Palm Valley Capital recently released its Q1 2020 Investor Letter, a copy of which you can download below. The fund posted a return of 0.79% for the quarter, outperforming its benchmark, the S&P Small Cap 600 Index which returned -32.65% in the same quarter. You should check out Palm Valley Capital’s top 5 stock picks which helped them beat the market by nearly 33 percentage points. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.
In the said letter, Palm Valley Capital highlighted a few stocks and Osisko Gold Royalties Ltd (NYSE:OR) is one of them. Osisko Gold Royalties operates as an intermediate precious metal company. Year-to-date, OR stock gained 7.4% and on May 18th it had a closing price of $9.80. Here is what Palm Valley Capital said:
“Osisko Gold Royalties (OR) is the fourth largest precious metals royalty and streaming company. Its cornerstone asset is a gold royalty on the Canadian Malartic mine in Quebec. The firm has a greater percentage of its portfolio in North America than any of its top peers, which reduces political risk. We purchased the shares at just over 10x trailing cash flow and at a discount to NAV based on current metals prices. Our Osisko investment should be a diversified, cash-generative way for us to express our fondness for precious metals in this environment.”
In Q3 2019, the number of bullish hedge fund positions on OR stock increased by about 8% from the previous quarter (see the chart here), so a number of other hedge fund managers seem to agree with OR’s growth potential.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. You can subscribe to our free enewsletter below to receive our stories in your inbox:
Disclosure: None. This article is originally published at Insider Monkey.