Rhizome Partners, an investment management firm, published its first-quarter 2022 investor letter – a copy of which can be downloaded here. For the first quarter of 2021, Rhizome Partners generated a net loss of 9.9% versus a 4.6% loss for the Standard & Poor’s 500 Index and a 5.3% loss for the National Association of Real Estate Investment Trusts (NAREIT) Index. Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Rhizome Partners mentioned The Howard Hughes Corporation (NYSE:HHC) and explained its insights for the company. Founded in 2010, The Howard Hughes Corporation (NYSE:HHC) is a The Woodlands, Texas-based real estate company with a $4.3 billion market capitalization. The Howard Hughes Corporation (NYSE:HHC) delivered a -17.34% return since the beginning of the year, while its 12-month returns are down by -22.27%. The stock closed at $84.13 per share on May 31, 2022.
Here is what Rhizome Partners has to say about The Howard Hughes Corporation (NYSE:HHC) in its Q1 2022 investor letter:
“After quickly buying back $250 million of shares recently, Howard Hughes Corporation authorized another $250 million share buyback. During the quarter, the company closed on the sale of the Chicago tower. Higher energy prices mean The Woodlands market is healthier. The company continues to deploy capital into development projects and has recently started to add medical and built-to-rent properties. This will diversify the product types and accelerate the conversion of land into cashgenerative buildings. Higher interest rates will negatively impact lot sales. But the dual forces of Sunbelt net migration and millennials reaching home-buying age will counter the effects of higher rates. This remains one of the most interesting tug-of-wars in the coming years. The company has become more transparent with valuation and its “unit economic” in development projects. This has made it easier for the buy-side to value the company and track the growth of net asset value (NAV) over time. Under the new leadership of David O’Reilly, the company has cut general and administrative expenses by $68 million, sold non-core assets, and increased investor outreach. If Howard Hughes continues to buy back shares after this new round of $250 million authorization, we will be more bullish on the stock, since each dollar of buy-back immediately creates 70-100% of value and removes sellers.”
Our calculations show that The Howard Hughes Corporation (NYSE:HHC) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. The Howard Hughes Corporation (NYSE:HHC) was in 24 hedge fund portfolios at the end of the first quarter of 2022, compared to 27 funds in the previous quarter. The Howard Hughes Corporation (NYSE:HHC) delivered a -11.83% return in the past 3 months.
Last month, we also shared another hedge fund’s views on The Howard Hughes Corporation (NYSE:HHC) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.