Praetorian Capital , an investment management company, released its second-quarter 2026 investor letter. The letter can be downloaded here . The Praetorian Capital Fund fell 0.29% net in Q3 2026, bringing year-to-date net performance to 11.01%. Gains from refinery investments were offset by losses in Lincoln Educational Services and Universal Technical Institute, which the fund increased to roughly 20% of capital on the belief that trade schools will benefit from AI-driven workforce displacement and reskilling demand. The fund exited Brazilian positions and reduced overall exposure, building cash and government-bond positions in anticipation of a major slowdown in AI spending. The letter argues that AI investment is economically unsustainable and could trigger bankruptcies, falling equities, and a deep recession; the fund plans to preserve capital, buy bonds during the downturn, and later rotate into inflation-sensitive assets. In addition, please check the Fund's top five holdings to identify its best picks in 2026.
In its Q3 2026 investor letter, Praetorian Capital highlighted its long-term core holding, The St. Joe Company (NYSE: JOE ). The St. Joe Company (NYSE:JOE) is a real estate development, asset management, and operating company. On October 22, 2026, The St. Joe Company (NYSE:JOE) closed at $69.45 per share, reflecting a market capitalization of $3.95 billion. The St. Joe Company (NYSE:JOE) posted a one-month return of 6.36%, while its shares gained 36.02% over the past 52 weeks.
Praetorian Capital stated the following regarding The St. Joe Company (NYSE:JOE) in its Q3 2026 investor letter:
"The St. Joe Company(NYSE:JOE) owns approximately 165,000 acres in the Florida Panhandle. It has been widely known that JOE traded for a tiny fraction of its liquidation value for years, but without a catalyst, it was always perceived to be "dead money." Over the past few years, the population of the Panhandle has hit a critical mass where the Panhandle now has a center of gravity that is attracting people who want to live in one of the prettiest places in the country, with zero state income taxes and few of the problems of large cities.
The oddity of the current disdain for so-called "value investments" is that many of them are growing quite fast. I believe that JOE may grow revenue at a rapid rate for the foreseeable future, with earnings growing at a much faster clip. Meanwhile, I believe the shares trade at an attractive multiple on Adjusted Funds from Operations (AFFO), while substantial asset value is tossed in for free. Besides the valuation, growth, and high Return on Invested Capital (ROIC) of the business, why else do I like JOE? For starters, land tends to appreciate rapidly during periods of high inflation. More importantly, I believe we are witnessing a massive population migration as people with means choose to flee big cities for somewhere peaceful."
The St. Joe Company (NYSE:JOE) is not on our list of the 40 Most Popular Stocks Among Hedge Funds . As per our database, 32 hedge fund portfolios held The St. Joe Company (NYSE:JOE) at the end of the second quarter, which was 29 in the previous quarter. While we acknowledge the potential of The St. Joe Company (NYSE:JOE) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock .
In an earlier article , we discussed The St. Joe Company (NYSE: JOE) and highlighted Praetorian Capital's prior-quarter commentary on the stock. In addition, please check out our hedge fund investor letters Q3 2026 page for more investor letters from hedge funds and other leading investors.
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This article is originally published at Insider Monkey .
