Black Bear Value Partners, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. The fund had a 35% return for the full year of 2021, compared to its benchmark, the S&P 500, and the HFRI Index which had a 28.7% and 14.8% return for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Black Bear Value Partners, in its Q4 2021 investor letter, mentioned Green Brick Partners, Inc. (NASDAQ:GRBK) and discussed its stance on the firm. Founded in 2006, Green Brick Partners, Inc. (NASDAQ:GRBK) is a Plano, Texas-based diversified homebuilding and land development company with a $973.5 million market capitalization, and is currently spearheaded by its CEO, James R Brickman. Green Brick Partners, Inc. (NASDAQ:GRBK) delivered a -14.30% return since the beginning of the year, while its 12-month returns are up by 7.54%. The stock closed at $19.18 per share on April 07, 2022.
Here is what Black Bear Value Partners has to say about Green Brick Partners, Inc. (NASDAQ:GRBK) in its Q4 2021 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.
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. Rates are still near historic lows and people are desiring more personal space as remote work becomes more acceptable.
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 6-10x 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) failed to obtain a mark 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 fourth quarter of 2021, compared to 16 funds in the previous quarter. Green Brick Partners, Inc. (NASDAQ:GRBK) delivered a -11.07% return in the past 3 months.
In March 2022, we also shared another hedge fund’s views on Green Brick Partners, Inc. (NASDAQ:GRBK) 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.
