Silver Ring Value Partners, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. At the end of the fourth quarter of 2021, the portfolio was very attractively priced, with the Price to Base Case value ratio at 54%. The portfolio had 15 investments plus hedges, cash at 1%, and option-adjusted net exposure at 71% at the end of the quarter. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Silver Ring Value Partners, in its Q4 2021 investor letter, mentioned Discovery, Inc. (NASDAQ: DISCK) and discussed its stance on the firm. Discovery, Inc. is a New York, New York-based mass media company with a $15.0 billion market capitalization. DISCK delivered a 29.87% return since the beginning of the year, while its 12-month returns are down by -30.51%. The stock closed at $29.74 per share on February 19, 2022.
Here is what Silver Ring Value Partners has to say about Discovery, Inc. in its Q4 2021 investor letter:
“How have Discovery (DISCK)’s fundamentals done since we initiated the investment in 2016 vs. your thesis?
At a very high level, my thesis on Discovery has been and is that the market is misconstruing it as a declining business, whereas I view it as a moderately growing business. The market views the ratings declines and Pay TV universe declines as implying that the company’s revenues should decline as well. I had disagreed and still do. I believe the market is misunderstanding how clients allocate their advertising spend and the resulting pricing power that the business has even in the face of declining volumes.
Starting in Q4 2016 and through Q3 of 2021, organic sales growth has averaged almost +4%. This is despite the cyclical pressure caused by COVID. It is also despite the large annual ratings declines and Pay TV universe declines, which have been substantial. So at a high level my thesis has so far been correct – the company has been a growing, rather than a declining, business as the stock market had been, and is, pricing in the stock…” (Click here to see the full text)
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Our calculations show that Discovery, Inc. (NASDAQ: DISCK) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. DISCK was in 32 hedge fund portfolios at the end of the third quarter of 2021, compared to 28 funds in the previous quarter. Discovery, Inc. (NASDAQ: DISCK) delivered a 20.26% return in the past 3 months.
In December 2021, we also shared another hedge fund’s views on DISCK in another article. 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.
