Bonhoeffer Capital Management, an asset management company, released its third-quarter investor letter. A copy of the same can be downloaded here. In the third quarter, the fund returned -13.7% net of fees, compared to a -10.0% return for its closest benchmark DFA International Small Cap Value Fund, and a -10.9% return for the broad-based index, the MSCI World ex-US. In addition, please check the fund’s top five holdings to know its best picks in 2022.
Bonhoeffer Capital Management highlighted stocks like Millicom International Cellular S.A. (NASDAQ:TIGO) in its Q3 2022 investor letter. Headquartered in Luxembourg, Millicom International Cellular S.A. (NASDAQ:TIGO) is a cable and mobile services provider. On December 12, 2022, Millicom International Cellular S.A. (NASDAQ:TIGO) stock closed at $13.46 per share. One-month return of Millicom International Cellular S.A. (NASDAQ:TIGO) was 1.13%, and its shares lost 51.83% of their value over the last 52 weeks. Millicom International Cellular S.A. (NASDAQ:TIGO) has a market capitalization of $2.3 billion.
Bonhoeffer Capital Management made the following comment about Millicom International Cellular S.A. (NASDAQ:TIGO) in its Q3 2022 investor letter:
“Millicom International Cellular S.A. (NASDAQ:TIGO) is a Latin American telecommunications firm that provides high-speed internet, cable, and wireless to nine markets. The firm has a #1 or #2 position in eight of these markets. TIGO is also in the process of separating both its towers business (about 10,000 towers) and its TIGO Money business for either sale or co-investment. Based upon historical tower sales by TIGO and comparable transactions and trading prices for Latin American tower businesses, we think the towers are worth about $1.4 billion or $8.00 per share. Given the current price of TIGO, the stub has an implied value of about 5.7x 2022 FCF or 1.5x projected 2026 FCF. Given the liquidity from recent rights offering, TIGO’s debt level is low, and the company will be in the position to buy back shares next year while continuing to invest in its fiber rollout. There is additional value outside the core business in TIGO’s data centers and TIGO Money (see our case study in the Q3 2021 letter). Given a conservative projected EPS growth of 10% per year (vs. the 25% projected FCF growth rate), TIGO should trade at 22x earnings using Graham’s formula of 8.5 + 2 * growth rate. Applying this multiple results in about a 2.5x return today and a 7x return in five years. Below is an updated value of TIGO’s equity given the rights offering, management’s current forecast to 2024, and no value for TIGO’s data centers or TIGO Money.”
Millicom International Cellular S.A. (NASDAQ:TIGO) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 8 hedge fund portfolios held Millicom International Cellular S.A. (NASDAQ:TIGO) at the end of the third quarter, which was 10 in the previous quarter.
We discussed Millicom International Cellular S.A. (NASDAQ:TIGO) in another article and shared Bonhoeffer Capital Management’s views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
