Jackson Peak Capital, an investment management firm, released its third quarter 2023 investor letter, a copy of which can be downloaded here. Jackson Peak performed exceptionally well in Q3, delivering a robust +11.8% return. Despite the challenging market conditions, Jackson Peak’s alternative, long-short investment strategy proved successful, securing notable wins in each segment of the portfolio—core longs, special situations, and alpha shorts. Additionally, the portfolio received a smaller yet beneficial boost from reducing net exposure and implementing macro hedges in anticipation of an increase in long-term interest rates, a move that paid off as long-term interest rates rose and equity indices declined. Take a moment to review the fund’s top 5 holdings to gain insights into their primary investment choices for 2023.
In its Q3 2023 investor letter, Jackson Peak Capital mentioned Spirit Airlines, Inc. (NYSE:SAVE) and explained its insights for the company. Spirit Airlines, Inc. (NYSE:SAVE) is a Miramar, Florida-based ultra-low-cost airline with a $1.35 billion market capitalization. Spirit Airlines, Inc. (NYSE:SAVE) delivered a -36.19% return since the beginning of the year, while its 12-month returns are down by -42.82%. The stock closed at $12.43 per share on November 17, 2023.
Here is what Jackson Peak Capital has to say about Spirit Airlines, Inc. (NYSE:SAVE) in its Q3 2023 investor letter:
“The case that is top-of-mind in Q4/Q1 is JetBlue/Spirit Airlines (SAVE) vs. DOJ. We will be following the trial closely as it progresses in October and November. Post-Q3, we acquired a position in SAVE calls in late October after they plummeted in value post-earnings and in the days leading up to the trial. Depending on our read of how the trial progresses, we will scale the position up (it is a subscale position today) or down. This arb is a lower probability than the Activision deal (note: it is a horizontal merger after all, not a vertical merger), but we think the market is mispricing the potential likelihood of success. The significant spread results in a position with substantial positive expected value in our view, particularly when structured via options and position size managed judiciously.”
Our calculations show that Spirit Airlines, Inc. (NYSE:SAVE) does not belong on our list of the 30 Most Popular Stocks Among Hedge Funds. We also mentioned Spirit Airlines, Inc. (NYSE:SAVE) in another article. Spirit Airlines, Inc. (NYSE:SAVE) was in 26 hedge fund portfolios at the end of the second quarter of 2023, compared to 25 funds in the previous quarter. Spirit Airlines, Inc. (NYSE:SAVE) delivered a -25.43% return in the past 3 months. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters Q3 2023 page.
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Disclosure: None. This article is originally published at Insider Monkey.