Silver Beech Capital, a value-oriented investment management firm, released its second quarter 2023 investor letter. A copy of the same can be downloaded here. Year-to-date, the fund returned 14.1% compared to 14.5% for the S&P 500 Index and 4.4% for the Russell 2000 Index. The fund generated strong absolute and relative returns. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Silver Beech Capital highlighted stocks like Playa Hotels & Resorts N.V. (NASDAQ:PLYA) in the second quarter 2023 investor letter. Headquartered in Fairfax, Virginia, Playa Hotels & Resorts N.V. (NASDAQ:PLYA) owns and operates hotels and resorts. On July 14, 2023, Playa Hotels & Resorts N.V. (NASDAQ:PLYA) stock closed at $8.28 per share. One-month return of Playa Hotels & Resorts N.V. (NASDAQ:PLYA) was -8.00%, and its shares gained 27.98% of their value over the last 52 weeks. Playa Hotels & Resorts N.V. (NASDAQ:PLYA) has a market capitalization of $1.261 billion.
Silver Beech Capital made the following comment about Playa Hotels & Resorts N.V. (NASDAQ:PLYA) in its second quarter 2023 investor letter:
“Playa Hotels & Resorts N.V. (NASDAQ:PLYA) is a small-capitalization owner/operator of 25 all-inclusive resorts in Mexico (Cancun and Pacific Coast), the Dominican Republic, and Jamaica. Playa’s portfolio is branded (mostly Hilton and Hyatt), includes primarily luxury/upscale resorts, and operates at among the highest margins in the hotel industry. Playa’s resorts are irreplaceable assets in supply-constrained markets that continue to benefit from rising post-COVID international tourism.
We believe the public market discounts Playa’s shares based on recessionary fears, however, strong international flight data into Playa’s regional airport hubs do not support this view, and spot private market valuations for Playa’s hotels exceed its public market valuation. Management has demonstrated impressive capital allocation to address this valuation gap by moderating growth capital expenses for only the highest return projects and looking to sell select strategic resorts and repurchase shares at today’s attractive level. Over the last two quarters, Playa has repurchased more than 4% of the company’s outstanding shares. The company trades at a TEV/EBITDA of 7.6x (2023E), and a low double-digit free cash flow yield. We believe Playa’s intrinsic value is more than 50% greater than its June 30 share price.”
Playa Hotels & Resorts N.V. (NASDAQ:PLYA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held Playa Hotels & Resorts N.V. (NASDAQ:PLYA) at the end of first quarter which was 23 in the previous quarter.
We discussed Playa Hotels & Resorts N.V. (NASDAQ:PLYA) in another article and shared Voss Capital’s views on the company. In addition, please check out our hedge fund investor letters Q2 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.
