Praetorian Capital, an investment management company, released its first-quarter 2024 investor letter. The fund was up by 9.25% net of fees in the first quarter. A copy of the letter can be downloaded here. The core portfolio positions saw both advances and declines in the first quarter, but the Event-Driven book generated a decent return for the first time in many quarters. For more information on the fund’s top picks in 2024, please check its top five holdings.
Praetorian Capital featured stocks like The St. Joe Company (NYSE:JOE) in the first quarter 2024 investor letter. Headquartered in Panama City Beach, Florida, The St. Joe Company (NYSE:JOE) is a real estate development asset management and operating company that operates through Residential, Hospitality, and Commercial segments. On May 1, 2024, The St. Joe Company (NYSE:JOE) stock closed at $56.96 per share. One-month return of The St. Joe Company (NYSE:JOE) was 1.08%, and its shares gained 38.39% of their value over the last 52 weeks. The St. Joe Company (NYSE:JOE) has a market capitalization of $3.326 billion.
Praetorian Capital stated the following regarding The St. Joe Company (NYSE:JOE) in its first quarter 2024 investor letter:
“The St. Joe Company (NYSE:JOE) owns approximately 168,000 acres in the Florida Panhandle. It has been widely known that JOE traded for a tiny fraction of its liquidation value for years, but without a catalyst, it was always perceived to be “dead money.”
Over the past few years, the population of the Panhandle has hit a critical mass where the Panhandle now has a center of gravity that is attracting people who want to live in one of the prettiest places in the country, with zero state income taxes and few of the problems of large cities.
The oddity of the current disdain for so-called “value investments” is that many of them are growing quite fast. I believe that JOE may grow revenue at a rapid rate for the foreseeable future, with earnings growing at a much faster clip. Meanwhile, I believe the shares trade at an attractive multiple on Adjusted Funds from Operations (AFFO), while substantial asset value is tossed in for free.
Besides the valuation, growth, and high Return on Invested Capital (ROIC) of the business, why else do I like JOE? For starters, land tends to appreciate rapidly during periods of high inflation—particularly an inflationary period where interest rates are likely to remain suppressed by the Federal Reserve. More importantly, I believe we are about to witness a massive population migration as people with means choose to flee big cities for somewhere peaceful.
I suspect that every convulsion of urban chaos and/or tax-the-rich scheming will launch JOE shares higher, and it will ultimately be seen as the way to “play” the stream of very wealthy refugees fleeing for somewhere better.”
Aerial view of a newly-developed residential community with homesites and golf courses.
The St. Joe Company (NYSE:JOE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database at the end of the fourth quarter, The St. Joe Company (NYSE:JOE) was held by 20 hedge fund portfolios, compared to 20 in the previous quarter.
We previously discussed The St. Joe Company (NYSE:JOE) in another article, where we shared Praetorian Capital’s views on the company. In addition, please check out our hedge fund investor letters Q1 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.
