Artko Capital, an asset management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. For the fourth calendar quarter of 2021, an average partnership interest in Artko Capital LP was down 3.4% net of fees. At the same time, investments in the most comparable market indexes—Russell 2000, Russell Microcap, and the S&P 500—were up 2.1%, down 2.7%, and up 8.6%, respectively. For the calendar year of 2021, an average partnership interest in Artko Capital LP was up 19.4% net of fees. At the same time, investments in the aforementioned market indexes were up 14.8%, 19.3%, and 28.7%, respectively. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Artko Capital, in its Q4 2021 investor letter, mentioned Gaia, Inc. (NASDAQ:GAIA) and discussed its stance on the firm. Founded in 1988, Gaia, Inc. (NASDAQ:GAIA) is a Louisville, Colorado-based digital video subscription services company with a $113.5 million market capitalization, and is currently spearheaded by its CEO, Jirka Rysavy. Gaia, Inc. (NASDAQ:GAIA) delivered a -33.96% return since the beginning of the year, while its 12-month returns are down by -57.09%. The stock closed at $5.66 per share on March 18, 2022.
Here is what Artko Capital has to say about Gaia, Inc. (NASDAQ:GAIA) in its Q4 2021 investor letter:
“Gaia (GAIA) – 9% of Portfolio; $6.50 cost basis/$7.25 current price
Our investment in Gaia has been our longest and most patient holding, that we have held in size since the launch of our partnership almost seven years ago in 2015. The stock has gone from sub $5.00 per share in 2016 to over $20.00 in 2018 to below $6.00 in 2019 to $15 in 2021. We had the opportunity to take substantial profits in 2018 and add at lower prices since then, so our IRR is quite a bit higher than our current price to cost basis suggests; nevertheless, the stock price performance has been extremely disappointing over the last few years, especially in light of continued substantial fundamental improvements in the company business model.
As a reminder, Gaia is a streaming service with close to 900,000 subscribers (relative to 22,000 when we first invested in 2015) as the fanbase grew for the niche documentary, spiritual, and yoga content provided by the service. The ~$140mm market capitalization ($130mm Enterprise Value) company is expected to have over $90mm in revenues in 2022, with an EBITDA over $25mm and close to $10mm in Free Cash Flow. This should be on a continued trend of ~20% compound annual growth rate (CAGR) in revenues, as well as achieving positive Free Cash Flow profitability. Nevertheless, the stock price remains essentially flat since our investment, which has certainly led to some soul searching in this past year, and we had a fairly intense meeting with management at the end of 2021, their first in-person meeting with a shareholder in two years…” (Click here to see the full text)
Our calculations show that Gaia, Inc. (NASDAQ:GAIA) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. Gaia, Inc. (NASDAQ:GAIA) was in 12 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 15 funds in the previous quarter. Gaia, Inc. (NASDAQ:GAIA) delivered a -35.09% return in the past 3 months. 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.
