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 United Guardian Inc (NASDAQ:UG) is one of them. United-Guardian manufactures personal care ingredients, pharmaceutical products, and specialty ingredients. Year-to-date, UG stock lost 24.2% and on May 19th it had a closing price of $14.81. Here is what Palm Valley Capital said:
“United-Guardian (UG) manufactures and markets cosmetic ingredients, pharmaceuticals, and medical lubricants. Low-quality Asian competitors have undercut United’s cosmetics business, which provides lubricating ingredients for skin creams. This has been offset by rapidly growing sales of a new dosage of Renacidin, United’s main pharmaceutical product. United is conservatively managed and has strong margins, ample cash, and no debt.”
In Q3 2019, the number of bullish hedge fund positions on UG stock remained unchanged from the previous quarter (see the chart here).
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Disclosure: None. This article is originally published at Insider Monkey.