Rhizome Partners, an investment management company, released its third-quarter 2022 investor letter. A copy of the same can be downloaded here. In the third quarter, the fund generated a 4.8% net loss compared to a 4.9% loss for the S&P 500 Index and a 10.8% loss for the National Association of Real Estate Investment Trusts (NAREIT). The hedging efforts of the fund generated a gain of 2.9% during the quarter. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
Rhizome Partners highlighted stocks like Clarus Corporation (NASDAQ:CLAR) in its Q3 2022 investor letter. Headquartered in Salt Lake City, Utah, Clarus Corporation (NASDAQ:CLAR) is an outdoor equipment and lifestyle product distributor. On December 6, 2022, Clarus Corporation (NASDAQ:CLAR) stock closed at $8.05 per share. One-month return of Clarus Corporation (NASDAQ:CLAR) was -6.72% and its shares lost 70.25% of their value over the last 52 weeks. Clarus Corporation (NASDAQ:CLAR) has a market capitalization of $298.144 million.
Rhizome Partners made the following comment about Clarus Corporation (NASDAQ:CLAR) in its Q3 2022 investor letter:
“During the quarter, Clarus Corporation (NASDAQ:CLAR) experienced a gamma squeeze, whereby shares went from $20 to $28 in a span of two weeks. We quickly realized that the options outstanding exceeded the number of shares outstanding. A 40% return in two weeks in a bear market is a gift from the market. We quickly sold two-thirds of our position, wrote call options with a $30 strike price, and received a premium equal to 18% of the stock price. The expiration of the option was less than two months. Shares quickly collapsed as the gamma squeeze started to unwind, and shares now trade at $12. We also discovered that a Brazilian hedge fund and some volatility trading firms were responsible for the meteoric rise and subsequent collapse. We believe the Federal Reserve Board’s zero interest rate policies led to this type of speculation in options markets. Ironically, Federal Reserve Chair Jerome Powell’s hawkish speech at Jackson Hole appears to be what stopped the gamma squeeze. What the Fed giveth the Fed taketh away!”
Clarus Corporation (NASDAQ:CLAR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held Clarus Corporation (NASDAQ:CLAR) at the end of the third quarter, which was 18 in the previous quarter.
We discussed Clarus Corporation (NASDAQ:CLAR) in another article and shared Maran Capital’s views on the company. In addition, please check out our hedge fund investor letters Q3 2022 page for more investor letters from hedge funds and other leading investors.
Disclosure: None. This article is originally published at Insider Monkey.