Black Bear Value Partners, an investment management firm, published its third-quarter 2024 investor letter. A copy of the letter can be downloaded here. Black Bear Value Fund returned 0.9% in September and +5.5% YTD and the S&P 500 returned +2.1% in September and +22.1% YTD. HFRI Value Index returned +1.1% in September and +9.4% YTD. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Black Bear Value Partners highlighted stocks like Arch Resources, Inc. (NYSE:ARCH), in the third quarter 2024 investor letter. Arch Resources, Inc. (NYSE:ARCH) engages in the production and sale of metallurgical products. The one-month return of Arch Resources, Inc. (NYSE:ARCH) was 13.90%, and its shares lost 8.12% of their value over the last 52 weeks. On October 9, 2024, Arch Resources, Inc. (NYSE:ARCH) stock closed at $142.01 per share with a market capitalization of $2.569 billion.
Black Bear Value Partners stated the following regarding Arch Resources, Inc. (NYSE:ARCH) in its Q3 2024 investor letter:
“Arch Resources, Inc. (NYSE:ARCH) and Warrior are 2 of the leading U.S. producers of high-quality metallurgical coal (“met coal”). This is the kind of coal used for steelmaking. ARCH also has a small thermal coal business that contributes ~20% of their earnings. CONSOL is a leading producer of thermal coal. During the 3rd quarter ARCH and CONSOL announced a merger which should close in the first half of 2025. I am generally constructive on the merger as the Companies should be able to realize some modest synergies. My sense is more mergers will be coming to this sector given the depressed prices of the securities.
Met coal demand is projected to climb for the next 25 years, driven by the economic development and urbanization in India and the rest of Southeast Asia. ~60% of the world’s population lives in Asia, where met coal demand is centered and where local sources are limited. Over the coming years demand will likely outstrip supply, leading to higher prices. There has been a severe lack of investment in met coal due to ESG concerns with investment peaking in 2014.”
A coal miner working in a surface mine, wearing a hard hat and carrying a pick.
Arch Resources, Inc. (NYSE:ARCH) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 38 hedge fund portfolios held Arch Resources, Inc. (NYSE:ARCH) at the end of the second quarter which was 38 in the previous quarter. While we acknowledge the potential of Arch Resources, Inc. (NYSE:ARCH) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Arch Resources, Inc. (NYSE:ARCH) and shared the list of best coal stocks to buy according to short sellers. In the Q2 2024 investor letter, Black Bear Value Partners elaborated on its valuation approach for Arch Resources, Inc. (NYSE:ARCH). In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.