Praetorian Capital, an investment management company, released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. For the full year, the fund lost 10.55% net of fees. The fund was down by 14.76% net of fees in the fourth quarter. It compounded capital at a 41.76% annual net rate, since inception. The core portfolio positions mostly declined in the quarter, while the event-driven book produced a slightly positive return. The core portfolio positions overall decreased over the course of the year, but the losses in the core book were offset by the event-driven book. For more information on the fund’s top picks in 2024, please check its top five holdings.
Praetorian Capital highlighted stocks like Sprott Inc. (NYSE:SII), in the fourth quarter 2024 investor letter. Sprott Inc. (NYSE:SII) is an asset management holding company. The one-month return of Sprott Inc. (NYSE:SII) was -7.75%, and its shares gained 11.69% of their value over the last 52 weeks. On January 13, 2025, Sprott Inc. (NYSE:SII) stock closed at $39.75 per share with a market capitalization of $1.01 billion.
Praetorian Capital stated the following regarding Sprott Inc. (NYSE:SII) in its Q4 2024 investor letter:
“Sprott Inc. (NYSE:SII) is an asset manager that primarily manages exchange traded vehicles in various commodity sectors, with a focus on precious metals and uranium—two sectors that I’m quite bullish on. Sprott earns management fees based on the assets under management and in a virtuous cycle where they experience both inflows and asset appreciation, the fees should grow rapidly on a fixed cost basis, creating dramatic operating leverage.
I should note that on an earnings basis, Sprott is a good deal more expensive than most businesses that we tend to invest in. That said, I believe that this valuation is deserved and likely to increase due to the quality of the business and its scarcity value. With gold having made a new all-time high in US Dollars, investors will continue to seek out ways to gain leverage to precious metals, without the risks of mining.
In my universe of companies, only A-Mark and Sprott offer this sort of leverage with any amount of liquidity. As investors also discover this, I believe that they’ll bid both of these companies higher. While we could have just bought more A-Mark, I felt that diversification was warranted, especially as this Fund already owns just under 5% of A-Mark. Besides, Sprott gets us added exposure to uranium, a sector that I’m also bullish on.”
A close-up image of a stock market graph displaying the growth of the company’s mutual funds.
Sprott Inc. (NYSE:SII) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held Sprott Inc. (NYSE:SII) at the end of the third quarter which was 21 in the previous quarter. While we acknowledge the potential of Sprott Inc. (NYSE:SII) 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 Sprott Inc. (NYSE:SII) and shared Praetorian Capital’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q4 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.