Desert Lion Capital, an investment management firm, published its third-quarter 2021 investor letter – a copy of which can be downloaded here. A net return of -9.9% was delivered by the fund for the third quarter of 2021. Desert Lion Capital’s horizon is longer than average, and the portfolio turnover is fairly low at less than 20% per annum. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Desert Lion Capital, in its Q3 2021 investor letter, mentioned Sibanye Stillwater Limited (NYSE: SBSW) and discussed its stance on the firm. Sibanye Stillwater Limited is a South Africa-based gold mining company with an $8.7 billion market capitalization. SBSW delivered a -21.52% return since the beginning of the year, while its 12-month returns are down by -20.78%. The stock closed at $12.47 per share on December 28, 2021.
Here is what Desert Lion Capital has to say about Sibanye Stillwater Limited in its Q3 2021 investor letter:
“Sibanye Stillwater is one of the largest PGM (platinum group metal) producers in the world with major operations in South Africa and the U.S. They also have gold mining operations in SA. There is significant upside optionality in their growing lithium, nickel, and uranium activities, which are not yet contributing to earnings and not recognized by the market in SSW’s price.
During the third quarter, the company reported record earnings for the interim period ended June 2021. TTM EPS was R12.03, placing the stock on a PE multiple of 4. Cash generation was excellent, and the company is effectively debt free with surplus net cash. The management team continues to stay disciplined in their capital allocation, using cash profits to settle debt, repurchase 5% of the company’s shares at a discount, pay a healthy dividend (~11% annualized dividend yield), and expand their battery metals strategy with lithium and nickel acquisitions… (Click here to see the full text)
..Sibanye Stillwater is a well-managed, profitable business with excellent capital allocation discipline. I view it as a dividend-paying call option on the normalization of auto manufacturing, climate change initiatives, and inflation. The company’s lithium, nickel, and uranium activities also position them to participate in the continued drive towards “cleaner” energy, and so far, these options are not priced in at all.”
Photo by Ricardo Gomez Angel on Unsplash
Based on our calculations, Sibanye Stillwater Limited (NYSE: SBSW) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. SBSW was in 9 hedge fund portfolios at the end of the third quarter of 2021, compared to 15 funds in the previous quarter. Sibanye Stillwater Limited (NYSE: SBSW) delivered a -4.90% return in the past 3 months.
Earlier this year, we published an article that includes EXC in the 10 Dividend Stocks to Buy According to Billionaire Steve Cohen. You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q3 page.
Disclosure: None. This article is originally published at Insider Monkey.
