Praetorian Capital, an investment management company, released its second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund was down by 1.69% net of fees in the second quarter. The core portfolio positions had both profits and losses in the second quarter, but the Event-Driven book saw a decent return—even though it had to give back part of those gains in June. For more information on the fund’s top picks in 2024, please check its top five holdings.
Praetorian Capital highlighted stocks like Sprott Inc. (NYSE:SII), in the second quarter 2024 investor letter. Sprott Inc. (NYSE:SII) is an asset management holding company. The one-month return of Sprott Inc. (NYSE:SII) was 11.59%, and its shares gained 43.70% of their value over the last 52 weeks. On July 23, 2024, Sprott Inc. (NYSE:SII) stock closed at $46.30 per share with a market capitalization of $1.178 billion.
Praetorian Capital stated the following regarding Sprott Inc. (NYSE:SII) in its Q2 2024 investor letter:
“Sprott Inc. (NYSE:SII) is an asset manager, that primarily manages exchange traded vehicles in various commodity sectors, with a focus on precious metals and uranium—two sectors that I’m quite bullish on. Sprott earns management fees based on the assets under management and in a virtuous cycle where they experience both inflows and asset appreciation, the fees should grow rapidly on a fixed cost basis, creating dramatic operating leverage.
I should note that on an earnings basis, Sprott is a good deal more expensive than most businesses that we tend to invest in. That said, I believe that this valuation is deserved and likely to increase due to the quality of the business and its scarcity value. With gold having made a new all-time high in US Dollars, investors will continue to seek out ways to gain leverage to precious metals, without the risks of mining. In my universe of companies, only A-Mark and Sprott offer this sort of leverage with any amount of liquidity. As investors also discover this, I believe that they’ll bid both of these companies higher. While we could have just bought more A-Mark, I felt that diversification was warranted, especially as this Fund already owns approximately 5.9% of A-Mark (as of June 30, 2024). Besides, Sprott gets us added exposure to uranium, a sector that I’m also bullish on.”
A close-up image of a stock market graph displaying the growth of the company’s mutual funds.
Sprott Inc. (NYSE:SII) is not on our list of 31 Most Popular Stocks Among Hedge Funds. Sprott Inc. (NYSE:SII) was held by 18 hedge fund portfolios at the end of the first quarter, compared to 15 in the previous quarter, according to our database. In the first quarter, Sprott Inc.’s (NYSE:SII) AUM once again hit all-time highs due to higher gold and silver prices. AUM increased by $0.6 billion during the quarter compared to Q4 2023. While we acknowledge the potential of Sprott Inc. (NYSE:SII) 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 Q2 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.
