Is Roadrunner Transportation Systems (RRTS) Still a Worthy Investment?

Argosy Investors, an investment management firm, published its third-quarter 2021 investor letter – a copy of which can be downloaded here. For the third quarter of 2021, the fund’s year-to-date 2021 performance was 17.1% in select accounts, while S&P 500 by comparison returned 15.9% for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

Argosy Investors, in its Q3 2021 investor letter, mentioned Roadrunner Transportation Systems, Inc. (NYSE: RRTS) and discussed its stance on the firm. Roadrunner Transportation Systems, Inc. is a Downers Grove, Illinois-based freight transportation arrangement company with a $141.7 million market capitalization. RRTS delivered an impressive 53.59% return for the past 5 days, extending its 12-month returns to 87.00%. The stock closed at $2.99 per share on November 23, 2021.

Here is what Argosy Investors has to say about Roadrunner Transportation Systems, Inc. in its Q3 2021 investor letter:

“RRTS stock “declined” almost 100% during the quarter. I write “declined” in quotation marks because I don’t actually believe the value of this position declined at all. There was an SEC rule change implemented during the quarter designed to protect small investors. The rule change required companies to prepare publicly available financial information in order for brokers to quote their prices. Since RRTS is owned 90% by Elliott, a prominent hedge fund, they made the decision months ago to save money by ceasing many financial reporting requirements during their turnaround. As a result, the brokers where your accounts reside will not quote a price for our shares.

We believe RRTS will emerge back onto the public markets in due course, but for now they are essentially a private company. We will have to wait an indefinite period of time to learn what happens to our investment. My initial thesis still remains valid that RRTS is turning around its LTL business to become a profitable competitor alongside XPO and ODFL. With that said, Elliot has a reputation for having “sharp elbows” and it is within the realm of possibility that our very small investment into RRTS could become worthless at some point. I will update you when there is progress on this company.”

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Based on our calculations, Roadrunner Transportation Systems, Inc. (NYSE: RRTS) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. Roadrunner Transportation Systems, Inc. (NYSE: RRTS) delivered a -12.00% return in the past 3 months.

Disclosure: None. This article is originally published at Insider Monkey.