Praetorian Capital, an investment management company, released its third-quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund was down by 2.29% net of fees in the third quarter. The core portfolio positions mostly declined in the quarter, while the Event-Driven book produced a slightly positive return. In the first nine months, the net performance was mostly driven by the Event-Driven book, with a modest negative return from the core book. For more information on the fund’s top picks in 2024, please check its top five holdings.
Praetorian Capital highlighted stocks like The St. Joe Company (NYSE:JOE), in the third quarter 2024 investor letter. The St. Joe Company (NYSE:JOE) is a real estate development, asset management, and operating company. The one-month return of The St. Joe Company (NYSE:JOE) was -3.39%, and its shares gained 20.05% of their value over the last 52 weeks. On October 18, 2024, The St. Joe Company (NYSE:JOE) stock closed at $59.63 per share with a market capitalization of $3.409 billion.
Praetorian Capital stated the following regarding The St. Joe Company (NYSE:JOE) in its Q3 2024 investor letter:
“The St. Joe Company (NYSE:JOE) owns approximately 168,000 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 may grow recurring revenue at attractive rates for the foreseeable future, with earnings growing at a much faster clip. Meanwhile, I believe the shares trade at an attractive multiple on Adjusted Funds from Operations (AFFO), 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 likely to remain 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.”
Aerial view of a newly-developed residential community with homesites and golf courses.
Sprott is an asset manager that primarily manages exchange traded vehicles in various commodity The St. Joe Company (NYSE:JOE) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held The St. Joe Company (NYSE:JOE) at the end of the second quarter which was 21 in the previous quarter. While we acknowledge the potential of The St. Joe Company (NYSE:JOE) 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.
In another article, we discussed The St. Joe Company (NYSE:JOE) and shared Praetorian Capital’s views on the company in the previous quarter. 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.
