For the fourth quarter ended December 31st, 2025, KVF lost $1.57 per share, reducing the value of each share to $82.61. This represents a pre-tax loss of 2%, which underperformed the S&P 500, Russell 2000 and S&P/TSX, which were either flat or up in the low-single digits. As a result, KVF's return for the year was 9%, which was KVF's worst return since 2018. Consequently, it has been a very good last seven years.
The biggest contributor to this quarter's loss was Perdoceo. While it only fell around 10%, it has become a large holding by virtue of having almost tripled in price since it was added to KVF's portfolio in 2020. Shares of Bumble are also down a lot, as the market discounts the company due to AI risks and recent revenue declines. Not a lot has to go right for the company at the current price to cash flow, making the shares too good to pass up for KVF.
It wasn't all negative this quarter, as shares of Rayonier advanced to recent highs, allowing KVF to exit very profitably. Banking shares like Citigroup and Barclays also have shown tremendous strength lately, allowing for more highly profitable exits. Unfortunately, these financials were only basket positions thanks to the black-box and highly leveraged nature of this industry.
While prices for the overall market are remarkably high, there are definitely pockets of value out there. KVF's cash position was reduced significantly this quarter as new positions were added and some old positions were increased where pessimism reigns.
KVF's income statement, balance sheet and pre-tax/post-fee returns since inception are included below (click to enlarge). Note that securities are marked to market value, and amounts are in thousands of $CAD:
No comments:
Post a Comment