Bireme Capital, an investment management firm, published its fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A net return of 47.1% was recorded by the fund for 2020, outperforming its S&P500 benchmark that delivered an 18.3% return. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Bireme Capital, in their Q4 2020 investor letter, said that they acquire a position in Ryman Hospitality Properties, Inc. (NYSE: RHP) during the third quarter of 2020. Bireme Capital identifies Ryman Hospitality Properties, Inc. as one of the companies at the other side of the value spread, the other end of the “barbell market”. Ryman Hospitality Properties, Inc. is an entertainment, resort, and hotel company based in Nashville, Tennessee. It currently has a $4.4 billion market capitalization. Since the beginning of the year, RHP delivered a 19.67% return, extending its 12-month gains to 40.66%. As of March 4, the stock closed at $79.13 per share.
Here is what Bireme Capital has to say about Ryman Hospitality Properties, Inc. in their Q4 2020 investor letter:
“In Q3, we purchased shares of Ryman Hospitality Properties (RHP), another company whose business and stock price were temporarily crushed by the pandemic. Ryman is an owner of large, convention-focused hotels under the “Gaylord” banner. Prior to 2020, the company had grown EBITDA every year since 2012, and has a demonstrated ability to profitably develop new hotels from scratch, having opened 5 since the year 2000. These hotels dominate their niche in the conference and convention segment: they have more meeting space square footage than almost all of their competitors.
Ryman also operates a fast-growing music venue business, which includes the Ryman Auditorium, the Grand Ole Opry, and a chain of bar and concert venues called “Ole Red.” These comprise RHP’s “entertainment” segment, which grew EBITDA from $14.5m in 2011 to $58m in 2019, an 18% CAGR.
We think the company will do more than $300m of free cash flow in 2022. When we were buying RHP at the end of Q3, it had a market cap of $2.0b, a mere 6x multiple of FCF. While the market cap has recently increased to $3.7b, we still find the valuation very attractive for a company with their track record.”
Our calculations show that Ryman Hospitality Properties, Inc. (NYSE: RHP) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Ryman Hospitality Properties, Inc. was in 20 hedge fund portfolios, compared to 24 funds in the third quarter. RHP delivered a decent 21.93% return in the past 3 months.
The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
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