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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Cedar Creek Partners 2024 Q1 Investor Letter | Buyside Digest

Back to Fund Profile (Cedar Creek Partners)

Primary Source Intelligence • Q1 2024 Letter Analysis

Cedar Creek Partners Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Cedar Creek Partners. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD+2.4%

Annualized+15.2%

Digest Analysis

Quick Take

"Key holding ENDI Corp surged 60%+ as the asset manager expanded AUM to $2.9 billion. Portfolio trades at 7.9x forward earnings with expert market exposure at 28%."

Executive Summary

Cedar Creek Partners delivered 2.4% net returns in Q1 2024, underperforming major indices as microcap stocks lagged the broader market rally led by large-cap technology companies. The fund maintains its focus on undervalued microcap and OTC securities, with holdings trading at attractive valuations of 7.9 times forward earnings and 1.6 times book value. Manager Tim Eriksen deployed capital during the quarter, reducing cash from 7% to 3% while adding to positions in ENDI Corp and Saker Aviation. The portfolio's expert market exposure decreased to 28% due to price declines in key holdings including Propel Media, PD-Rx Pharmaceuticals, and Pacific Coast Oil Trust. ENDI Corp emerged as a key success story, rising from $4 to over $6.50 per share as the asset management company expanded its AUM from $1.5 billion to $2.9 billion through strategic acquisitions. Despite near-term underperformance, the fund's 18-year track record of 14.4% annualized returns demonstrates the long-term effectiveness of its concentrated value approach in the microcap space.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

78%

CautiousHigh

High Conviction (78%)

High conviction evidenced by concentrated portfolio with detailed analysis of individual holdings, specific price targets for ENDI Corp ($8.35-$10 fair value), and manager's significant personal involvement as CEO/Chairman of multiple portfolio companies. Fund owns 33% of PharmChem and over 5% of Saker Aviation, demonstrating strong conviction in specific names.

Growth Outlook

25%

BearishBullish

Bearish (25%)

Manager acknowledges that smaller companies lagged in Q1 and major indices had a strong start, but maintains constructive view on microcap opportunities. No explicit bearish or bullish market commentary, with focus remaining on bottom-up stock selection rather than macro outlook.

Risk Appetite

40%

DefensiveAggressive

Defensive (40%)

Cash levels decreased from 7% to 3% showing moderate deployment activity, and manager increased holdings in ENDI and Saker Aviation. However, expert market exposure decreased due to price declines, and overall positioning remains cautious with concentrated focus on specific undervalued names.

Capital Deployment

40%

De-riskingDeploying

Net Neutral (40%)

Cash decreased from 7% to 3% representing a 4 percentage point reduction, indicating moderate deployment activity. Manager increased holdings in ENDI Corp and Saker Aviation along with other smaller positions, showing selective capital deployment into existing high-conviction names.

Forward Guidance

30%

CautiousExpansionary

Cautious (30%)

Manager states there is room for new members and additional funds, noting they continue to have more attractive ideas than capital. This suggests selective deployment bias but no aggressive scaling plans. Guidance is mildly constructive but measured.

Language Signal

35%

BearishBullish

Bearish (35%)

Language focuses on attractive valuations, undervalued securities, and specific opportunities like ENDI Corp's growth prospects. However, balanced by acknowledgment of challenges in expert market liquidity and regulatory constraints. More opportunity-focused than risk-focused but not overwhelmingly bullish.

Perceived Risk

45%

Low RiskElevated

Moderate Risk (45%)

Manager acknowledges specific risks around expert market liquidity constraints and valuation challenges in illiquid OTC markets, citing the Propel Media pricing issue as an example. However, risks are presented as manageable operational challenges rather than systemic threats, with moderate risk awareness overall.

Opportunity Density

65%

ScarceAbundant

Abundant (65%)

Manager explicitly states they continue to have more attractive ideas than capital and there is plenty of room for existing partners to increase investments. This suggests a reasonably rich opportunity set in the microcap space, though selectivity is emphasized given the specialized nature of the strategy.

Time Horizon

75%

Short-TermLong-Term

Decade+ (75%)

Fund demonstrates multi-year investment horizon with 18+ year track record and patient approach to illiquid microcap investments. Manager discusses ENDI Corp's value growing $0.25 per share quarterly and provides year-end fair value estimates, indicating 2-3 year thesis timeframes with willingness to hold through volatility.