Artko Capital, an asset management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. For the fourth calendar quarter of 2021, an average partnership interest in Artko Capital LP was down 3.4% net of fees. At the same time, investments in the most comparable market indexes—Russell 2000, Russell Microcap, and the S&P 500—were up 2.1%, down 2.7%, and up 8.6%, respectively. For the calendar year of 2021, an average partnership interest in Artko Capital LP was up 19.4% net of fees. At the same time, investments in the aforementioned market indexes were up 14.8%, 19.3%, and 28.7%, respectively. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Artko Capital, in its Q4 2021 investor letter, mentioned US Ecology, Inc. (NASDAQ:ECOLW) and discussed its stance on the firm. Founded in 1952, US Ecology, Inc. (NASDAQ:ECOLW) is a Boise, Idaho-based hazardous waste treatment and disposal company that is currently spearheaded by its CEO, Jeff Feeler. US Ecology, Inc. (NASDAQ:ECOLW) delivered a -27.27% return since the beginning of the year, while its 12-month returns are down by -62.37%. The stock closed at $4.00 per share on March 18, 2022.
Here is what Artko Capital has to say about US Ecology, Inc. (NASDAQ:ECOLW) in its Q4 2021 investor letter:
“US Ecology 10/23 $58.67 Warrants (ECOLW) – 6% of Portfolio; $4.50 cost basis/$4.50 current price
We have had a wild ride over the last three years in holding the warrants from NRC Group, a specialty waste management company, which was later acquired by a bigger specialty waste management competitor, US Ecology. As a result of the acquisition, our warrants converted into warrants of US Ecology with the same expiration date. We have liked the US Ecology business, though unfortunately as the Covid scare hit the world in 2020, the business took a sharp downswing and never recovered to the levels we were originally expecting. The stock continued to get battered, along with the small cap indexes, to below $30.00 per share, and on February 9th, 2022, Republic Services announced the acquisition of US Ecology at $48.00 per share. While this acquisition is significantly below the strike price, and a higher, but unlikely to be above $58.67, bid may yet emerge, we exited a big part of the position soon after the announcement at an average price of $5.20. One of the reasons we were attracted to the warrants in the first place is because they had a “make whole” provision precisely for these types of events, an acquisition below the strike price, prior to expiration. This should result in a $4.00 to $5.00 price for the rest of our position at deal close, though we may continue to exit in the market if the liquidity is there. While the end result is disappointing, and we are never happy with “dead money” for the amount of time and effort, we were happy to put an end to this chapter and begin to deploy the cash to new opportunities.”
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Our calculations show that US Ecology, Inc. (NASDAQ:ECOLW) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. US Ecology, Inc. (NASDAQ:ECOLW) delivered a -35.06% 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.