Palm Valley Capital Management, an investment management firm, released the “Palm Valley Capital Fund” fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. In the fourth quarter, Palm Valley Capital Fund declined -0.09% outperforming the -0.58% decline in the S&P SmallCap 600 and slightly underperforming the 0.32% gain in the Morningstar Small Cap Total Return Index. The Fund faced losses on certain equity positions, but these were partly balanced out by gains from Treasury bill holdings. During the quarter the equity positions in the Fund reduced by 3.6%. Cash equivalents comprised 78% of the fund’s assets at the period’s end. In addition, please check the fund’s top five holdings to know its best picks in 2024.
Palm Valley Capital Fund highlighted stocks like Seaboard Corporation (AMEX:SEB), in the fourth quarter 2024 investor letter. Seaboard Corporation (AMEX:SEB) is a global agricultural and ocean transportation company. The one-month return of Seaboard Corporation (AMEX:SEB) was -6.47%, and its shares lost 33.23% of their value over the last 52 weeks. On January 6, 2025, Seaboard Corporation (AMEX:SEB) stock closed at $2,423.90 per share with a market capitalization of $2.354 billion.
Palm Valley Capital Fund stated the following regarding Seaboard Corporation (AMEX:SEB) in its Q4 2024 investor letter:
“We acquired three new positions during the fourth quarter: Kelly Services (ticker: KELYA), Seaboard Corporation (AMEX:SEB), and Heartland Express (ticker: HTLD). Seaboard is a diversified global commodity-focused company that was founded in 1918 as a flour broker and miller. The firm is now engaged in hog production and pork processing, commodity trading and grain handling, cargo shipping, renewable diesel production, electric power generation, and sugar and alcohol production. Operations extend from the U.S. to Africa, South America, and the Caribbean—regions management deemed less competitive. Seaboard also owns 52.5% of Butterball, the leading turkey brand.
Seaboard is a diversified global commodity-focused company that was founded in 1918 as a flour broker and miller. The firm is now engaged in hog production and pork processing, commodity trading and grain handling, cargo shipping, renewable diesel production, electric power generation, and sugar and alcohol production. Operations extend from the U.S. to Africa, South America, and the Caribbean—regions management deemed less competitive. Seaboard also owns 52.5% of Butterball, the leading turkey brand.
Management has done a commendable job of building the net asset value per share of Seaboard over the years by reinvesting cash flows in its varied operations. In 2020, third-generation CEO Steven Bresky died suddenly, and for the first time, a non-family member was appointed to lead Seaboard. Since then, the Bresky family has sold a significant amount of their personal stakes back to the company. This, along with industry pressures on hog raising margins and Seaboard’s substantial investments in renewable fuel projects which have yet to pay off, has weighed on the share price. The stock trades at a decade low and for approximately 50% of tangible book value. Given improvement in the hog profit cycle, we believe SEB has a catalyst to move toward our valuation.”
A farmer holding a handful of freshly harvested pork in a barnyard.
Seaboard Corporation (AMEX:SEB) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held Seaboard Corporation (AMEX:SEB) at the end of the third quarter which was 22 in the previous quarter. While we acknowledge the potential of Seaboard Corporation (AMEX:SEB) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Seaboard Corporation (AMEX:SEB) and shared the list of biggest agricultural companies in the US. In addition, please check out our hedge fund investor letters Q3 2024 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.