White Brook Capital Partners, an investment management firm, released its fourth-quarter 2023 investor letter. The same can be downloaded here. In 2023, the fund returned 8.38% compared to the Midcap 400 Index’s 16.45% and the S&P 500 Index’s 26.04% returns. The dominance of major tech companies fueled a 26% rise for the S&P 500 in 2023. The market surged in 2023 fueled by a robust economy and AI optimism. In addition, please check the fund’s top five holdings to know its best picks in 2023.
White Brook Capital featured stocks such as B. Riley Financial, Inc. (NASDAQ:RILY) in the fourth quarter 2023 investor letter. Headquartered in Los Angeles, California, B. Riley Financial, Inc. (NASDAQ:RILY) is a financial company that provides investment banking and financial services. On January 26, 2024, B. Riley Financial, Inc. (NASDAQ:RILY) stock closed at $19.85 per share. One-month return of B. Riley Financial, Inc. (NASDAQ:RILY) was -5.41%, and its shares lost 54.64% of their value over the last 52 weeks. B. Riley Financial, Inc. (NASDAQ:RILY) has a market capitalization of $607.223 million.
White Brook Capital stated the following regarding B. Riley Financial, Inc. (NASDAQ:RILY) in its fourth quarter 2023 investor letter:
“Finally, we continue to hold B. Riley Financial, Inc. (NASDAQ:RILY). B. Riley was a significant detractor from performance during 2023 as short-selling arguments were very publicly made throughout the year. The first short selling thesis questioned their deposit quality (they don’t take deposits) and the wisdom of their investment book (they’ve mostly worked out very well). They’ve more recently moved to allegations of fraud, questioning the veracity of Riley’s financial statements and the integrity of people the Firm has done business with without evidence that the company itself has committed wrongdoing. While I used to short stocks for a living, and there are short sellers I believe do great work and warrant a sell first, ask questions later philosophy, I believe this group’s analysis is mistaken and, in some cases, confused. I assign a low probability to the short sellers’ best arguments becoming true. However, even if they are, given the current share price, I believe the shares would still represent a compelling opportunity over time. Today, given the price of its publicly traded equity and debt, very high returns can be achieved by the company just by shrinking its principal investment business by letting outstanding loans to customers mature and paying down debt or buying back stock with the proceeds. They can win by doing nothing. Additionally, their base capital markets business, where they take minimal risk, is entering a period of enhanced potential opportunity as hundreds of billions of dollars of debt in Russell 2000 companies becomes due, providing Riley’s investment bank the opportunity to help companies arrange mergers and acquisitions or place equity, and firms trade. I like the risk-reward in RILY shares and look forward to a return measured in multiples of its current value.”
A man in a suit flipping through a stack of financial documents on a trading desk.
B. Riley Financial, Inc. (NASDAQ:RILY) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 16 hedge fund portfolios held B. Riley Financial, Inc. (NASDAQ:RILY) at the end of third quarter which was 14 in the previous quarter.
We discussed B. Riley Financial, Inc. (NASDAQ:RILY) in another article and shared Miller Value Partners Income Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q4 2023 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.
