Horos Asset Management, an investment management firm, published its third-quarter 2021 investor letter – a copy of which can be downloaded here. Horos Value Internacional gained 3.5% over the quarter and is up 33.6% in 2021, compared to 1.2% and 17.3%, respectively, in its benchmark index. Horos Value Iberia gained 1.7% over the quarter and is up 20.4% for the year, beating the gains of 1.4% and 11.3%, respectively, of its benchmark. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Horos Asset Management, in its Q3 2021 investor letter, mentioned Teekay LNG Partners L.P. (NYSE: TGP) and discussed its stance on the firm. Teekay LNG Partners L.P. is a Bermuda-based marine energy transportation, storage & production company with a $1.4 billion market capitalization. TGP delivered a 47.73% return since the beginning of the year, while its 12-month returns are up by 43.84%. The stock closed at $16.93 per share on December 17, 2021.
Here is what Horos Asset Management has to say about Teekay LNG Partners L.P. in its Q3 2021 investor letter:
“Although released in October, it is worth starting by commenting on a very relevant piece of news for Teekay Corp. and its subsidiary Teekay LNG. Specifically, on October 4, the acquisition of Teekay LNG by Stonepeak (an alternative investment manager specializing in real assets and infrastructure) was announced, including in the transaction the 36 million shares of Teekay LNG controlled by Teekay Corp. and 100% of the General Partner (Teekay GP), which includes another 1.6 million shares. The offered price was $17 per share in cash (excluding subsequent distributions), representing a premium of 8.3% over the previous closing price. How do we value this deal? As shareholders of Teekay LNG, we have sold our position, since, although the price was below what we believe the company is worth, it allows us to use that cash in other investment alternatives that are currently much more attractive and which we will discuss later. As shareholders of Teekay Corp. however, the transaction has been very negative for our interests, as it has significantly reduced the upside potential of this holding company, in which we have been invested for several years. In summary, although it will continue to hold a c. 29% stake in Teekay Tankers, the entity becomes a typical cash box, where its net cash will account for around 90% of its market value. This provides a clear valuation floor, but also creates uncertainty for us about the future of Teekay Corp. Will they distribute the cash as a dividend? Will they buy back their own shares at their current discount? Will they invest in other businesses? Of course, we prefer the share buyback option because it is the one that helps to create direct shareholder value at these prices, but we will have to monitor and analyze the decisions that the management team will make in the future.”
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Based on our calculations, Teekay LNG Partners L.P. (NYSE: TGP) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. TGP was in 10 hedge fund portfolios at the end of the third quarter of 2021, compared to 9 funds in the previous quarter. Teekay LNG Partners L.P. (NYSE: TGP) delivered a 9.16% return in the past 3 months.
Last year, we also shared another hedge fund’s views on TGP in another article. You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q3 page.
Disclosure: None. This article is originally published at Insider Monkey.
