Discontinuing Coverage: Otter Tail Corporation

Held For: ~3 Months

Position Return: 3.35%

Alpha Contribution: 9 bps

I pitched this in Brigham Capital during my first semester and do not feel that the thesis was very good. I actually sold out back in February but have been trying to figure out a system for initiating/de-initiating coverage that I like. I've decided it will be best to de-initiate once I've sold out of a name and initiate on another owned name instead of continuing to closely cover a company I don't own.

This is the note I left in my log after they reported their earnings in February when I sold out: "Thesis got realized at the quarter, and I think there is an argument to be made that betting on data center build out in North Dakota is an unsubstantiated bet. I also don't love investing in a company where earnings will fall off a cliff and I'm just saying that cliff is further off than others think. It's still a cliff." I think this line of rationale has stood the test of time. The stock is down about 5% since my selling.