The Joint Corp. (JYNT): Alta Fox Capital Management’s Latest Thoughts

“The Joint Corp. (JYNT)

JYNT was the company I researched most fervently in the months leading up to the fund’s April 2018 launch. I was enamored with their business model, the turnaround under a new CEO, and the attractive unit economics. I visited the company’s headquarters in Scottsdale, met with the CEO and CFO, and was prepared to make JYNT the fund’s largest position at launch.

However, in the two weeks prior to the launch of the fund, JYNT’s share price increased ~30%, dampening my enthusiasm to build a position in size after such a large rally. However, I continued to follow the company and dug deeper into the industry and unit economics.

The sell-off at the end of 2018 hit small-caps particularly hard and JYNT fell from ~$9 to $7 per share. This selloff was despite better than expected operating performance and execution. We took advantage of what seemed like indiscriminate selling in JYNT to make it our largest position in the fund with a cost basis in the mid $7.00’s. While we had confidence in the long-term thesis, we also had conviction in a short-term catalyst (namely 2019 performance/guidance). The stock more than doubled from our cost basis in Q1. Like TPNL, we remain long JYNT given our long-term conviction in the business model, though we have somewhat trimmed the position on significant strength.”

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The Joint Corp. is a company that runs a plethora of chiropractic clinics, operating through two segments – Franchise Operations and Corporate Clinics. Since the beginning of the year, its shares gained 111.88%, having a closing price on May 8th of $17.65. The company’s market cap is of $243.31 million while trading at a P/E ratio of 928.95.

At Q4’s end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, same as in the previous quarter. By comparison, 3 hedge funds held shares or bullish call options in JYNT a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Bandera Partners held the most valuable stake in The Joint Corp. (NASDAQ:JYNT), which was worth $10.9 million at the end of the third quarter. On the second spot was Nantahala Capital Management which amassed $9.4 million worth of shares. Moreover, Skylands Capital, Renaissance Technologies, and Marshall Wace LLP were also bullish on The Joint Corp. (NASDAQ:JYNT), allocating a large percentage of their portfolios to this stock.

Dislcosure: None.
This article is originally published at Insider Monkey.