Nomadic Value Investment Partners recently released its Q2 2020 Investor Letter, a copy of which you can download here. The investment firm supports enterprising individuals and families in achieving respectable long-term investment performance. You should check out Nomadic Value’s top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.
In the said letter, Nomadic Value 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. Year-to-date, MMA Capital Holdings Inc. (NASDAQ:MMAC) stock lost 13.2% and on August 14th it had a closing price of $27.64. Here is what Nomadic Value said:
“We topped up MMA Capital (ticker: MMAC), a utility-scale solar development mezzanine lender, as we believe the share price sold off from COVID fears but has remained depressed due to market technicals. Our observations this quarter confirm there’s more demand for short-term debt capital than before COVID. The reason is project delays around permitting, product procurement, and construction site safety. Naturally, developers need more capital and pay more interest when it takes longer to complete a project. Developments targeted for completion in 2020 and 2021 are fully baked at this point, and our understanding is that utilities are working diligently to follow through on their grid interconnection commitments. The potential issue for MMAC is a slowdown of projects originally planned to begin construction in 2021/2022. These projects are in Power Purchase Agreement negotiation and utility permitting phases today. As with any industry right now, the lack of human interaction slows progress for anything coming new to the physical world, and we could see a negative ripple throughout utility scale developments. Additionally, given “contract risk” introduced to the 2021/2022 vintage developments, the cost of capital for developers has increased, even while it has decreased for completed projects selling into infrastructure funds. MMAC could see higher interest loans as a result, somewhat buffering a potential decrease in volume. On balance we think it’s hard to predict right now what will happen to the 2021/2022 vintage, but ultimately we are betting this will be isolated and temporary and we’ve likely already seen the worst of it – even as COVID gets worse. The solar industry is impressively resilient14 and today it is the most competitive source of energy in many electricity markets. Projects are going to get planned, financed, and built.”
Earlier this month, we published an article revealing that Alluvial Capital Management is bullish about MMA Capital Holdings Inc. (NASDAQ:MMAC) stock. The investment firm believes that the stock should trade somewhere in the upper $30s, much closer to book value.
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Video: Top 5 Stocks Among Hedge Funds
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