SRK Capital, an investment management firm, published its second-quarter 2022 investor letter – a copy of which can be downloaded here. SRK Fund I, LP declined by -17.57% during the first half of 2022. In contrast, the S&P 500 and the Russell 2000 declined by -19.96% and -23.44%, respectively. Since its inception, the Fund has appreciated 400.88% compared to 53.93% for the S&P 500 and 16.75% for the Russell 2000. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, SRK Capital mentioned GEE Group, Inc. (NYSE:JOB) and explained its insights for the company. Founded in 1893, GEE Group, Inc. (NYSE:JOB) is an Oakbrook Terrace, Illinois-based multi-brand national staffing and recruiting firm with an $80.7 billion market capitalization. GEE Group, Inc. (NYSE:JOB) delivered a 24.12% return since the beginning of the year, while its 12-month returns are up by 44.01%. The stock closed at $0.70 per share on August 26, 2022.
Here is what SRK Capital has to say about GEE Group, Inc. (NYSE:JOB) n its Q2 2022 investor letter:
“Gee Group is a position that was initiated during Q4 of 2021 and has been added to selectively this year. The company completely transformed its capital structure during 2021 by eliminating $127 million of debt from its balance sheet, and now sits with net cash and zero debt. Gee Group is a staffing company with a focus on contract staffing in the professional sector (IT, Finance, Accounting, etc.). With a recapitalized capital structure, the current valuation of the company 1s less than 4x EBITDA on LTM numbers. The company put themselves in a difficult financial position due to their acquisition strategy through the use of high-cost debt. During 2020 and 2021 their stock was the subject of several pump and dump schemes, which the company used to raise capital on very favorable terms. Management has stated they are focused on profitability, free cash flow, and putting their debt laden acquisition strategy behind them. They have also stated that a stock buyback makes sense at the valuation the stock 1s currently trading at, but due to the forgiveness of their remaining PPP loans in December 2021 they are not able to start repurchasing shares until December of this year. Their business has benefited from the tight labor market. With the economy continuing to add jobs the company could potentially double the amount of cash on their balance sheet by years end, providing plenty of ammo for share repurchases.”
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Our calculations show that GEE Group, Inc. (NYSE:JOB) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. GEE Group, Inc. (NYSE:JOB) was in 4 hedge fund portfolios at the end of the second quarter of 2022, compared to 6 funds in the previous quarter. GEE Group, Inc. (NYSE:JOB) delivered a 19.43% return in the past 3 months. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.
Disclosure: None. This article is originally published at Insider Monkey.
