Greystone Capital Management, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. During the fourth quarter of 2021, returns for separate accounts managed by Greystone Capital ranged from +3.6% to -14.5%. The median account return was -10.8%, net of fees. The median account return for the full year 2021 was +39.4%, net of fees. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Greystone Capital Management, in its Q4 2021 investor letter, mentioned IDT Corporation (NYSE: IDT) and discussed its stance on the firm. IDT Corporation is a Newark, New Jersey-based telecommunication company with a $1.1 billion market capitalization. IDT delivered a -2.72% return since the beginning of the year, while its 12-month returns are up by 109.15%. The stock closed at $42.96 per share on February 09, 2022.
Here is what Greystone Capital Management has to say about IDT Corporation in its Q4 2021 investor letter:
“My prior comment on owner-operators is fitting, as during the quarter we entered into a core position in IDT Corp., a founder-led company with an incredibly strong history of value creation and multiple catalysts on the horizon for potential share price appreciation. IDT is a telecommunications company with zero comps that is both misunderstood and overlooked as a confusing, slow growing secularly declining telecom business that pays no dividends and has unappealing historical financials. IDT is not for the industry specialist crowd, wouldn’t make sense for quant or momentum strategies, isn’t included in any passive indices and has a market cap below $1 billion with 70% of the voting power held by insiders. This leaves the small group of active small cap investors as the only participants who might be interested in analyzing IDT. Throw in the fact that management participates in one investor conference per year and has done little to gain research coverage for IDT or any of their subsidiaries, and there is the potential for mispricing here. These factors along with the recent market selloff have caused IDT to appear undervalued looking a few years out, using conservative business assumptions. Until recently, I was among the group described above, as studying IDT took some getting out of my own way to appreciate.
The reason for the above ground lack of appeal involves the historical playbook for IDT, where the development of subsidiaries starts with idea implementation, followed by execution and incubation, and ends with value unlocks via tax free spinoffs or dividends. Since 2012 when this spinoff strategy was enacted, IDT has parted ways with five businesses valued at nearly $3 billion and has collectively
distributed over $200mm in dividends. This track record of value creation has resulted in every $1 invested in IDT in 2012 to be worth over $45 today. That’s not a typo. Yet a look at IDT stock price and consolidated financials from 2012-2020 would reveal nothing short of a ‘loser’ with 8 years of flat returns and limited revenue or operating income growth at the consolidated level. In my view, this focus on trailing or consolidated numbers – still happening today – has caused IDT stock to be overlooked and ignored by most investors…” (Click here to see the full text)
Photo by Mika Baumeister on Unsplash
Our calculations show that IDT Corporation (NYSE: IDT) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. IDT was in 10 hedge fund portfolios at the end of the third quarter of 2021, compared to 13 funds in the previous quarter. IDT Corporation (NYSE: IDT) delivered a -27.57% return in the past 3 months.
In November 2021, we also shared another hedge fund’s views on IDT in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
