Alluvial Capital Management, an investment advisory firm, released its third-quarter 2023 investor letter. A copy of the same can be downloaded here. The fund fell 1.1% in the quarter compared to the Russell 2000 Index’s -5.2% return and the Russell Microcap Index’s -7.9% return. Alluvial fund is up 11.6% YTD, outperforming both the indexes. During this quarter, the fund’s performance was driven by investments in little-known securities with strong balance sheets and predictable cash flows. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Alluvial Capital Management highlighted stocks like P10, Inc. (NYSE:PX) in the third quarter 2023 investor letter. Headquartered in Dallas, Texas, P10, Inc. (NYSE:PX) provides multi-asset class private market solutions in the alternative asset management industry. On October 31, 2023, P10, Inc. (NYSE:PX) stock closed at $9.42 per share. One-month return of P10, Inc. (NYSE:PX) was -14.13%, and its shares lost 10.71% of their value over the last 52 weeks. P10, Inc. (NYSE:PX) has a market capitalization of $1.095 billion.
Alluvial Capital Management made the following comment about P10, Inc. (NYSE:PX) in its Q3 2023 investor letter:
“I only wish the market were as sanguine when it comes to another large holding of ours, P10, Inc. (NYSE:PX) After trading to the low $13s in August following a strong earnings report, shares have retreated all the way to below $10, a level we last saw in April. Since then, the company has raised an additional $1 billion of fee-paying assets under management and reduced debt by $18 million. When the company reports earnings in a few weeks, I expect further growth in AUM and additional debt reduction.
The additional assets under management increase P10’s earnings by around 4.2 cents per share. The debt reduction increases earnings by an additional cent. Together these actions result in a 7% increase in P10’s recurring cash flow per share in the last 6 months, but the market has shrugged it off entirely. P10 shares now languish at the lowest ratio of enterprise value to assets under management since the firm’s IPO in 2021. Blame interest rates, blame a tougher environment for alternative assets fundraising. I still don’t see why P10 shares should change hands at 11x free cash flow. Given P10’s highly predictable and recurring revenue and earnings stream, I view the shares as an “equity bond” with a yield nearing 9%, a yield that will grow organically at high single digit rates for years on end. Those aren’t easy to find.”
Source: PEXELS
P10, Inc. (NYSE:PX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 10 hedge fund portfolios held P10, Inc. (NYSE:PX) at the end of second quarter which was 14 in the previous quarter.
We previously discussed P10, Inc. (NYSE:PX) in another article and shared Alluvial Capital Management’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 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.
