Arquitos Capital recently released its Q3 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 2.1% for the third quarter (net of fees), underperforming its benchmark, the S&P 500 Index which returned 8.9% in the same quarter. You should check out Arquitos Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.
In the said letter, Arquitos Capital highlighted a few stocks and MMA Capital Holdings Inc. (NASDAQ:MMAC) is one of them. MMA Capital Holdings Inc. (NASDAQ:MMAC) is a portfolio management company. MMA Capital Holdings Inc. (NASDAQ:MMAC) stock lost 11.8% and on November 9th it had a closing price of $27.50. Here is what Arquitos Capital said:
“MMAC had an eventful last few months. The company reported excellent results from their solar lending fund and shares went from around $23 to above $28. Soon after the announcement of their secondquarter results, the company’s long-time CEO, Mike Falcone, announced his retirement. This was a surprise to investors and sent shares tumbling back down to $22.51 at the end of the third quarter.
I am not overly concerned about the change in leadership. After talking with the company, the retirement appears to be just that and nothing more. Falcone is staying on the board. The change may even provide an opportunity for the company to adjust their capital return policy, though their previous policy was nothing to complain about. Investors should appreciate all that Mike did for the company and for shareholders. We wish him well in retirement.
MMAC’s most recent book value is $37.37, adjusted to ignore their tax benefits. It will be higher in their next quarterly report. The company can easily return $3 to $4 per share to shareholders, but they also have significant internal reinvestment opportunities. Whatever the new leadership decides to do with the significant free cash flow they are generating, that gap between the current stock price and book value will contract.”
This isn’t the first time Arquitos Capital talked about MMA Capital Holdings Inc. (NASDAQ:MMAC) favorably either. The investment firm has been a long time MMA Capital Holdings Inc. (NASDAQ:MMAC) bull. In April 2019, we shared Arquitos Capital’s bullish MMA Capital Holdings Inc. (NASDAQ:MMAC) thesis in this article.
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