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 Power REIT (NYSE: PW) and discussed its stance on the firm. Power REIT is a Green Tree, Pennsylvania-based real estate investment trust company with a $178.8 million market capitalization. PW delivered a 101.50% return since the beginning of the year, while its 12-month returns are up by 88.18%. The stock closed at $53.82 per share on December 20, 2021.
Here is what Horos Asset Management has to say about Power REIT in its Q3 2021 investor letter:
“The other company we added this quarter is Millennium Investment and Acquisition (“Millennium”). This is an investment idea coming from Power REIT, a holding in our portfolio. As a reminder, Power REIT is primarily engaged in the purchase of greenhouses which it then leases to cannabis producers, earning high returns by taking advantage of the difficulty these companies still have in obtaining funding through the traditional mechanisms. Well, one of the latest producers to join Power REIT’s list of clients is, precisely, Millennium.
The attraction of this U.S. company is threefold. Firstly, we join the same management team that has created tremendous value for Power REIT shareholders, increasing its share price tenfold in just over two years. Indeed, David Lesser is also the CEO of Millennium and controls c. 19.5% of the shares. Secondly, we are buying the shares at very attractive prices. The company has three greenhouses and one outdoor cultivation facility that it has acquired mostly by taking advantage of the forced sale of their previous owners. It has a greenhouse in Michigan that it is adapting to start its cannabis production in 2022, another in Colorado and the remaining facilities in Oklahoma. The company expects to generate around 35 million dollars in pre-tax profits with the four assets (using conservative assumptions). This figure compares to the c. 75-million-dollar market cap at quarter-end. Finally, although we do not take it into account in our numbers, Millennium has a plant that they are working on for obtaining activated carbon from macadamia nut shells, with applications in the energy industry, such as storage. The asset was acquired, again, at a deep discount due to the bankruptcy of its owner.”
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Based on our calculations, Power REIT (NYSE: PW) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. PW was in 4 hedge fund portfolios at the end of the third quarter of 2021, compared to 3 funds in the previous quarter. Power REIT (NYSE: PW) delivered a 15.49% return in the past 3 months.
Earlier this year, we also shared Horos Asset Management’s views on PW 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.
