Horos Asset Management, an investment management firm, published its third-quarter 2021 investor letter – a copy of which can be downloaded here. Horos Value Internacional gained 3.5% over the quarter and is up 33.6% in 2021, compared to 1.2% and 17.3%, respectively, in its benchmark index. Horos Value Iberia gained 1.7% over the quarter and is up 20.4% for the year, beating the gains of 1.4% and 11.3%, respectively, of its benchmark. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Horos Asset Management, in its Q3 2021 investor letter, mentioned Warrior Met Coal, Inc. (NYSE: HCC) and discussed its stance on the firm. Warrior Met Coal, Inc. is an Alabama-based coal mining company with a $1.2 billion market capitalization. HCC delivered an 11.68% return since the beginning of the year, while its 12-month returns are up by 25.05%. The stock closed at $23.81 per share on December 17, 2021.
Here is what Horos Asset Management has to say about Warrior Met Coal, Inc. in its Q3 2021 investor letter:
“In addition, we trimmed our stake in the U.S. company Warrior Met Coal (“Warrior”), following its excellent recent performance. The metallurgical coal producer, which is necessary to produce steel in blast furnaces, benefited during the quarter from the sharp rise in the price of this commodity. Specifically, the price of Warrior’s metallurgical coal, referenced to Australia’s Premium Low-Vol FOB Hard Coking Coal, rose by 100% in the quarter and is up 300% from the lows of the beginning of the year, when it was trading at around 100 dollars per tonne. The reason for the huge price increase can be found in the bottleneck that this industry is experiencing, due to a few factors. On the one hand, the recovery of economic activity after the worst of the pandemic ended and the extra boost given by the huge fiscal and monetary stimuli from governments globally and, on the other hand, the lack of investment in new supply in recent years due to the hangover from previous overcapacity, the poor situation of some players in the industry and, especially, the political and social agenda against climate change.
This rise in the price of metallurgical coal has seen Warrior’s share price appreciate by more than 70% from last summer’s lows, contributing significantly to our fund’s performance. However, the downside of the story is that Warrior has had the bulk of its employees on strike since April, which means that the company is not producing at one of its two mines and the other is not at 100% capacity, so it is not benefiting from the current positive dynamics like other players in the industry.”
Image by Tshekiso Tebalo from Pixabay
Based on our calculations, Warrior Met Coal, Inc. (NYSE: HCC) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. HCC was in 29 hedge fund portfolios at the end of the third quarter of 2021, compared to 21 funds in the previous quarter. Warrior Met Coal, Inc. (NYSE: HCC) delivered a 1.97% return in the past 3 months.
In October this year, we published an article that makes HCC a part of the 10 Small-Cap Stocks to Buy According to ‘Australia’s Warren Buffett’ Kerr Neilson. 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.
