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Here’s Why MMA Capital (MMAC) Stock is an Attractive Pick for Investors

Alex Smith
·4 mins read

Nomadic Value Investment Partners recently released its Q2 2020 Investor Letter, a copy of which you can download here. The investment firm supports enterprising individuals and families in achieving respectable long-term investment performance. You should check out Nomadic Value's top 5 stock picks for investors to buy right now, which could be the biggest winners of the stock market crash.

In the said letter, Nomadic Value highlighted a few stocks and MMA Capital Holdings Inc. (NASDAQ:MMAC) is one of them. MMA Capital Holdings Inc. (NASDAQ:MMAC) is a portfolio management company. Year-to-date, MMA Capital Holdings Inc. (NASDAQ:MMAC) stock lost 13.2% and on August 14th it had a closing price of $27.64. Here is what Nomadic Value said:

"We topped up MMA Capital (ticker: MMAC), a utility-scale solar development mezzanine lender, as we believe the share price sold off from COVID fears but has remained depressed due to market technicals. Our observations this quarter confirm there’s more demand for short-term debt capital than before COVID. The reason is project delays around permitting, product procurement, and construction site safety. Naturally, developers need more capital and pay more interest when it takes longer to complete a project. Developments targeted for completion in 2020 and 2021 are fully baked at this point, and our understanding is that utilities are working diligently to follow through on their grid interconnection commitments. The potential issue for MMAC is a slowdown of projects originally planned to begin construction in 2021/2022. These projects are in Power Purchase Agreement negotiation and utility permitting phases today. As with any industry right now, the lack of human interaction slows progress for anything coming new to the physical world, and we could see a negative ripple throughout utility scale developments. Additionally, given “contract risk” introduced to the 2021/2022 vintage developments, the cost of capital for developers has increased, even while it has decreased for completed projects selling into infrastructure funds. MMAC could see higher interest loans as a result, somewhat buffering a potential decrease in volume. On balance we think it’s hard to predict right now what will happen to the 2021/2022 vintage, but ultimately we are betting this will be isolated and temporary and we’ve likely already seen the worst of it – even as COVID gets worse. The solar industry is impressively resilient14 and today it is the most competitive source of energy in many electricity markets. Projects are going to get planned, financed, and built."

Earlier this month, we published an article revealing that Alluvial Capital Management is bullish about MMA Capital Holdings Inc. (NASDAQ:MMAC) stock. The investment firm believes that the stock should trade somewhere in the upper $30s, much closer to book value.

Our calculations showed that MMA Capital Holdings Inc. (NASDAQ:MMAC) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 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

At Insider Monkey we scour multiple sources to uncover the next great investment idea. Cannabis stocks are roaring back in 2020, so we are checking out this under-the-radar stock. We go through lists like the 10 most profitable companies in America to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. You can subscribe to our free enewsletter below to receive our stories in your inbox:

Disclosure: None. This article is originally published at Insider Monkey.