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Alluvial Capital Management, LLC, an investment management firm, published its fourth-quarter 2020 Investor Letter – a copy of which can be downloaded here. A return of 28.4% was recorded by the fund for the year end 2020, outperforming the Russell MicroCap TR that returned 21%, its Russell 2000 benchmark that delivered a 20%. return, and its MSCI World Sm+MicroCap NR index with 16%. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
Alluvial Capital Management, in their Q4 2020 Investor Letter said that their investment in Crawford United Corporation (NYSE: CRAWA) went up because of the company's new acquisition of Komtek Forge. Crawford United Corporation is an investment holding company that currently has a $74.7 million market cap. For the past 3 months, CRAWA delivered a 41.33% return and settled at $19.85 per share at the closing of February 2nd.
Here is what Alluvial Capital Management has to say about Crawford United Corporation in their investor letter:
"Crawford United also treaded water in 2020 with shares ending the year slightly below where they began it. COVID-19 walloped demand for the company’s aerospace components, but the company’s air handling and hose divisions picked up much of the slack. The marine industry has been hot with people choosing to social distance on lakes and rivers. Crawford’s Marine Products, despite the slowdown, Crawford remains well-financed and on the hunt for new investments. In September, Crawford participated in a capital raising by fellow industrial company AmpcoPittsburgh. While small, the investment has already performed well for Crawford. Just days ago, Crawford announced the acquisition of Komtek Forge, a Massachusetts metal-working shop producing high specification products. The acquisition adds $7 million in revenue and will increase earnings immediately.
Shares of Crawford United are up on news of the acquisition. Despite the increase, shares still trade at less than 8x my estimate of normalized earnings. I expect the company to perform numerous additional acquisitions on attractive terms. As I have written before, there are thousands of unglamorous but profitable niche industrial companies, many lead by founders seeking to sell or retire. Crawford will not soon run out of places to employ its capital."
CRAWA delivered a 12.50% return in the past 12 months. However, our calculations show that Crawford United Corporation (NYSE: CRAWA) does not belong in our list of the 30 most popular stocks among hedge funds.
The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.
Video: Top 5 Stocks Among Hedge Funds
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