Voss Capital, LLC an investment management company, released its first-quarter 2023 investor letter. A copy of the same can be downloaded here. Voss Capital’s funds, Voss Value Fund, LP, and the Voss Value Offshore Fund, Ltd returned +1.6% and +1.5% net of fees and expenses respectively, in the first quarter compared to a +2.7% return for the Russell 2000 Index, -0.7% return for the Russell 2000 Value Index, and +7.5% return for the S&P 500 Index. Voss Value Master Fund’s total gross exposure as of March 31st, 2023, was 155.6% and net long exposure was 83.9%. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Voss Capital highlighted stocks like Playa Hotels & Resorts N.V. (NASDAQ:PLYA) in the first quarter 2023 investor letter. Headquartered in Fairfax, Virginia, Playa Hotels & Resorts N.V. (NASDAQ:PLYA) owns and operates hotels and resorts. On May 22, 2023, Playa Hotels & Resorts N.V. (NASDAQ:PLYA) stock closed at $8.84 per share. One-month return of Playa Hotels & Resorts N.V. (NASDAQ:PLYA) was -5.35%, and its shares gained 9.81% of their value over the last 52 weeks. Playa Hotels & Resorts N.V. (NASDAQ:PLYA) has a market capitalization of $1.346 billion.
Voss Capital made the following comment about Playa Hotels & Resorts N.V. (NASDAQ:PLYA) in its Q1 2023 investor letter:
“Playa Hotels & Resorts N.V. (NASDAQ:PLYA) is the only publicly traded, all-inclusive resort owner-operator and has a portfolio of 25 all-inclusive resorts across Mexico, Jamaica, and the Dominican Republic. PLYA built its collection of resorts by acquiring properties from local family owner-operators. These acquisitions were then accompanied by strategic re-branding collaborations with renowned international chains such as Hyatt, Wyndham, and Hilton. Hotels brought under the umbrella of a large global brand benefit from increased consumer awareness, access to the brand’s loyalty member network, and increased negotiating power with the online travel agencies (OTAs), driving higher margins. In 2018, the company presented what appeared to be a credible path to $300 million in EBITDA by 2021, which included multiple high ROI projects that were set to be delivered at the end of 2019 and start generating significant cash flow in 2020. However, the COVID restrictions beginning in March 2020 forced the shutdown of all PLYA’s resorts, reducing occupancy to 0% and delaying their path to $300 million. Earlier this year, we bought PLYA at the same enterprise value that it had in 2018 (~$2 billion). This was a bargain price considering the investments made back in 2018 and 2019 have begun to bear fruit and the additional tailwind of a boom in consumer travel to start 2023, which has particularly skewed toward Mexico and PLYA’s budget friendly, all-inclusive resorts. Airport traffic numbers for some of PLYA’s most important locations (Los Cabos, Puerta Vallarta, Montego Bay, and Cancun – together accounting for 68% of total rooms) show strong passenger traffic growth compared to the same period in 2019 and 20225.
Management is being proactive in creating value for shareholders by exploring sale opportunities for the lower to mid-tier assets (presumably at valuations above the stock’s current valuation in the public market) with the goal of buying back stock. We also love that they added scales to all the bathrooms to cut down on food costs. Our base case assumes an 11x 2023 EBITDA multiple on $288 million EBITDA (adjusted for the $13 million drag from two resorts being sold) for a $3.1 billion EV. With $783 million in net debt, our price target is $15.20/share, 70% upside from the current price of ~$8.90 per share as of the date of this letter.”
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Playa Hotels & Resorts N.V. (NASDAQ:PLYA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held Playa Hotels & Resorts N.V. (NASDAQ:PLYA) at the end of the fourth quarter which was 27 in the previous quarter.
We discussed Playa Hotels & Resorts N.V. (NASDAQ:PLYA) in another article and shared the list of most undervalued travel stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q1 2023 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.
