Black Bear Value Partners, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. A quarterly portfolio return of +1.6% was recorded by the fund for the first quarter of 2022 increasing its year-to-date return to +1.9%. Meanwhile, its benchmarks, the S&P 500 and HFRI Index delivered a +3.7% and +0.2% returns respectively for the same period. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Black Bear Value Fund mentioned Green Brick Partners, Inc. (NASDAQ:GRBK) and explained its insights for the company. Founded in 2006, Green Brick Partners, Inc. (NASDAQ:GRBK) is a Plano, Texas-based diversified homebuilding and land development company with a $984.2 million market capitalization. Green Brick Partners, Inc. (NASDAQ:GRBK) delivered a -36.07% return since the beginning of the year, while its 12-month returns are down by -23.72%. The stock closed at $19.39 per share on April 13, 2022.
Here is what Black Bear Value Fund has to say about Green Brick Partners, Inc. (NASDAQ:GRBK) in its Q1 2022 investor letter:
“Green Brick Partners is a residential land developer and homebuilder. Most of their operations are in Texas, Georgia, and Florida. GRBK was formerly a private partnership between Jim Brickman and entities related to Greenlight Capital (managed by David Einhorn). David is currently the Chairman of the Board.
As discussed earlier, there is a long-term fundamental supply/demand imbalance in housing inventory. This is a direct result of underproduction of new homes amid a challenging mortgage financing environment over the last 10+ years since the Great Financial Crisis. Looking forward we should have increased housing demand from millennials as they enter the family-phase of life and desire more space.
It is rare to be able to partner with an excellent operator and an excellent capital allocator. As evidenced by our investment in AutoNation, when you marry those 2 concepts you can wind up with a wonderful result. GRBK has been reinvesting their cashflow in additional lots/land inventory. This masks the earnings power of the company. The company is valued somewhere between 5-8x steady-state earnings and potentially even cheaper than that. I tend to be more conservative given the potential for rate rises and inflationary increases in development costs. We have high-quality stewards at both the operating and Board level.”
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Our calculations show that Green Brick Partners, Inc. (NASDAQ:GRBK) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Green Brick Partners, Inc. (NASDAQ:GRBK) was in 12 hedge fund portfolios at the end of the first quarter of 2022, compared to 16 funds in the previous quarter. Green Brick Partners, Inc. (NASDAQ:GRBK) delivered a -26.02% return in the past 3 months.
In April 2022, we published an article that includes Green Brick Partners, Inc. (NASDAQ:GRBK) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
