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Etsy: Global Platform, Highly Profitable Two-Sided Marketplace

January 15, 2021 in Audio, Best Ideas 2021, Best Ideas 2021 Featured, Consumer Discretionary, Diary, Equities, Ideas, Large Cap, Member Podcasts, North America, Transcripts

John Huber of Saber Capital Management presented his in-depth investment thesis on Etsy (US: ETSY) at Best Ideas 2021.

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About the instructor:

John Huber is the Managing Partner and Portfolio Manager of Saber Capital Management, LLC. Saber manages Saber Investment Fund, LP, an investment partnership modeled after the original Buffett partnerships, meaning that the fund has no management fee, and only charges a performance allocation on profits that exceed a 6% compounding hurdle. We view Saber Capital as a vehicle that allows us to compound our own personal capital, and John Huber and his family have the vast majority of their own net worth invested right alongside Saber investors.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

KVH Industries: Niche Market Leader With Incremental Growth

January 15, 2021 in Audio, Best Ideas 2021, Diary, Equities, Ideas, Member Podcasts, Micro Cap, North America, Transcripts

John Barr of Needham Funds presented his in-depth investment thesis on KVH Industries (US: KVHI) at Best Ideas 2021.

Thesis summary:

KVH strives to improve the life of the seafarer and improve vessel operations. KVH’s Connectivity-as-a-Service Agile Plans connects seafarers to their families and lives on shore. The new KVH Watch IoT offering enables remote monitoring and maintenance for the many critical and complex systems on ships. KVH also supplies assured navigation products for military and commercial customers on land and sea. Military vehicles and autonomous vehicles need to know where they are when GPS is not available or accurate.

KVH has a stock price near $10 per share, a market capitalization of approximately $200 million, $41 million of cash, $7 million of PPP debt that is likely to be forgiven, and annual revenue of $160 million. KVH went public in 1996.

John believes KVH could earn $1.50 to $2 or more per share, based on $250 million of revenue, 45-50% gross margins, and 15-20% operating margins. There could also be $3-5 per share of cash. With a 15-20 multiple, John sees value potential of $25 to $45 per share.

Read more about KVH and John’s investment philosophy.

Revisit John’s original presentation on KVH in January 2020.

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About the instructor:

John Barr is a Co-Manager of the Needham Growth Fund (NEEGX). He has been its Co-Manager since January 2010. He also manages the Needham Aggressive Growth Fund (NEAGX). John started on Wall Street in 1995 with Needham as a sell-side analyst following technical software companies, including electronic design automation (EDA) companies. John rejoined Needham in 2009 because of the culture, which lives and breathes growth companies and long-term investing.

From 2000-2002, John was a managing director and senior analyst at Robertson Stephens, following semiconductor technology companies. He was an Institutional Investor All-Star and was ranked by Reuters as leader of one of the top software teams. In 2002 John moved to the buy-side and joined Buckingham Capital Management where he served as a portfolio manager and analyst for their diversified industry long/short domestic equity hedge fund.

John’s first career was outside of Wall Street, where he spent 14 years in sales, marketing and management, primarily in the EDA industry. Working in these small companies makes him think like an owner and to look for that trait in his investments. John loves the challenge of identifying businesses with compounding characteristics and getting to know the companies over the course of years. From his industry experience, he looks to invest in companies that he would have liked to have been part of.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

ICE: Capital-Light, Countercyclical Grower With FCF Margin Expansion

January 15, 2021 in Audio, Best Ideas 2021, Best Ideas 2021 Featured, Diary, Equities, Financials, Ideas, Large Cap, North America, Transcripts

James Davolos of Horizon Kinetics presented his in-depth investment thesis on Intercontinental Exchange (US: ICE) at Best Ideas 2021.

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About the instructor:

James Davolos is a Portfolio Manager at Horizon Kinetics LLC. He serves as Co‐Portfolio Manager to the Kinetics Internet Fund, an equity fund with approximately $150 million in assets, and he is an investment team member of the Kinetics Paradigm Fund, Kinetics Alternative Income Fund, Kinetics Global Fund, Kinetics Small Cap Opportunities Fund, and Kinetics Market Opportunities Fund, all of which are a series of Kinetics Mutual Funds, Inc. James is also directly responsible for a variety of custom and concentrated equity managed account strategies, is a Co‐Portfolio Manager on certain private funds, and is on the investment team across the core managed account strategies. He is a member of the Firm’s Investment Committee and Research Team, and is actively involved in research, valuation and portfolio allocation for many of the Firm’s high conviction investments. James joined the Firm in 2005 as a research analyst. He earned his undergraduate degree (B.B.A.) from Loyola University of Maryland in 2005, and his Master’s in Business Administrator (M.B.A.) from New York University in 2016.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

ProntoForms, MAV Beauty: Well-Managed Canadian Small-Caps

January 14, 2021 in Audio, Best Ideas 2021, Best Ideas 2021 Featured, Diary, Equities, Ideas, Micro Cap, North America, Transcripts

David Barr and Amar Pandya of PenderFund Capital Management presented their in-depth investment theses on MAV Beauty Brands (Canada: MAV) and ProntoForms (Canada: PFM) at Best Ideas 2021.

Thesis summaries:

ProntoForms is a Canadian micro-cap company that provides low-code software solutions to help customers transform paper forms to mobile forms and to collect and analyze field data. Dave likes ProtoForms for its solid track record of organic growth (CAGR of 28% in the last seven years), predictable recurring revenue profile (90% of revenue), strong gross margins (90% gross margin from recurring revenue), and a high revenue retention rate. In recent years, ProntoForms has built up a direct sales team to drive sales, especially adding enterprise customers that have revenue expansion opportunities.

The company appears to be at an inflection point, with cash flow breakeven. ProntoForms is led by its founder CEO and has a strong board that is aligned. The business has a long runway ahead given that the field automation market is largely untapped and demand for low-code applications has been increasing.

Unlike mega cap companies, ProntoForms has not enjoyed the same valuation lift, trading at 5x revenue. ProntoForms is an attractive emerging compounder that could also be a potential takeover target. The company is an emerging compounder, and Dave is content to own the business while waiting for value-unlocking catalysts.

MAV Beauty Brands is a Canadian small-cap personal care company with a platform focused on acquiring independent, founder-led brands and helping them scale and expand market share. The company has a portfolio of four complimentary personal care brands diversified by channel, hair care segment, and consumer base. The company operates with an asset-light business model, generating robust FCF to fund the acquisition of additional brands. MAV continues to expand the distribution footprint through new retailer partnerships, having recently grown to become the 8th-largest hair care company in the U.S. Food/Drug/Mass channel.

MAV Beauty went public in 2018 with a rich valuation and anchored to high expectations, but the share price declined by 80+% after five consecutive quarters of missed expectations. A new operationally focused management team that joined the company in 2019 has turned around the business, cutting costs, expanding margins, and growing the business.

A reset in expectations, insiders increasing their ownership to 58%, and a strong growth outlook provide a compelling setup to unlock shareholder value. MAV trades at a fraction of peer multiples despite outpacing industry growth and outgrowing peers significantly. As the company continues to demonstrate and gain recognition for the strength of its platform, Amar expects the multiple to expand or the company to be acquired as another market participant takes advantage of the valuation disconnect.

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About the instructors:

David Barr is the President and CEO of Pender. He is also the Portfolio Manager of the award-winning Pender Value Fund and Pender Small Cap Opportunities Fund. He began his investing career in 2000, initially working in private equity. He joined Pender in 2003, was appointed Chief Investment Officer in 2007 before becoming President and CEO of Pender in 2016. Mr. Barr holds an MBA from the Schulich School of Business and earned his Chartered Financial Analyst designation in 2003. Mr. Barr looks for value in unpopular places to find high quality businesses at a price that includes a “margin-of-safety”. Investing in a company trading below intrinsic value decreases the risk and increases the potential for generating significant long term performance.

Amar Pandya is a Senior Investment Analyst and Associate Portfolio Manager. He joined Pender in October 2017. Amar started his investment career in 2011 in the Portfolio Management Training Program at a large global financial services company. The program provided him with experience in a variety of investing roles in various asset categories, including Fixed Income and Equities. Prior to joining Pender, Amar was an Associate Portfolio Manager at a large-cap equity value investment firm based in Winnipeg, Manitoba where he specialized in the Industrial, Consumer, Materials, Telecom and Real Estate Sectors. Amar advocates a contrarian value investing strategy, identifying out of favour, quality compound growth businesses, as well as opportunistic close-the-discount investment opportunities trading at a significant discount to intrinsic value. He holds a Bachelor of Commerce degree in Finance (Honours) from the University of Manitoba. He earned his Chartered Financial Analyst designation in 2015. Amar is actively involved with CFA Society Vancouver where he serves as a member of the CFA Vancouver Programs Committee. He also sits on the Steering Committee for the Vancouver chapter of Women in Capital Markets.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

RWE: European Utility Transitioning to Renewable Power Leadership

January 14, 2021 in Audio, Best Ideas 2021, Best Ideas 2021 Featured, Diary, Equities, Europe, Ideas, Large Cap, Transcripts

Will Thomson of Massif Capital presented his in-depth investment thesis on RWE (Germany: RWE) at Best Ideas 2021.

Thesis summary:

RWE is a European utility on the cusp of becoming one of the three largest renewable-power producers in Europe and a global leader in offshore wind. The firm’s transition from a carbon-intensive fully integrated European utility to a renewable power generation focused operator should drive increased profitability, reduce the firm’s cost of capital, and improve its overall risk profile, increasing equity value on a fundamental basis.

The transition should also result in a shift in investor sentiment. The increased importance of ESG considerations to investors may result in RWE being priced at a higher multiple than it has been historically and more in line with European renewable power peers. Will’s analysis suggests that RWE is likely worth between €55 and €60 per share. Further upside is possible depending on management’s development plans for the period from 2025 to 2035.

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About the instructor:

Will Thomson is a Managing Partner at Massif Capital, a value-oriented investment partnership focused on global opportunities in energy, basic materials and industrials. We invest principally in businesses with long lived assets that generate predictable cash flows and require not only capital allocation acumen from management but also a keen focus on operational excellence. Our investment practice is primarily concerned with the nature of risk and value as it relates to protecting, enhancing and deploying the irreplaceable capital of our investors into a concentrated portfolio of economically productive assets.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

Generac: Standby Generator Maker, Leader in Electricity Grid of Tomorrow

January 14, 2021 in Audio, Best Ideas 2021, Best Ideas 2021 Featured, Equities, Ideas, Large Cap, North America, Transcripts

Ian Clark of Dichotomy Capital presented his in-depth investment thesis on Generac (US: GNRC) at Best Ideas 2021.

Thesis summary:

Generac is a multinational manufacturer focused on standby generators. The company has expanded in the standby battery market and, owing to several prescient acquisitions, is becoming a leader in the electricity grid of tomorrow. As the electricity grid becomes more fragmented, Generac will capitalize due to its large asset base and should find multiple new revenue streams going forward.

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About the instructor:

Ian Clark is the Managing Member of Dichotomy Capital, a power focused investmentmanager that looks for opportunistic returns in the public and private markets. Mr. Clark leads the public security selection process for Dichotomy Partners, a long/short hedgefund that primarily invests in utilities, power companies, and the power industry daisy chain. He is also the CEO of Dichotomy Power LLC, an entity that owns and operates renewable energy assets that produce more than 47 GWh/ yr of power and has a dedicated retail energy arm. Mr. Clark is a regular contributor to State level energy policy and is active in numerous energy trade groups. Prior to founding Dichotomy, Mr. Clark was an analyst for NY based hedge fund where he led research on private power investments and analysis of publicly traded independent power producers. He received his M.S. in Chemistry from the University of Oregon . Mr. Clark’s research has been showcased in SumZero, Institutional Investor, CNBC, Gurufocus, SeekingAlpha and numerous other publications.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

S&P Global / IHS Markit: Leader in Financial Data, Ratings, Benchmarking

January 14, 2021 in Audio, Best Ideas 2021, Best Ideas 2021 Featured, Diary, Equities, Europe, Ideas, Information Technology, Large Cap, North America, Transcripts

Sahm Adrangi and Jordon Giancoli of Kerrisdale Capital Management presented their in-depth investment thesis on S&P Global (US: SPGI) / IHS Markit (US: INFO) at Best Ideas 2021.

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About the instructor:

Sahm Adrangi is the chief investment officer of Kerrisdale Capital Management, a private investment manager that focuses on value and special situations investments. Prior to founding Kerrisdale Capital Management, Sahm was an investment analyst at Longacre Fund Management, a distressed debt credit fund. Prior to Longacre, Sahm worked in the bankruptcy restructuring group at Chanin Capital Partners and the leveraged finance group of Deutsche Bank Securities. Sahm holds a Bachelor of Arts in Economics from Yale University.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

Straits Trading: Real-Time Case Study in Holding Company Investing

January 13, 2021 in Asia, Audio, Best Ideas 2021, Best Ideas 2021 Featured, Diary, Equities, Ideas, Real Estate, Small Cap, Transcripts

Amit Wadhwaney of Moerus Capital Management discussed value investing in holding companies and Straits Trading Co (Singapore: S20) at Best Ideas 2021.

Read Amit’s cheat sheet on holding companies for value investors.

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About the instructor:

Amit Wadhwaney is a Portfolio Manager and Co-Founding Partner at Moerus Capital Management LLC, and the founding manager of the Moerus Worldwide Value Fund. Mr. Wadhwaney has over 25 years of experience researching and analyzing investment opportunities in developed, emerging, and frontier markets worldwide, and has managed global investment portfolios since 1996. Prior to founding Moerus, Mr. Wadhwaney was a Portfolio Manager and Partner at Third Avenue Management LLC. Mr. Wadhwaney founded the international business at Third Avenue and was the founding manager of the Third Avenue Global Value Fund, LP, the Third Avenue Emerging Markets Fund, LP, and the Third Avenue International Value Fund, an open end mutual fund. Earlier in his career, Mr. Wadhwaney was first a securities analyst, and then Director of Research at M.J. Whitman LLC, a New York-based broker-dealer. Prior to joining M.J. Whitman, Mr. Wadhwaney was a paper and forest products analyst at Bunting Warburg, a Canadian brokerage firm. He began his career at Domtar, a Canadian forest products company. Mr. Wadhwaney holds an M.B.A. in Finance from The University of Chicago. He also holds a B.A. with honors and an M.A. in Economics from Concordia University; at Concordia, he was awarded the Sun Life Prize and the Concordia University Fellow in Economics, and he subsequently taught economics classes there. He also holds B.S. degrees in Chemical Engineering and Mathematics from the University of Minnesota.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

U.S. Homebuilders and Builders FirstSource: Strong Underlying Trends

January 13, 2021 in Audio, Best Ideas 2021, Best Ideas 2021 Featured, Consumer Discretionary, Diary, Equities, Ideas, Member Podcasts, Mid Cap, North America, Transcripts

Bob Robotti of Robotti & Company presented his investment thesis on the U.S. homebuilding industry and Builders FirstSource (US: BLDR) at Best Ideas 2021.

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About the instructor:

Bob Robotti is the Founder, President and CIO of Robotti & Company Advisors, a registered investment advisor based in New York City. Guided by the classic tenets of value investing, Robotti & Company Advisors uses a proprietary research approach to identify companies with solid balance sheets and the ability to generate significant amounts of free cash flow, yet are misunderstood, neglected, or just out-of-favor. Once identified, Robotti’s investment team focuses on deep primary industry and company research to select investment holdings through the lens of a long-term business owner. In this capacity, Bob currently sits on the boards of Panhandle Oil & Gas Inc. (NYSE:PHX), AMREP Corporation (NYSE:AXR) and Pulse Seismic Data Inc. (TSX: PSD) for which he also serves as Chairman. Prior to founding Robotti & Company in 1983, he was the CFO of Gabelli & Company. Bob holds a BS from Bucknell University and an MBA from Pace University.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

TETRA Technologies: Misunderstood, With Multiple Shots on Goal

January 13, 2021 in Audio, Best Ideas 2021, Best Ideas 2021 Featured, Energy, Equities, Ideas, Micro Cap, North America, Transcripts

Jim Roumell of Roumell Asset Management presented his in-depth investment thesis on TETRA Technologies (US: TTI) at Best Ideas 2021.

Thesis summary, provided by Jim:

TTI provides a vehicle to own a strong, well-performing (non-energy) industrial fluids business, purchased cheaply, as a result of it being held inside a deeply out-of-favor energy services company. Additionally, the company’s energy-related services businesses are gaining market share and performing exceptionally well during a deep energy downturn. Finally, we rate management as blue-chip. Brady Murphy, CEO, spent 26 years at Haliburton, HAL, with his last position as Senior Vice President of Global Business Development and Marketing, and was a contender to become HAL’s CEO. Elijio Serano, CFO, spent 17 years at Schlumberger, SLB, and is a highly-regarded industry executive.

Read Jim’s research on TETRA Technologies.

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About the instructor:

Jim Roumell entered the securities industry in 1986. Before founding the firm in 1998, he was a Registered Principal at Raymond James Financial Services, Inc. Mr. Roumell is a frequent contributor to MOI Global and has been featured in such publications as Barron’s, Kiplinger’s, Value Investor Insight, Financial Planning Magazine, and The Washington Post. He is listed and quoted in “The Art of Value Investing: How the World’s Best Investors Beat the Market.” Mr. Roumell was selected to participate in, and won, two consecutive Wall Street Journal stock picking contests in 2001 and 2002. He is a Board Member and serves on the Investment Committee of Amalgamated Casualty Insurance Company. Mr. Roumell is a graduate of Wayne State University in Detroit, Michigan. In the trailing five-year period, the Roumell Opportunistic Value Fund, RAMSX, is in the top 1% of its Lipper category, the top 8% in the trailing three-year period and the top 6% in the trailing one-year period. There are over 500 funds in Lipper’s Mixed-Asset Target Allocation Moderate category.

The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.
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