180 Degree Capital (TURN) - 2021 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a nearly 15% growth in NAV, reaching $10.60, the highest in over six years, driven by a 28% gain in public company investments [5][8][13] - A gain of $16.5 million was achieved in public and liquid securities, with cash and liquid securities equaling the share price [6][10] - Operating expenses decreased to approximately $919,000 for Q1 2021, down from an average of $1.3 million per quarter in 2016 [44][45] Business Line Data and Key Metrics Changes - The private portfolio decreased in value by $1.5 million, representing just 33% of the business, the lowest since the company's inception [7][39] - Public portfolio gains contributed $1.59 per share, while private portfolio losses accounted for $0.13 per share [13][14] Market Data and Key Metrics Changes - The company experienced a 28.3% gain in its liquid portfolio, with significant contributions from various sectors, particularly technology and industrials [15][29] - The technology sector accounted for a third of the performance, while industrials contributed 25% to the overall return [28][29] Company Strategy and Development Direction - The company has shifted its focus to public market investing, reducing reliance on private holdings, which has led to improved performance [10][33] - The management aims to continue growing the public portfolio and is optimistic about reaching $200 million in assets over the next five years [82][84] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of investments, particularly in sectors like construction and technology, as economies reopen [19][29] - The company is focused on creating shareholder value and is optimistic about future monetization events from its private portfolio [42][49] Other Important Information - The company has successfully streamlined operations and reduced costs, enhancing its financial health [36][44] - The management team has emphasized the importance of cash and liquid securities in driving the company's valuation [10][11] Q&A Session Summary Question: Future milestone payments from direct ownership and Petra - Management discussed the potential for receiving milestone payments, with the first payment likely dependent on a drug entering Phase 1 testing [53][54][56] Question: Delta increases in public portfolio - Management confirmed that the public portfolio had seen increases, aligning with the analyst's estimates [61][63] Question: Focus on materials and energy sectors - Management indicated that while they are not currently focused on energy, they are open to exploring opportunities in that sector if value is identified [66][67] Question: Long-term vision for the company - Management shared their vision for the company to reach $20 per share based on a projected $200 million in assets, emphasizing the importance of continued performance and potential monetization of private holdings [84][88]