Praetorian Capital, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. During the fourth quarter of 2021, the fund appreciated by 22.44% net of fees. For 2021, the fund appreciated by 142.87% net of fees. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Praetorian Capital, in its Q4 2021 investor letter, mentioned The St. Joe Company (NYSE:JOE) and discussed its stance on the firm. Founded in 1936, The St. Joe Company (NYSE:JOE) is a Florida-based land development company with a $3.1 billion market capitalization and is currently spearheaded by its CEO, Jorge Gonzalez. The St. Joe Company (NYSE:JOE) delivered a 2.79% return since the beginning of the year, while its 12-month returns are up by 15.18%. The stock closed at $53.50 per share on March 17, 2022.
Here is what Praetorian Capital has to say about The St. Joe Company (NYSE:JOE) in its Q4 2021 investor letter:
“JOE owns approximately 175,000 acres in the Florida Panhandle. It has been widely known that JOE traded for a tiny fraction of its liquidation value for years, but without a catalyst, it was always perceived to be “dead money.”
Over the past few years, the population of the Panhandle has hit a critical mass where the Panhandle now has a center of gravity that is attracting people who want to live in one of the prettiest places in the country, with zero state income taxes and few of the problems of large cities. The oddity of the current disdain for so-called “value investments” is that many of them are growing quite fast. I believe that JOE will grow revenue at 30% to 50% each year for the foreseeable future, with earnings growing at a much faster clip. Meanwhile, I believe the shares trade at a single-digit multiple on Adjusted Funds from Operations (AFFO) looking out to 2024, while substantial asset value is tossed in for free.
Besides the valuation, growth, and high Return on Invested Capital (ROIC) of the business, why else do I like JOE? For starters, land tends to appreciate rapidly during periods of high inflation— particularly an inflationary period where interest rates are suppressed by the Federal Reserve. More importantly, I believe we are about to witness a massive population migration as people with means choose to flee big cities for somewhere peaceful.
I suspect that every convulsion of urban chaos and/or tax-the-rich scheming will launch JOE shares higher, and it will ultimately be seen as the way to “play” the stream of very wealthy refugees fleeing for somewhere better.”
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Our calculations show that The St. Joe Company (NYSE:JOE) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. The St. Joe Company (NYSE:JOE) was in 13 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 17 funds in the previous quarter. The St. Joe Company (NYSE:JOE) delivered a 12.58% return in the past 3 months.
In March 2022, we also shared another hedge fund’s views on The St. Joe Company (NYSE:JOE) in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
