In his recent annual letter to fund partners, Kase Capital’s Whitney Tilson disclosed the fund’s top holdings going into 2015. Big names disclosed in the letter include Avis Budget Group CAR 0.22%, Micron Technology, Inc. MU 0.94% and Berkshire Hathaway Inc (NYSE: BRKA) (NYSE: BRKB). However, among the big names in the funds top 12 holdings was Tetragon Financial TGONF, a stock that is not even listed on a major U.S. exchange.
In the letter, Tilson specifically addressed his bullish stance on this “oddball” stock.
What Is Tetragon Financial?
Tetragon is a global alternative-investment company domiciled in Guernsey, a small island in the English Channel. The company invests mostly in U.S.-based loans and assets, primarily collateralized loan obligations (CLOs).
Tilson acknowledged that Tetragon has virtually no coverage by analysts in America. In addition, the stock doesn’t have a listing on a major U.S. stock exchange. However, even its primary listing on the Euronext Amsterdam exchange is extremely illiquid, averaging less than $500,000 worth of volume per day for the $1 billion-plus company.
Too Good Of A Value To Pass Up
Despite the company’s low profile, Tilson feels that the value that the stock offers is too good to pass up. “The investment thesis for Tetragon is quite simple,” Tilson explained in the letter. “Its stock trades at half its intrinsic value, which is fairly straightforward to calculate, and that value is growing steadily.”
Although Tilson concedes that Tetragon is “one of the more oddball stocks I’ve ever purchased,” he believes that the strength of the company’s current assets coupled with management’s strong investment track record will lead the stock much higher in coming years.
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