Merion Road Capital Management, an investment advisor, released its fourth-quarter 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, Merion Road Small Cap Fund had a good performance and returned 5.5% bringing 2024 returns to +17.4%. This compared to 0.3% return for the Russell 2000 Index in the quarter and an 11.4% return in 2024. The long-only portfolio of Merion Road rose 9.0% during the quarter, bringing the 2024 returns to 32.4%. This compared to S&P 500’s 2.5% and 24.9% returns for the same periods. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Merion Road Capital Management highlighted stocks like United Bancorporation of Alabama, Inc. (OTC:UBAB) in its Q4 2024 investor letter. United Bancorporation of Alabama, Inc. (OTC:UBAB) is the bank holding company for United Bank that offers banking services. The one-month return of United Bancorporation of Alabama, Inc. (OTC:UBAB) was -3.32%, and its shares gained 41.46% of their value over the last 52 weeks. On February 3, 2024, United Bancorporation of Alabama, Inc. (OTC:UBAB) stock closed at $58.00 per share with a market capitalization of $206 million.
Merion Road Capital Management stated the following regarding United Bancorporation of Alabama, Inc. (OTC:UBAB) in its Q4 2024 investor letter:
“United Bancorporation of Alabama, Inc. (OTC:UBAB): UBAB was both our largest position and positive contributor to performance for the year (the stock closed at $57.00, up 37%, and paid out some modest dividends as well). I estimate that the bank ended Q3 with more than $50.00/share in excess capital which they can use for share repurchases or business growth. In Q4 the company repurchased 5.5% of their shares outstanding in a block transaction struck at $54.25/share. UBAB will continue to benefit from their low-cost perpetual preferred capital, access to CDFI programs like New Markets Tax Credits and Capital Magnet Fund Awards, and top-tier operating platform. I believe that they can continue to generate $7-$8 in normalized earnings, putting them at 7.5x.”
A banker closely examining a document while seated at his desk.
United Bancorporation of Alabama, Inc. (OTC:UBAB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. While we acknowledge the potential of United Bancorporation of Alabama, Inc. (OTC:UBAB) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.