Legacy Ridge Capital Management, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. A net trailing 1-yr total return of 32.4% was recorded by the LRCP Equity Fund I for 2021, outperforming all its benchmarks, the S&P 500 Index that delivered a 28.7% return, the Russell 200 Index that was up by 14.8%, and the MSCI World Index which gained 22.4% for the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Legacy Ridge Capital Management, in its Q4 2021 investor letter, mentioned Summit Midstream Partners, LP (NYSE: SMLP) and discussed its stance on the firm. Summit Midstream Partners, LP is an Atlanta, Georgia-based growth-oriented master limited partnership with a $170.7 million market capitalization. SMLP delivered a 7.25% return since the beginning of the year, while its 12-month returns are up by 14.47%. The stock closed at $23.81 per share on February 22, 2022.
Here is what Legacy Ridge Capital Management has to say about Summit Midstream Partners, LP in its Q4 2021 investor letter:
“One of my biggest pet-peeves with respect to investment managers is an “error of omission” being a highlighted mistake—missing out on Amazon, Google, etc. In a profession where a 51% success rate can lead to exceptional results, everyone has legitimate mistakes—mistakes where money was lost, not just the lost opportunity cost of money.
SMLP was one of my bigger mistakes (lazy analysis and bad timing perpetuated by inertia) and has been a meaningful detractor to multi-year partnership performance, even despite the stock being up 78% last year. But what’s old can be new in investing as facts and prices change, and we think the stock has meaningful upside from here. To start with the conclusion: shares trade for ~$25 and we think fair value is over $75, suggesting 200%+ upside. The market cap is approximately $250 Million and the Enterprise Value about $1.7 Billion. Based on 2021 results SMLP trades at an EV/EBITDA multiple of 7x, a Free Cash Flow to Equity yield of 60%, and has 5x leverage.
As the name suggests, SMLP is a midstream energy company. Specifically, they own and operate Gathering and Processing assets in addition to a new long-haul natural gas pipeline called Double E…” (Click here to see the full text)
Investments, Finance
Our calculations show that Summit Midstream Partners, LP (NYSE: SMLP) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. SMLP was in 1 hedge fund portfolio at the end of the fourth quarter of 2021. Summit Midstream Partners, LP (NYSE: SMLP) delivered a -24.39% 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.
