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 Alamos Gold Inc (NYSE:AGI) is one of them. Alamos Gold engages in the exploration, development, mining, and extraction of precious metals. Year-to-date, AGI stock gained 34.2% and on May 15th it had a closing price of $8.49. Here is what Palm Valley Capital said:
“Alamos Gold (AGI) is a Canadian-based gold producer with three operating mines in North America. We believe Alamos’s 9.7 million ounces of proven and probable gold reserves are selling at a discount to our calculated replacement valuation. Furthermore, we are attracted to the company’s debt-free balance sheet and its ability to generate free cash flow at current gold prices. As global central banks aggressively expand their balance sheets, we are comforted owning Alamos’s high-quality tangible assets.”
In Q4 2019, the number of bullish hedge fund positions on AGI stock remained unchanged from the previous quarter (see the chart here).
Disclosure: None. This article is originally published at Insider Monkey.