Seven Corners Capital, an investment management company, released its Q3 2024 investor letter. A copy of the letter can be downloaded here. Seven Corners Capital’s composite portfolio finished Q3 2024 increasing around 14%, while the S&P 500 increased by approximately 21%. This represents a 7% underperformance in the first half of the year. Since 2020 (on a “Pandemic stacked basis”), the SCC Composite Portfolio has increased by ~127% compared to ~79% for the S&P 500, including all dividends received. This is an outperformance of 4,800 basis points compared to the index. In addition, you can check the fund’s top 5 holdings to know its best picks in 2024.
Seven Corners Capital highlighted stocks like Turning Point Brands, Inc. (NYSE:TPB) in the third quarter 2024 investor letter. Headquartered in Louisville, Kentucky, Turning Point Brands, Inc. (NYSE:TPB) manufactures, markets, and distributes branded consumer products. The one-month return of Turning Point Brands, Inc. (NYSE:TPB) was 14.22%, and its shares gained 158.94% of their value over the last 52 weeks. On December 9, 2024, Turning Point Brands, Inc. (NYSE:TPB) stock closed at $62.82 per share with a market capitalization of $1.112 billion.
Seven Corners Capital stated the following regarding Turning Point Brands, Inc. (NYSE:TPB) in its Q3 2024 investor letter:
“Turning Point Brands, Inc. (NYSE:TPB), up 65% YTD in 2024, is an old standby in the SCC portfolio, having originally been purchased back in Q3 of 2016 (via SCC’s investment in Standard Diversified [SDI], which then owned a majority stake in TPB and subsequently merged into TPB in mid-2020). The investment thesis remains that the company enjoys the benefit of a steady compounding business model via its Zig-Zag and Stoker’s brands (the waters have recently been muddied by the struggles of its NewGen brands segment, which is now a de minimis portion of the overall pie at TPB).
In my opinion, the company could become the target of one or more activist investors, with the thesis possibly involving (A) the separation of TPB’s legacy cashflowing business (i.e., its Stoker’s MST / chewing tobacco and Zig Zag rolling paper businesses) from its perpetually struggling “New Gen” vaping business and/or (B) a substantial increase in the dividend along with a consequent decrease in TPB’s practice of taking equity stakes in other companies.”
A worker athlete with a rolling paper held in hand, smoking from the finished cigar.
Turning Point Brands, Inc. (NYSE:TPB) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held Turning Point Brands, Inc. (NYSE:TPB) at the end of the third quarter which was 21 in the previous quarter. In the third quarter, Turning Point Brands, Inc.’s (NYSE:TPB) sales were up 3.8% year-over-year to $105.6 million. While we acknowledge the potential of Turning Point Brands, Inc. (NYSE:TPB) 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 Turning Point Brands, Inc. (NYSE:TPB) and shared Meridian Small Cap Growth Fund’s views on the company. 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.