Here’s Why Silver Ring Value Partners Exited Qurate Retail (QRTEA)
Silver Ring Value Partners, an investment management company, released its fourth quarter 2023 investor letter. A copy of the same can be downloaded here. 2023 was a challenging year for the partnership concerning performance and returned -15.1% gross and -15.6% net compared to 25.9% for the Russell 3000 Index and 24.4% for the MSCI World Index. The firm is quite optimistic about the partnership's promising long-term future. You can check the top 5 holdings of the fund to know its best picks in 2023.
Silver Ring Value Partners featured stocks such as Qurate Retail, Inc. (NASDAQ:QRTEA) in the fourth quarter 2023 investor letter. Headquartered in Englewood, Colorado, Qurate Retail, Inc. (NASDAQ:QRTEA) is involved in the video and online commerce industries. On February 16, 2024, Qurate Retail, Inc. (NASDAQ:QRTEA) stock closed at $1.04 per share. One-month return of Qurate Retail, Inc. (NASDAQ:QRTEA) was 23.82%, and its shares lost 54.59% of their value over the last 52 weeks. Qurate Retail, Inc. (NASDAQ:QRTEA) has a market capitalization of $445.691 million.
Silver Ring Value Partners stated the following regarding Qurate Retail, Inc. (NASDAQ:QRTEA) in its fourth quarter 2023 investor letter:
"Qurate Retail, Inc. (NASDAQ:QRTEA): I let our remaining call options expire in January, and have not replaced them. The company is now a turnaround that is dealing with a stretched balance sheet and a potential recession. I have not yet been able to discern material evidence that the turnaround is already succeeding. Meanwhile, if the cycle were to occur sooner and be deeper than currently expected, the equity would quickly become worthless.
It's tempting to double-down on one’s bets especially when there is such a huge amount of upside if the company is able to turn itself around and avoid bankruptcy. After all, there is still the chance of the equity being worth $10+ vs. the under $1 share price. However, merely being lured by the large upside is a mistake – lottery tickets also have huge upside relative to the price paid, but they are known for their negative expected value. At this point I don’t have any differentiated insights that would allow me to assign probabilities better than the market to the various scenarios, and so I am going to avoid gambling and pass.
I will keep monitoring the situation and if there are signs that the turnaround is succeeding, I would be happy to revisit my decision even at a much higher price. In turnarounds, the best expected return is usually obtained when the odds have shifted in the company’s favor even if the upside has been reduced."
A customer selecting the perfect item on an Internet shopping platforms with a mobile device in hand.
Qurate Retail, Inc. (NASDAQ:QRTEA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 24 hedge fund portfolios held Qurate Retail, Inc. (NASDAQ:QRTEA) at the end of fourth quarter which was 19 in the previous quarter.
We discussed Qurate Retail, Inc. (NASDAQ:QRTEA) in another article and shared Weitz Investment Partners III Opportunity Fund's views on the company in the previous quarter. In addition, please check out our hedge fund investor letters Q4 2023 page for more investor letters from hedge funds and other leading investors.
Suggested Articles:
Disclosure: None. This article is originally published at Insider Monkey.
