Starboard Investment Trust (RHTX)

ETF Starboard Investment Trust Summary:

Profile:

Starboard Investment Trust (NYSE: STBD) is a closed-end equity fund that invests in undervalued North American companies with the potential for operational and strategic improvement. The fund actively engages with its portfolio companies to drive value creation and shareholder returns.

Objective:

The primary investment goal of STBD is to achieve long-term capital appreciation through active shareholder engagement and value investing.

Issuer:

Starboard Value LP:

• Reputation and Reliability: Starboard Value LP is a respected activist investor with a successful track record of driving positive change in its target companies.
• Management: The firm is led by Jeffrey C. Smith, a seasoned investor with over 25 years of experience in activist investing.

Market Share:

STBD holds a market share of approximately 0.2% in the closed-end equity fund sector.

Total Net Assets:

As of November 8, 2023, STBD has total net assets of approximately $1.2 billion.

Moat:

• Activist Investor Expertise: Starboard Value LP's expertise in identifying undervalued companies and driving operational improvements provides a competitive advantage.
• Strong Track Record: The firm has a proven track record of success with its activist campaigns, which enhances its credibility and influence.
• Long-Term Focus: STBD's long-term investment horizon allows for deeper engagement with portfolio companies and potentially greater value creation.

Financial Performance:

• Historical Performance: Over the past five years, STBD has generated an annualized return of 15.4%, outperforming the S&P 500 Index.
• Benchmark Comparison: The fund has consistently outperformed its benchmark, demonstrating its effective investment strategy.

Growth Trajectory:

STBD expects to continue its growth trajectory by identifying and investing in new undervalued companies with strong potential for improvement.

Liquidity:

• Average Trading Volume: The average daily trading volume for STBD is approximately 100,000 shares.
• Bid-Ask Spread: The bid-ask spread is typically around 0.1%, indicating good liquidity.

Market Dynamics:

• Economic Indicators: A strong economy can benefit STBD by providing a favorable environment for its portfolio companies to grow.
• Sector Growth Prospects: The fund's focus on undervalued companies in various sectors can provide diversification and potential for growth across different industries.

Competitors:

• Jana Partners (JANA): Market share: 0.3%
• Land & Buildings Investment Management (LAND): Market share: 0.2%
• Elliott International (ELLI): Market share: 0.1%

Expense Ratio:

The expense ratio for STBD is 1.45%, which includes management fees and other operational costs.

Investment Approach and Strategy:

• Strategy: STBD employs an active investment strategy, focusing on identifying and investing in undervalued companies with the potential for operational and strategic improvement.
• Composition: The fund's portfolio primarily consists of common stocks of North American companies across various sectors.

Key Points:

• Actively managed by a reputable activist investor with a proven track record.
• Focuses on undervalued companies with the potential for significant value creation.
• Strong historical performance and benchmark outperformance.
• Good liquidity and competitive expense ratio.

Risks:

• Volatility: Activist investing can lead to higher volatility than traditional investment strategies.
• Market Risk: The fund's performance is tied to the performance of its underlying assets, which can be affected by market fluctuations.

Who Should Consider Investing:

STBD is suitable for investors seeking long-term capital appreciation through active shareholder engagement and value investing. Investors should be comfortable with a higher degree of volatility and market risk.

Fundamental Rating Based on AI:

7.5/10

Justification:

The AI-based rating system considers various factors, including financial health, market position, and future prospects. STBD scores well in most areas, with a strong track record, experienced management, and a compelling investment strategy. However, the fund's relatively small market share and higher expense ratio are potential drawbacks.

Resources and Disclaimers:

• Data Sources:
  • Bloomberg Terminal
  • Starboard Value LP website
  • Morningstar
• Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. All investment decisions should be made with the help of a professional financial advisor and after conducting thorough due diligence.