Alluvial Capital Management, an investment advisory firm, released its third-quarter 2024 investor letter. A copy of the letter can be downloaded here. The fund had a quiet third quarter rising 4.8%. Comparable indexes fared better with the Russell 2000 Index’s 9.8% return and the Russell MicroCap Index’s 9.9% return. Alluvial Fund had a net return of 15.7% year-to-date, which takes it above benchmarks. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.
Alluvial Capital Management highlighted stocks like Net Lease Office Properties (NYSE:NLOP) in the third quarter 2024 investor letter. Net Lease Office Properties (NYSE:NLOP) is a publicly traded real estate investment trust. The one-month return of Net Lease Office Properties (NYSE:NLOP) was 5.00%, and its shares gained 96.15% of their value over the last 52 weeks. On November 21, 2024, Net Lease Office Properties (NYSE:NLOP) stock closed at $31.09 per share with a market capitalization of $459.666 million.
Alluvial Capital Management stated the following regarding Net Lease Office Properties (NYSE:NLOP) in its Q3 2024 investor letter:
“Net Lease Office Properties (NYSE:NLOP) remains Alluvial Fund’s largest holding. In August, Net Lease sold one of its best properties for $71.5 million, allowing it to reduce its term loan balance to $74 million and its mezzanine loan to $81 million. Less than a year into its corporate existence, Net Lease Office Properties has reduced these loans by $300 million. The sale of just a few more choice properties will allow Net Lease to extinguish its corporate-level debt in full and begin the process of distributing cash to shareholders. I expect to receive the majority of our investment back in 2025. Net Lease shares remain very cheap. I calculate the REIT’s enterprise value at $615 million against net operating income of $94 million, a cap rate of 15.3%. On a price per square foot basis, the portfolio trades at $96. I continue to believe the remaining portfolio properties are worth $130 per square foot, or $45 per share net of debt.”
A wide-angle view of a high-rise office property with the REIT company’s logo in the foreground.
Net Lease Office Properties (NYSE:NLOP) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 17 hedge fund portfolios held Net Lease Office Properties (NYSE:NLOP) at the end of the third quarter which was 15 in the previous quarter. While we acknowledge the potential of Net Lease Office Properties (NYSE:NLOP) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we discussed Net Lease Office Properties (NYSE:NLOP) and shared the list of unstoppable stocks that could make you richer. Alluvial Capital Management discussed on Net Lease Office Properties’ (NYSE:NLOP) active property sales and significant debt reduction in its Q2 2024 investor letter. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.