accomplish thus far for our limited partners. Although this position was a significant contributor to the Fund’s performance in 2020 (and all of the SPV’s performance), its contribution represented less than a third of the Fund’s total return for the year. The story is not over.”
Pressmaster/Shutterstock.com
Last December 2020, we published an article telling that Collectors Universe, Inc. (NASDAQ: CLCT) was in 11 hedge fund portfolios, its all time high statistics. CLCT delivered an immense 271.78% return in the past 12 months.
Our calculations show that Collectors Universe, Inc. (NASDAQ: CLCT) does not belong in our list of the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
Video: Top 5 Stocks Among Hedge Funds
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website.
Disclosure: None. This article is originally published at Insider Monkey.
