Palm Valley Capital Management, an investment management firm, released the “Palm Valley Capital Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, Palm Valley Capital Fund increased 0.56% compared to a 4.93% and 4.56% decline for the S&P SmallCap 600 Index and the Morningstar Small Cap Index, respectively. The fund’s equity securities lost 0.78% during the same period, before the negative impact of fund expenses and the positive effect of interest income. Also, the fund ended the period with 81% held in cash equivalents. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Palm Valley Capital Management highlighted stocks like Farmland Partners Inc. (NYSE:FPI) in the third quarter 2023 investor letter. Farmland Partners Inc. (NYSE:FPI) is a real estate company focused on farmland. On October 5, 2023, Farmland Partners Inc. (NYSE:FPI) stock closed at $10.44 per share. One-month return of Farmland Partners Inc. (NYSE:FPI) was -2.43%, and its shares lost 19.26% of their value over the last 52 weeks. Farmland Partners Inc. (NYSE:FPI) has a market capitalization of $522.751 million.
Palm Valley Capital Management made the following comment about Farmland Partners Inc. (NYSE:FPI) in its Q3 2023 investor letter:
“We did not fully sell any positions during the third quarter. We purchased four new names: Avista Corporation (ticker: AVA), Farmland Partners Inc. (NYSE:FPI)), Equity Commonwealth (ticker: EQC), and SSR Mining (ticker: SSRM). We believe these opportunities materialized because higher interest rates are disproportionately impacting investor sentiment toward certain sectors, even as capitalization-weighted, tech-heavy indexes have powered through the headwinds.
We bought a small position in Farmland Partners (FPI) during the quarter. FPI is a real estate investment trust (REIT) focused on farmland. As of June 30, 2023, FPI owned 159,000 acres of farmland with a book value of $1.1 billion. FPI’s stock has declined year-to-date as higher interest rates have increased its borrowing cost and pressured earnings. Management believes the value of its farmland, net of debt, exceeds its market capitalization, and they have been repurchasing stock. The company intends to sell $190 million of farmland in 2023 and will use the proceeds to buy back more stock and reduce debt. While rising interest rates are a risk to FPI’s near-term earnings, the stock is trading at a discount to reported book value and our higher net asset valuation.”
Farmland Partners Inc. (NYSE:FPI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 13 hedge fund portfolios held Farmland Partners Inc. (NYSE:FPI) at the end of second quarter which was 10 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.
