Arquitos Capital, an investment management firm, published its first quarter 2021 investor letter – a copy of which can be downloaded here. A net return of 41.2% was delivered by the fund for the Q1 of 2021, ahead of its S&P 500 benchmark that delivered a 6.2% return in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Arquitos Capital, in their Q1 2021 investor letter, mentioned MMA Capital Holdings, Inc. (NASDAQ: MMAC) and shared their insights on the company. MMA Capital Holdings, Inc. is a Baltimore, Maryland-based holding company that currently has a $96.9 million market capitalization. Since the beginning of the year, MMAC delivered a -32.44% return, while its 12-month gains are down by -36.32%. As of April 23, 2021, the stock closed at $16.62 per share.
Here is what Arquitos Capital has to say about MMA Capital Holdings, Inc. in their Q1 2021 investor letter:
“We also had news from one of our other major positions, MMA Capital (MMAC), that came out after the end of the quarter. MMAC was caught up in the major winter storms that occurred in Texas, and they announced that they may see losses of up to $4 per share. This caused shares to drop from $22.81 at the end of the first quarter to the $17 range. Our portfolio allocation for MMAC was down to less than 17% at the end of Q1.
We are continuing to hold our shares. Adjusted book value is around $39. Even with a $4 hit, which is likely overstated, the discount between the share price and NAV is massive. The Texas situation was a one-time black mark on the company and involved a lot of bad luck on timing. MMAC’s management has a long history of acting ethically and in the interests of shareholders, and I am confident that they will continue to do so. After all, they are all major shareholders themselves.
I expect more guidance on their capital allocation strategy going forward, as well as details on what they will do to close the discount to NAV.”
Our calculations show that MMA Capital Holdings, Inc. (NASDAQ: MMAC) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, MMA Capital Holdings, Inc. was in 5 hedge fund portfolios, compared to 3 funds in the third quarter. MMAC delivered a -30.75% return in the past 3 months.
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