What happened during the month?
QRS Global was up 1.4% in August due to some shorts helping performance during the market correction, while the MSCI world in Euro was down 0.8%,. This brings ytd performance to 8.7% (MSCI World in Euro 15.2%) and 12 month performance to 18,4%. (MSCI 7.8%).
According to Kepler HF research (absoluteHedge.com) this makes QSR Global the 2nd best performing fund out of 87 over 12 months in the L/S Directional category.
QSR closed out the position in Ocado, after the stock rallied on takeover rumours already in July, making a 71% average return since I started to buy in mid-April this year (while averaging down initially).
QSR added to its Gold stocks and started a new position in Sibanye Stillwater a South African/US Platinum group of metals producer, with little debt and an 8% Dividend Yield, after the stock halved since January this year. We started the position small (1%) and are looking to add on further weakness.
The AMC pref vs ord position got converted in August (wrote about it in the February newsletter), so we are now long some AMC (3%) while hedged with short calls. As the implied volatility in AMC is 130%, and the calls pay a hefty premium this is still attractive. Although the fundamental value of AMC is much lower due to its high debt load and poor business outlook long-term, over the next 2 years the refinancing and cash burn are small and the stock could hang in there on this reduced level, while any rise should be met by issuance by the company as they need to issue shares in order to reduce the debt and this was the only reason for the conversion. So selling volatility at high levels makes sense to us. In August due to the tightness of the stock loan and the subsequent fall in ordinary shares (and less so – but still the preferreds) we made only a small amount of money, but we are nicely ahead in the AMC over the course of the year.
Factsheet QSR Global – August 2023