SSRM - Palm Valley Capital Fund Q2 2021 Commentary

• The Palm Valley Capital Fund invests in small cap stocks. While our Fund is new, its underlying absolute return-based investment strategy is not. We have practiced the same strategy throughout our careers in investment management.
• For the second quarter ending June 30, 2021, the Palm Valley Capital Fund returned 1.16% versus 4.50% for the S&P SmallCap 600 and 4.23% for the Morningstar Small Cap Index.
• The underperformance versus benchmarks was due to the Fund’s cash position. Cash was 81.4% of Fund assets at the end of the quarter. The Fund’s equities returned 6.94% during the quarter.
• We sold Scholastic, Carters, EZCORP, and United-Guardian after the share prices exceeded our intrinsic value estimates.
• During the quarter we purchased Cabot Oil & Gas and Vidler Water Resources.

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