Curreen Capital, an investment management firm, published its fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A return of 49.70% was recorded by the fund for the Q4 of 2020, above both its S&P 500 benchmark that returned 12.15% and the MSCI World Index that returned 14.05%. You can view the fund’s top 10 holdings to have a peek at their top bets for 2021.
Curreen Capital, in their Q4 2020 Investor Letter said that they were able to see a commendable value in American Outdoor Brands, Inc. (NASDAQ: AOUT), and that made them acquire a position in the company. American Outdoor Brands, Inc. is an industry leading provider of outdoor products and accessories that currently has a $277.7 million market cap. For the past 3 months, AOUT delivered a 31.56% return and settled at $19.84 per share at the closing of January 22nd.
Here is what Curreen Capital has to say about American Outdoor Brands, Inc. in their Investor Letter:
“American Outdoor is a hunting and camping accessories company (no guns or ammunition) that spun out of Smith & Wesson in August 2020. The business was cobbled together in a series of acquisitions from 2014 2017, and present management has worked to grow the brands organically. The industry overall was weak from 2016 until early 2020, when events drove people in the US to buy guns and go into the woods to hunt, fish, camp or… anything, just to get a breath of fresh air.
While American Outdoor has benefited from these 2020-driven trends—with revenues in each of the past two quarters up more than 50% from the prior year—I believe that the business will continue to grow in the coming years. The hunting and camping accessories market that American Outdoor competes in is very large (they estimate $30-35B in annual sales) and fragmented. American Outdoor’s largest competitors (Orvis, and Vista Outdoor’s Hunting & Shooting Accessories division) each have about 1% market share. American Outdoor has been gaining share in this fragmented market, growing faster than Vista Outdoor’s division in each year since 2017.
I view American Outdoor as a rapidly growing business, taking share in a large, fragmented, and attractive market, currently benefiting from strong tailwinds. The CEO is relatively young and unproven, but I like the signs that I have seen so far (for example: the discipline to avoid M&A despite his M&A background, meaningful share purchases, and solid business results). Signs so far point to the company continuing to execute on its potential. We paid an average of $13.94 for our shares.”
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