O’Keefe Stevens Advisory Inc., an asset management firm, published its first-quarter 2021 investor letter – a copy of which can be downloaded here. At the end of Q1 22, the fund’s top 5 holdings represented ~38% of assets. The concentration at the top of the portfolio declined slightly as some lower weighted positions have increased significantly to start the year. These names were primarily in the commodity space, which has seen strong price appreciation due to supply constraints. 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, O’Keefe Stevens Advisory mentioned GrafTech International Ltd. (NYSE:EAF) and explained its insights for the company. Founded in 1886, GrafTech International Ltd. (NYSE:EAF) is a Brooklyn Heights, Ohio-based graphite electrodes and petroleum coke manufacturer with a $2.6 billion market capitalization. GrafTech International Ltd. (NYSE:EAF) delivered a -15.38% return since the beginning of the year, while its 12-month returns are down by -17.14%. The stock closed at $10.01 per share on April 19, 2022.
Here is what O’Keefe Stevens Advisory has to say about GrafTech International Ltd. (NYSE:EAF) in its Q1 2022 investor letter:
“Graftech was purchased by Brookfield Asset Management in 2015 and subsequently taken private as a downturn in the steel industry drove Graftech to the brink of Bankruptcy. Brookfield turned over the entire board and brought in David Rintoul as CEO in 2018. To no surprise, Brookfield granted the board and management team stock options to incentivize executives. However, a surprising announcement came in Q1 2021, where a change of control provision was sprung upon shareholders. Management and other employees received a one-time bonus of $89m due to Brookfield’s ownership stake declining below 30%. While I don’t have a problem with this type of incentive, this clause was never mentioned until the quarter prior to the incentive package vesting. I have been unable to locate this provision in the S-1 or 10-K. Analysts on the call were unaware of this provision as well. Since the incentive package was roughly an entire quarter’s worth of earnings, It was shocking to have this event occur.”
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Our calculations show that GrafTech International Ltd. (NYSE:EAF) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. GrafTech International Ltd. (NYSE:EAF) was in 31 hedge fund portfolios at the end of the fourth quarter of 2021. GrafTech International Ltd. (NYSE:EAF) delivered a -12.27% return in the past 3 months.
In January 2021, we also shared another hedge fund’s views on GrafTech International Ltd. (NYSE:EAF) 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.
