Insights From White Brook Capital’s 2020 Q1 Investor Letter

Earlier today we published an article with the title Highlights From White Brook Capital’s 2020 Q1 Investor Letter and talked about White Brook Capital’s comments on Itron Inc (NASDAQ:ITRI) and  Box Inc (NASDAQ:BOX) stocks. White Brook Capital is a fund founded by Basil Alsikafi in August 2019. The fund delivered negative returns of nearly 35.79% in the first quarter of 2020. Basil Alsikafi said in a letter to investors (download a copy here) that Brunswick Corp (NYSE: BC) has a strong financial position and leads the industry in terms of technology. Here is what Alsikafi said:

“Brunswick’s strong balance sheet and technology leadership strengthens its competitive positioning within the industry. The industry is likely to be weaker in the short term as the consumer will have less capital to spend on large discretionary items. Brunswick’s boats cater to the higher end of the spending spectrum and should be somewhat more insulated to economic degradation than their peers. Additionally, any vacation dollars that are unlikely to be spent, can now be spent on upgrading boats where Brunswick owned Mercury is the parts and technology leader. Boating as a recreation is better than its competition as it can be done within the family unit or with trusted others.”

Hedge funds are bullish on Brunswick stock. The hedge funds have been buying the stock since the end of September 2019 (see the chart here).

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Basil Alsikafi’s comments on First Solar

Basil Alsikafi said that the competitive position of First Solar Inc (NASDAQ:FSLR) is strengthened by the coronavirus pandemic. The fund expects that the company’s backlog would ease as currently utility expansion needs are postponed due to coronavirus outbreak. Here is what Alsikafi said:

“First Solar’s position should be strengthened by Covid-19. The Company is significantly back ordered and while that backlog should lighten somewhat as utility expansion needs are temporarily postponed, I expect revisions to be limited. Residential solar installations will be far more limited as a combination of stay at home orders and the discretionary-ness of rooftop solar becomes clear. First Solar has distributed manufacturing and a proven product making travel less necessary than for their competitors as well.”

Brunswick and First Solar stocks recovered most of their losses over the last month. Do you think these two stocks will continue to improve from here?

Disclosure: None. This article is originally published at Insider Monkey.