Lookback: RF Capital’s 2019 Joint Corp (JYNT) Thesis

Alex Smith
·3 min read

If you are looking for the best ideas for your portfolio you may want to consider some of RF Capital’s top stock picks. RF Capital, an investment management firm, is bullish on Joint Corp (NASDAQ:JYNT) stock. In its Q3 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Joint Corp (NASDAQ:JYNT) stock. Joint Corp (NASDAQ:JYNT) is franchisor and operator of chiropractic clinics.

In October 2019, RF Capital had released its Q3 2019 investor letter. The investment firm said that it trimmed its position in Joint Corp (NASDAQ:JYNT) stock in Q3 2019. The stock has posted a return of 35.3% in the trailing one year period, outperforming the S&P 500 Index which returned 15.1% in the same period. This suggests that the investment firm was right in its decision.

RF Capital fund posted a return of -6.98% in the third quarter of 2019, underperforming the S&P 500 Index which returned 1.87% in the same quarter. Let’s take a look at comments made by RF Capital about Joint Corp (NASDAQ:JYNT) in the Q3 2019 investor letter.

"The Joint Corp. (JYNT) – The Joint used to be a Top 5 position for us. However, we have trimmed our position considerably. While we still like the business, we believe fundamentals have gotten ahead of the valuation. The stock currently trades at 154.65x P/E and 71.55x EV/EBITDA, which are multiples any value investor would be uncomfortable with.

Despite reducing our position size, we will continue to hold onto our remaining shares until a better investment alternative comes along. Meanwhile, we will ride the positive momentum. We invested in JYNT at $4.95 per share. Shares have since gone up 4X."

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In Q1 2020, the number of bullish hedge fund positions on Joint Corp (NASDAQ:JYNT) stock remained unchanged from the previous quarter (see the chart here). Our calculations showed that Joint Corp (NASDAQ:JYNT) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 216% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 121 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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Disclosure: None. This article is originally published at Insider Monkey.