Ravensource Fund, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. Ravensource Fund’s (“Ravensource” or the “Fund”) net asset value (“NAV”) per unit increased by 11.9% over 2021, including distributions received by investors. As the fund invests in underfollowed and unloved opportunities, Ravensource’s investments can be particularly exposed to temporary market losses during flights to quality. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.
Ravensource Fund, in its Q1 2022 investor letter, mentioned Dundee Corporation (NYSE:DDEJ) and discussed its stance on the firm. Founded in 1984, Dundee Corporation (NYSE:DDEJ) is a Toronto, Canada-based independent holding company with a $93.1 million market capitalization, and is currently spearheaded by its CEO, Jonathan Goodman. Dundee Corporation (NYSE:DDEJ) delivered a -3.95% return since the beginning of the year, while its 12-month returns are down by -6.41%. The stock closed at $1.09 per share on April 13, 2022.
Here is what Ravensource Fund has to say about Dundee Corporation (NYSE:DDEJ) in its Q1 2022 investor letter:
“Dundee’s Series 3 preferred shares generated an 11.2% return in 2021, increasing the value of your Ravensource investment by 1.7%. Dividends received accounted for just over 50% of the gain, while the price of our securities increased from $18.28 to $19.28 as Dundee continued to sell its legacy non-core assets over the course of the year, further de-risking our investment.
The company – and our investment – is now in the final phase of its transformation it began in 2019 to re-align its capital structure to its asset base. With the proceeds of its asset sales in 2021, Dundee has the wherewithal – and more importantly, the economic incentive – to repurchase its preferred shares and complete this initiative of eliminating its leverage. This is made all the more pressing by management’s new focus on investing capital in risky junior mining companies. Thus the question remains: does the company / board of directors have the will and foresight to complete the de- risking of its balance sheet?
As we control approximately 50% of the Series 3 preferreds, at the right price, we can be Dundee’s one-stop solution. At the same time, sitting at the top of the capital structure, with Dundee having over $70 of assets backing each $25 preferred, our margin of safety is significant.”
Photo by Ricardo Gomez Angel on Unsplash
Our calculations show that Dundee Corporation (NYSE:DDEJ) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. Dundee Corporation (NYSE:DDEJ) delivered a -4.78% return in the past 3 months. 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.