Long Cast Advisers, LLC, an independent registered investment adviser investing on behalf of individuals, family offices and endowments, published its first quarter 2022 investor letter – a copy of which can be downloaded here. The fund is concentrated on long-term investing, focused on small-cap companies. For the 1st quarter of 2022, its cumulative net returns declined by 13%. There is tangible rationale why equities have declined but chief among them is rising interest rates. 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, Long Cast Advisers mentioned CoreCard Corporation (NYSE:CCRD) and explained its insights for the company. Founded in 1973, CoreCard Corporation (NYSE:CCRD) is a Norcross, Georgia-based software company with a $205.5 million market capitalization. CoreCard Corporation (NYSE:CCRD) delivered a -38.53% return since the beginning of the year, while its 12-month returns are down by -31.58%. The stock closed at $24.64 per share on May 10, 2022.
Here is what Long Cast Advisers has to say about CoreCard Corporation (NYSE:CCRD) in its Q1 2022 investor letter:
“On the last day of the quarter, Bloomberg reported that Apple Inc. was “developing its own payment processing technology and infrastructure for future financial products … That includes payment processing, risk assessment for lending, fraud analysis, credit checks and additional customer-service functions such as the handling of disputes … The effort is focused on future products, rather than Apple’s current lineup of services.” [emphasis added]
CCRD provides processing technology to Apple for its current credit card offering, operating through a licensing agreement with Apple (and Goldman Sachs as its bank). License fees represent a form of ownership of the software. Unless and until AAPL moves to a different processing software – and there’s no expectation they will on current products – CCRD will continue to generate license fees as long as active monthly account growth exceeds the next threshold. If active monthly account growth stalls or shrinks, there won’t be anymore license fees.
In either case, license fees are lumpy and unpredictable and though they go straight to the bottom line, we don’t own this for lumpy and unpredictable license fees. We own this because management has long showed an ability and effort to build something sustainable, profitable and cash flow positive. Relative to the long-term outlook for this, I believe CCRD was cheap at $35 and is even cheaper at $20…” (Click here to see the full text)
Photo by Danial Igdery on Unsplash
Our calculations show that CoreCard Corporation (NYSE:CCRD) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. CoreCard Corporation (NYSE:CCRD) was in 8 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 9 funds in the previous quarter. CoreCard Corporation (NYSE:CCRD) delivered a -29.19% return in the past 3 months.
In April 2022, we also shared another hedge fund’s views on CoreCard Corporation (NYSE:CCRD) 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.
