Rhizome Partners, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. For the fourth quarter of 2021, Rhizome Partners generated a net gain of 6.7% versus an 11.0% gain for the Standard & Poor’s 500 Index and a 16.2% gain for the National Association of Real Estate Investment Trusts (NAREIT) Index. For the year, Rhizome Partners Class B returned 24.9% versus 28.7% for the S&P 500 and 41.3% for the NAREIT. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Rhizome Partners, in its Q4 2021 investor letter, mentioned Aspen Group, Inc. (NASDAQ: ASPU) and discussed its stance on the firm. Aspen Group, Inc. is a New York, New York-based education technology holding company with a $29.7 million market capitalization. ASPU delivered a -49.58% return since the beginning of the year, while its 12-month returns are down by -88.36%. The stock closed at $1.19 per share on February 23, 2022.
Here is what Rhizome Partners has to say about Aspen Group, Inc. in its Q4 2021 investor letter:
“Aspen Group is the largest detractor to performance during 2021. The company offers affordable nursing degrees at roughly 50% of the cost charged by competing for-profit nursing programs, such as the University of Phoenix. The CEO appears to be a mission-driven fanatic about using technology to drive down the cost of higher education. For example, Aspen’s all-in cost for a high school graduate is about $37,000 for a Bachelor of Science degree in Nursing. We’ve invested a small amount and tracked the company for some years now. In the last few years, the company offered many innovative solutions to address the nursing shortage and even started its hybrid online and campus-based solution for nursing students. Because it needs to add staff before enrolling students, the company has lost money while growing 40-50% a year. It does sport a healthy gross margin of roughly 55%, which we think can lead to 20% EBITDA margin when growth slows. We were backing the CEO in his aim to create an affordable and less punitive way for high school graduates to improve their lives by earning valuable college degrees that generate high returns on tuition. Aspen inverts the financing of these degrees by having roughly 20% of the students apply for student loans and 80% pay out of pocket, given the low cost. We thought Aspen offered a revolutionary product that was better for the students and better for society. In short, we bet on it being a better mousetrap.”
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Our calculations show that Aspen Group, Inc. (NASDAQ: ASPU) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. ASPU was in 9 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 7 funds in the previous quarter. Aspen Group, Inc. (NASDAQ: ASPU) delivered a -63.27% return in the past 3 months.
In May 2021, we also shared another hedge fund’s views on ASPU in another article. You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.
Disclosure: None. This article is originally published at Insider Monkey.
