In what was a rough month for small and microcap names, my 2021 Double Net Value Portfolio fell about 8% and is up just over 25% since inception. The portfolio is still outperforming the Russell 2000 Index (up 18.5%) and trailing the Russell Microcap Index (up 27%). It is trailing the Russell 2000 Value Index (up 25.8%) and Russell Microcap Value Index (up 31.8%).
Double Net Value is a tracking portfolio I build every year that is comprised of companies that have the following attributes:
- Companies trade at between 1 and 2 times net current asset value (NCAV)
- Minimum market cap $75 million
- No development stage pharmaceuticals/biotechs
Since the March update, five names fell back into negative territory including Adams Energy (AE) (down 4% since inception), Dril-Quip (DRQ) (down 7%), Gencor (GENC) (down 5%), Key Tronic (KTCC) (down 3%), and VirnetX Holdings (VHC) (down 5%). VHC was the worst performer from that group, falling 24% over the month after losing an appeals court ruling in a patent case against Apple (AAPL) .
The top performer so far remains footwear name Rocky Brands (RCKY) (up 100%) which padded its lead after rising 18% during the month, and continues to trade near its all-time high. Amtech Systems (ASYS) (up 74%) is the second-best performer despite giving back 10% over the month. Acacia Research (ACTG) (up 59%) rounds out the top three.
Here are the remaining names, and performance to date:
Avnet (AVT) : up 40%
FutureFuel (FF) : up 11%
Tutor Perini (TPC) : up 32%
Aware (AWRE) : up 1%
Crimson Wine Group (CWGL) : up 36%
Lakeland Industries (LAKE) : up 27%
Powell Industries (POWL) : up 25%
NOW Inc (DNOW) : up 54%
Hurco (HURC) : up 4%
Network 1 Technologies (NTIP) : up 4%
While absolute performance is still good, the true mark of success in my view, would be outperformance of both the Russell 2000 Index, and especially the Russell Microcap Index; the large majority of names in the portfolio are microcaps.
Enjoy your weekend!