Should You Sell Equity Commonwealth (EQC)?

Palm Valley Capital Management, an investment management firm, released the “Palm Valley Capital Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. In the third quarter, Palm Valley Capital Fund increased 2.43% compared to a 10.13% and 8.48% return for the S&P SmallCap 600 Index and the Morningstar Small Cap Index, respectively. During the quarter the equity positions in the Fund increased by 8.32% slightly below small-cap benchmarks. Cash equivalents comprised 81.5% of the fund’s assets at the period’s end. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Palm Valley Capital Fund highlighted stocks like Equity Commonwealth (NYSE:EQC), in the third quarter 2024 investor letter. Equity Commonwealth (NYSE:EQC) is an internally managed and self-advised real estate investment trust based in Chicago. The one-month return of Equity Commonwealth (NYSE:EQC) was -2.72%, and its shares gained 5.12% of their value over the last 52 weeks. On October 3, 2024, Equity Commonwealth (NYSE:EQC) stock closed at $19.70 per share with a market capitalization of $2.119 billion.

Palm Valley Capital Fund stated the following regarding Equity Commonwealth (NYSE:EQC) in its Q3 2024 investor letter:

“During the quarter, we completely sold three positions: John Wiley & Sons (ticker: WLY), Nathan’s Famous (ticker: NATH), and Equity Commonwealth (NYSE:EQC). We exited our position in Equity Commonwealth, the office REIT once led by Sam Zell. EQC has mostly been a cash pile in recent years, with limited exposure to real estate, as management has been waiting for a compelling transaction to pounce. After several years of searching, management was unable to find commercial real estate that met their investment criteria. As a result, on July 31st, the company agreed to dissolve.”

A closeup of the property portfolio, highlighting the REIT’s internally managed investments.

Equity Commonwealth (NYSE:EQC) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held Equity Commonwealth (NYSE:EQC) at the end of the second quarter which was 34 in the previous quarter. While we acknowledge the potential of Equity Commonwealth (NYSE:EQC) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

Palm Valley Capital Fund purchased Equity Commonwealth (NYSE:EQC) during Q2 2023. In addition, please check out our hedge fund investor letters Q3 2024 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.