BOSTON OMAHA Corp (BOMN), MMA Capital Management LLC (MMAC): How Arquitos Capital Management Made a Killing in 2017

Sitestar Corporation (OTCMKTS:SYTE) is a tiny, $31 million company, whose main business is providing Internet access in the US and Canada. The company also has a real estate business that purchases, refurbishes and sells real estate. Mr. Kiel serves as Sitestar Corporation (OTCMKTS:SYTE)’s President, CEO and CFO.  Over the past year, Sitestar Corporation (OTCMKTS:SYTE)’s stock has surged by 38%, but Arquitos’ return was bigger since the fund participated in a private placement in February. In this way, Sitestar Corporation (OTCMKTS:SYTE) was Arquitos’ biggest contributor last year and Mr. Kiel is “more optimistic than ever about the company’s long-term prospects’.

Even though MMA Capital Management LLC (NASDAQ:MMAC)‘s stock gained 28% last year, it actually dragged lower Arquitos’ overall performance, which says quite a lot. Mr. Kiel considers MMA Capital Management LLC (NASDAQ:MMAC) to be his biggest “near-term opportunities” since there have been several developments that are yet to be reflected in the company’s stock price. Earlier this month, MMA Capital Management LLC (NASDAQ:MMAC) signed a transformational agreement, under the terms of which an outside entiry will acquire some of MMA Capital Management’s assets and will take over management responsibilities. The same entity will buy $8.375 million worth of MMA Capital Management LLC (NASDAQ:MMAC)’s stock at $33.50 apiece, which is currently around 20% higher than the trading price of the stock. Mr. Kiel considers that “there is no reason why shares would not trade at book value, especially considering that the company plans to continue to aggressively repurchase shares.”

Of course, Arquitos’ last year returns are unlikely to happen again and Mr. Kiel pointed that fact in his letter as well. Nevertheless, Mr. Kiel seems to have great stock-picking skills as he focuses on companies that have large insider ownership, big buyback programs and strong incentives for cash generation. He tries to identify companies that have a capital allocation approach that is aligned with outside investors and is looking to buy these companies at “a reasonable valuation.” In any case, we will continue to cover Mr. Kiel and Arquito Capital Management’s performance.

Disclosure: none