Is Ramaco Resources (METC) A Smart Long-Term Buy?

Horos Asset Management, an investment management firm, published its third-quarter 2021 investor letter – a copy of which can be downloaded here. Horos Value Internacional gained 3.5% over the quarter and is up 33.6% in 2021, compared to 1.2% and 17.3%, respectively, in its benchmark index. Horos Value Iberia gained 1.7% over the quarter and is up 20.4% for the year, beating the gains of 1.4% and 11.3%, respectively, of its benchmark. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

Horos Asset Management, in its Q3 2021 investor letter, mentioned Ramaco Resources, Inc. (NASDAQ: METC) and discussed its stance on the firm. Ramaco Resources, Inc. is a Lexington, Kentucky-based metallurgical coal company with a $511.6 million market capitalization. METC delivered a 311.35% return since the beginning of the year, while its 12-month returns are up by 304.18%. The stock closed at $11.60 per share on December 20, 2021.

Here is what Horos Asset Management has to say about Ramaco Resources, Inc.  in its Q3 2021 investor letter:

“As mentioned above, we also initiated a position in Ramaco. The decision to invest in this U.S. metallurgical coal producer stems from our positive outlook for this commodity, given its supply and demand dynamics—which we have already explained in the past because of our Warrior investment. The company is in a phase of expansion of its production capacity, which could lead it to produce more than 4 million tons per year, compared to the current c. 2.5 million. It concentrates part of its production on customers in the United States, where its mines are located. Finally, unlike most listed coal mining companies, the Board and management team control more than 75% of the shares, so they are fully aligned with the rest of the shareholders. Although the upside is now much lower, following the rally that Ramaco had since investing at the beginning of the quarter, we believe that it is still attractive in the current market context.”

Based on our calculations, Ramaco Resources, Inc. (NASDAQ: METC) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. METC was in 12 hedge fund portfolios at the end of the third quarter of 2021, compared to 7 funds in the previous quarter. Ramaco Resources, Inc. (NASDAQ: METC) delivered a 16.35% return in the past 3 months.

Earlier this year, we published an article regarding METC being part of the 10 Best Coal Stocks to Buy Now. You can find more than 100 investor letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q3 page.

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