CynergisTek (CTEK), An Expensive Portfolio Management Lesson For Long Cast Advisers

Independent Investment management company Long Cast Advisers recently released its second-quarter 2022 investor letter. A copy of the same can be downloaded here. The fund is concentrated on long-term investment in small-cap companies. In the second quarter, the fund’s cumulative returns dropped 15%, which resulted in a 26% decline in the year-to-date returns. The most significant holdings of the portfolio underperformed and led to portfolio decline. For more information on the fund’s top picks in 2022, please check its top five holdings.

Long Cast Advisers mentioned CynergisTek, Inc. (NYSE:CTEK) in the letter and discussed its views about the company. Based in Austin, Texas, CynergisTek, Inc. (NYSE:CTEK) is cyber security compliance and privacy services providing company and has a market capitalization of $16.173 million. The stock of CynergisTek, Inc. (NYSE:CTEK) closed at $1.2200 per share on August 16, 2022. One-month return of CynergisTek, Inc. (NYSE:CTEK) was 2.52%, while its shares lost 34.76% of their value over the last 52 weeks.

Here’s what Long Cast Advisers specifically said about CynergisTek, Inc. (NYSE:CTEK)  in its Q2 2022 investor letter:

“In that vein, for the first time in many years, CynergisTek, Inc. (NYSE:CTEK) is no longer part of our portfolio. The company was long a source of opportunity, then frustration and now is a tax loss and an expensive lesson in portfolio management. Across the portfolio since inception, it is the largest drain on returns, with a negative contribution of 7% (but for some accounts it was materially higher).

The company announced in May that it is selling itself to privately held Clearwater Compliance for $18M, which is about 50% less than what Auxilio paid for then privately held CynergisTek (CTEK). There was a lot wrong with this investment and for the price we paid, I would like to wring every available lesson out of it. I wrote a letter to the Board, discussing their mistakes and mine. In that letter, I shared my honest reflection on what I did wrong”

Login Password Cybersecurity

 CynergisTek, Inc. (NYSE:CTEK) is not on the list of  30 Most Popular Stocks Among Hedge Funds. As per our database, CynergisTek, Inc. (NYSE:CTEK) was held by 4 hedge fund portfolios at the end of the first quarter, and 4 in the previous quarter.

We discussed CynergisTek, Inc. (NYSE:CTEK) in another article and shared the list of penny stocks with growth catalysts. For more investor letters from hedge funds and other prominent investors, you can check our hedge fund investor letters Q2 2022 page.

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

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