Black Bear Value Partners, an investment management firm, published its first quarter 2023 investor letter, a copy of which can be downloaded here. Black Bear Value Fund returned +0.8% in March and +2.9% YTD, at the same time the S&P 500 returned +3.7% and +7.5% and the HFRI Index returned +1.2% and +4.5% in March and YTD, respectively. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Black Bear Value Partners highlighted stocks like Civeo Corporation (NYSE:CVEO) in the first quarter 2023 investor letter. Headquartered in Houston, Texas, Civeo Corporation (NYSE:CVEO) is a hospitality service-providing company to the natural resource industry. On July 3, 2023, Civeo Corporation (NYSE:CVEO) stock closed at $19.36 per share. One-month return of Civeo Corporation (NYSE:CVEO) was -2.57%, and its shares lost 24.32% of their value over the last 52 weeks. Civeo Corporation (NYSE:CVEO) has a market capitalization of $291.356 million.
Black Bear Value Partners made the following comment about Civeo Corporation (NYSE:CVEO) in its first quarter 2023 investor letter:
“We have a large investment across the energy & commodity spaces. The thesis is simple…we haven’t developed enough energy or commodity resources to satisfy the near- and medium-term needs of the world as well as provide for a renewable/less-carbon intensive future.
Civeo Corporation (NYSE:CVEO) is a workforce housing company (mining and energy sector) for those who are living/working away from home in more remote locations. They provide lodging, food services, housekeeping and property maintenance in Canada, Australia and the United States.
CVEO went through a brutal stretch during COVID yet still generated the equivalent of 12% of its market-cap in cash in a lousy year. In the coming years this business could be worth 2-3x where it’s priced now as more development is needed in their end markets. It’s hard to predict any given year of this business but they should be able to earn $3-$5 in cash in most years which equates to 15-24% free cash flow yield.
Paramount is an ENP (exploration and production) in the energy space. It has no debt and ~$660MM in cash/securities (15% of the mkt cap). Management is fully aligned with us as they own 47% of the Company.
Over the next 2 years the company should generate ~9-10% in annual free-cash flow presuming fairly bearish energy prices. I tend to believe this is on the lower end as China reopens and the lack of worldwide energy developments becomes more pronounced.”
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Civeo Corporation (NYSE:CVEO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 10 hedge fund portfolios held Civeo Corporation (NYSE:CVEO) at the end of first quarter 2023 which was 9 in the previous quarter.
We discussed Civeo Corporation (NYSE:CVEO) in another article and shared Horizon Kinetics’ views on the company. In addition, please check out our hedge fund investor letters Q1 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.
