Cedar Creek Partners recently released its Q1 2021 Investor Letter, a copy of which you can download here. The fund posted a return of 19.7% in the first quarter of 2021, outperforming its benchmark, the S&P 500 which returned 6.3% in the same period. You should check out Cedar Creek Partners’ top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.
In the Q1 2021 Investor Letter, the fund highlighted a few stocks and Pendrell Corp (NYSE:PCOA) is one of them. Pendrell Corp (NYSE:PCOA) is engaged in the business of licensing and selling intellectual property rights to others. In the last three months, Pendrell Corp (NYSE:PCOA) stock gained 31%. Here is what the fund said:
“Pendrell Corporation (PCOA) bid price increased from $125,000 per share to $202,000 per share in the first quarter. In February, the SPAC Pendrell sponsored, Holicity (HOL) announced a deal to merge with Astra. Astra makes small rockets to send satellites into orbit. The deal was positively received as Holicity shares went from $10.34 prior to the announcement to as high as $22.47 before falling back to $11.80 at the end of the quarter.
Pendrell has 778 shares outstanding per the otcmarkets website. Pendrell owns 6,731,000 shares of Holicity and warrants to buy 5,333,333 shares at $11.50 per share. That works out to 8,651 shares and 6,855 warrants of Holicity for each Pendrell share. At Holicity’s quarter end share price of $11.80 per share that makes the value of the Holicity shares equal to $102,901 per Pendrell share (8,651 x $11.80) and the value of the warrants another $2,057 per Pendrell share (6,855 x ($11.80-$11.50)), resulting in a total value for Holicity at $104,148 per Pendrell share. We estimate that Pendrell has cash and other investments of roughly $190,000 to $210,000 per share.3 Therefore, the total value of Pendrell is over $300,000 per share. During the quarter Pendrell brought another SPAC, Colicity (COLIU) public as well. Colicity is larger than holicity so the economics are even better than with holicity. Should Pendrell find an acceptable acquisition, total value of Pendrell would increase by roughly another $100,000 to $150,000 per share to $400,000 to $450,000 per share.”
Photo by Austin Distel on Unsplash
Cedar Creek Partners has been a long time Pendrell Corp (NYSE:PCOA) bull. In October 2020, we shared Cedar Creek Partners’ bullish Pendrell’s thesis in this article.
Our calculations showed that Pendrell Corp (NYSE:PCOA) isn’t ranked among the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
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Disclosure: None. This article is originally published at Insider Monkey.
