Palm Valley Capital recently released its Q1 2020 Investor Letter, a copy of which you can download below. The fund posted a return of 0.79% for the quarter, outperforming its benchmark, the S&P Small Cap 600 Index which returned -32.65% in the same quarter. You should check out Palm Valley Capital’s top 5 stock picks which helped them beat the market by nearly 33 percentage points. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.
In the said letter, Palm Valley Capital highlighted a few stocks and Amdocs Ltd (NASDAQ:DOX) is one of them. Amdocs is a software and services provider to communications and media companies. Year-to-date, DOX stock lost 13.2% and on May 19th it had a closing price of $61.68. Here is what Palm Valley Capital said:
“We also sold Amdocs (DOX) at our valuation early in the quarter and repurchased it after the stock declined to a discount. Amdocs is currently the Fund’s largest holding. The stock fell meaningfully this quarter despite the firm’s historically resilient recurring revenue business model and its excellent balance sheet, with zero debt and nearly $500 million of cash.”
In Q4 2019, the number of bullish hedge fund positions on DOX stock remained unchanged from the previous quarter (see the chart here).
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Disclosure: None. This article is originally published at Insider Monkey.