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TSMC: Scale-Advantaged Technology and Manufacturing Leader

June 24, 2023 in Audio, Discover Great Ideas Podcast, Equities, Ideas, Member Podcasts, Transcripts, Wide Moat, Wide-Moat Investing Summit 2023, Wide-Moat Investing Summit 2023 Featured

Aman Budhwar of PenderFund Capital Management presented his investment thesis on Taiwan Semiconductor Manufacturing Company (US: TSM) at Wide-Moat Investing Summit 2023.

Thesis summary:

Founded in 1987, TSMC pioneered the pure-play foundry model and today is the world’s leading and most advanced semiconductor foundry. The company operates numerous cutting-edge fabrication plants in Taiwan as well as advanced packaging facilities around the world and is in the process of investing in fabrication plants in the US and Japan.

TSMC’s innovative technologies and manufacturing prowess have enabled it to forge strategic partnerships with leading semiconductor designers, including major global technology companies. Renowned for its commitment to research and development, TSMC continuously pushes the boundaries of semiconductor technology, offering state-of-the-art processes that enable the production of high-performance, energy efficient chips.

With its strong market position and focus on innovation, TSMC is a key beneficiary of long-term trends driving growth in the semiconductor industry, including 5G, artificial intelligence, and the accelerating digital transformation.

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About the instructor:

Aman Budhwar joined Pender in February 2022 as an Associate Portfolio Manager. He is passionate about capital markets and has over 25 years of experience in the field of global and emerging market equity research, analysis and stock-picking. Prior to joining Pender, Aman held Senior Equity Analyst positions at leading Canadian fund and asset management firms. Prior to that, he began his career as an Investment Correspondent for India’s leading business daily, where he wrote full-page cover pieces that helped establish a loyal readership. He also worked with a domestic stockbroker in Mumbai before immigrating to Canada in 2001.

Throughout his career, Aman has pursued investment opportunities with a long term, differentiated view. He takes a methodical approach to investing and likes to assess both the potential bull and bear cases as well as the probability of each before committing capital to an investment. Over the years, he has developed a process to help identify long term compounders by focusing on key attributes such as a sustainable competitive advantage, high returns on capital, and an attractive free cash flow yield.

Aman holds a Bachelor of Commerce from Garhwal University in India and an MBA from the Institute of Management Technology in India. He earned his Chartered Financial Analyst (CFA) designation in 2004. In his free time, he enjoys an active lifestyle, traveling and spending time with his family.

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.

Sprouts: Attractive Grocery Business With Friendly Capital Allocation

June 24, 2023 in Audio, Discover Great Ideas Podcast, Equities, Ideas, Member Podcasts, Transcripts, Wide Moat, Wide-Moat Investing Summit 2023, Wide-Moat Investing Summit 2023 Featured

Jim and Abigail Zimmerman of Lowell Capital Management presented their investment thesis on Sprouts Farmers Market (US: SFM) at Wide-Moat Investing Summit 2023.

Thesis summary:

Sprouts Farmers Market is a natural, organic grocer trading at a low multiple despite a strong growth and margin profile, a “Ft. Knox” balance sheet, and a plan to profitably grow its store base 10% per year. SFM is a fresh, natural, and organic food market founded in 2002 in Phoenix, Arizona. SFM has a healthy differentiated store concept which operates between a local produce market and healthy grocers like Trader Joe’s and Whole Foods. SFM has a focus on produce, which comprises 20% of SFM total sales.

SFM recently traded at about 7x LTM adjusted EBITDA and about 13x adjusted EPS for 2023. Jim and Abigail believe SFM can grow sustainably at attractive rates for several years because SFM offers differentiated products in its stores — only 11% of merchandise overlaps with Walmart. CEO Jack Sinclair, joined in 2019 and shifted SFM’s strategy towards offering items that customers could not get in other grocery stores and away from competing on price and reduced reliance on flyers to offer discounts to drive traffic.

SFM has a strong cash-generative business model. SFM can use its strong cash flow to internally fund both growth capital expenditures and significant share repurchases. Also, the “Ft. Knox” balance sheet greatly reduces the risk of an investment.

Jim and Abigail believe SFM could grow its store base by 10% annually with low single digit comp sales over the next several years and repurchase about 5% of diluted shares annually. SFM should be able to drive adjusted EPS growth at a 15% to 20% annual rate over the next several years and achieve adjusted EPS of close to $3.50 per share by 2025 or 2026. Based on a stronger, more reliable earnings trajectory, SFM could trade for 20x adjusted EPS or about $70 per share versus its recent $35 per share price. Further, SFM could represent an attractive purchase to a strategic or financial purchaser.

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About the instructor:

Jim Zimmerman is founder and portfolio manager of Lowell Capital Value Partners, LP, successor fund to Lowell Capital Fund, L.P. Jim managed Lowell Capital Fund L.P. from 2003 to 2015 employing a proprietary strategy laser-focused on smaller and/or misunderstood companies with large, sustainable free cash flow yields and “Ft. Knox” balance sheets. He generated a compound annual return significantly exceeding the HFRI Equity Hedge Index and the S&P 500 Total Return Index over this period, despite holding a significant net cash position (~30%) for most of this period. Jim has over 25 years of investment banking and investment management experience in a variety of industries and has been involved with several billion dollars of investments. Jim graduated with a BA with high honors in economics from Princeton University in 1980 and an MBA from Stanford Business School in 1984. He worked at Drexel Burnham Lambert, Inc., 1984 to 1990, serving in the Corporate Finance Department and multiple other investment banks from 1990 to 2003.

Abigail Zimmerman works alongside her father at Lowell Capital. Abigail earned her B.A. in Business Administration at Loyola Marymount University in Los Angeles and has worked with Jim for the last several years. She assists in the generation of new ideas, administrative duties, research of small and medium cap companies, and detailed due diligence on potential investments.

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.

FRP Holdings: An In-Depth Look at the Firm’s Aggregate Properties

June 24, 2023 in Audio, Discover Great Ideas Podcast, Equities, Ideas, Member Podcasts, Transcripts, Wide Moat, Wide-Moat Investing Summit 2023, Wide-Moat Investing Summit 2023 Featured

Jonathan Isaac of Quilt Investment Management presented his investment thesis on FRP Holdings, Inc. (US: FRPH) at Wide-Moat Investing Summit 2023.

Summary:

This presentation on FRP begins with a discussion of the aggregate industry of Florida and Georgia, where FRP holds the majority of its aggregate properties. You will see how the aggregate industry’s supply-side and demand-side characteristics combine to impact the unit economics of an aggregate operation. Then, through the use of satellite imagery and other information, you are led through an analysis of the development potential of a few of FRP’s properties once the aggregates are depleted. After conducting a valuation of FRP’s aggregate properties, we discuss how FRP can potentially reduce the gap between its market price and its true worth.

Note: The valuation multiple discussed for United States Lime & Minerals (ticker symbol “USLM”) in the Question-and-Answer section of the oral/video presentation is based on: the share price on June 22nd, 2023, cash and cash equivalents and shares outstanding as of the most recent quarter end, and FY 2022 lime and limestone operations segment-level OIBDA. If we use trailing 12 months (“TTM”) lime and limestone operations segment-level OIBDA instead, USLM is trading at about 11x OIBDA, also after adjusting for cash and cash equivalents and assuming no value for the non-lime-and-limestone portion of the business. “OIBDA” is, for our purposes, Operating Income plus Depreciation, Amortization, and Depletion. After completing the oral/video presentation, we made a few minor edits to the PDF version of the presentation. A few more edits were made for clarity a few days later. Viewers should consult the PDF version available here as the latest version of this presentation. Notes regarding the edits are in the “Sources and Notes” section of the presentation, as “Note #1” and Note #2.”

Disclaimer/Disclosure: Of the securities mentioned in this synopsis and the note, Quilt Investment Management, LLC currently holds FRP Holdings (ticker symbol “FRPH”) and United States Lime & Minerals (ticker symbol “USLM”) in client accounts and may transact in either security, as well as any other security mentioned, without future updates. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of specific securities, investments, or investment strategies. Additionally, the information should not be construed as Quilt Investment Management, LLC’s solicitation to effect the rendering of personalized investment advice for compensation, over the internet or otherwise. This information is not intended to provide investment, tax, or legal advice. This is not a research report and/or a recommendation. Investments involve risk and, unless stated otherwise, are not guaranteed. Always be sure to first consult with a qualified financial adviser and/or a tax professional before investing, and to verify any information deemed to be accurate. Past performance is not indicative of future performance.

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About the instructor:

Jonathan Isaac is President and Portfolio Manager of Quilt Investment Management, LLC, a registered investment adviser in Portland, Oregon.

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.

LSEG: Improving Data Monetization Following Refinitiv Acquisition

June 23, 2023 in Audio, Discover Great Ideas Podcast, Equities, Ideas, Member Podcasts, Transcripts, Wide Moat, Wide-Moat Investing Summit 2023, Wide-Moat Investing Summit 2023 Featured

Bertie Thomson of Brown Advisory presented his investment thesis on London Stock Exchange Group (UK: LSEG) at Wide-Moat Investing Summit 2023.

Thesis summary:

London Stock Exchange Group is an integrated financial market infrastructure operator that helps customers mitigate risk. The company operates in duopoly and oligopoly markets, with leading positions in data, indices, and post trade, protected by a fortress of economic moats.

LSEG’s acquisition of Refinitiv in 2021 has materially shifted the group’s economic exposure to data and analytics. Bertie believes there is potential for the company to improve the monetization of its data assets, facilitated by a strategic partnership with Microsoft, and to close the growth and margin gap with peers.

The existing equity overhang provides an opportunity for long-term investors, and Bertie sees a five-year IRR of ~20% in a realistic bull case scenario.

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About the instructor:

Bertie Thomson, CFA, is a portfolio manager within the global equity team at Brown Advisory, an independent investment management firm. Prior to joining Brown Advisory in October 2015, Bertie spent thirteen years at Aberdeen Asset Management where he was most recently a Senior Investment Manager in the pan-European equity team.

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.

NVR: Homebuilder With High-ROIC, Differentiated Operating Model

June 23, 2023 in Audio, Discover Great Ideas Podcast, Equities, Ideas, Member Podcasts, Transcripts, Wide Moat, Wide-Moat Investing Summit 2023, Wide-Moat Investing Summit 2023 Featured

Todd Wenning of Ensemble Capital presented his in-depth investment thesis on NVR, Inc. (US: NVR) at Wide-Moat Investing Summit 2023.

Thesis summary:

NVR is mainly known among quality investors for having top-notch capital allocation skills — opportunistic buybacks and a cash-rich, asset-light balance sheet. Homebuilding, however, is generally considered to be a “no moat” industry. Intuitively this makes sense and history seems to show it to be true. As land and labor become scarce and affordability remains a problem, NVR has been able to establish a series of local and regional moats that Todd believes are defensible for the next decade and beyond.

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About the instructor:

Todd Wenning is a senior investment analyst at Ensemble Capital. Before joining Ensemble, Todd was an analyst at Johnson Investment Counsel, where he worked on the firm’s SMID cap strategy. Prior to that, Todd was a sell-side analyst at Morningstar, where he led Morningstar’s equity stewardship methodology and covered companies in the basic materials, industrials, and consumer sectors. Earlier in his career, Todd worked for The Motley Fool, SunTrust Asset Management, and Vanguard. He holds a BA in History from Saint Joseph’s University in Philadelphia and the Chartered Financial Analyst designation.

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.

Warner Bros. Discovery: Rapidly Deleveraging, Well-Run Media Giant

June 23, 2023 in Audio, Discover Great Ideas Podcast, Equities, Ideas, Member Podcasts, Transcripts, Wide Moat, Wide-Moat Investing Summit 2023, Wide-Moat Investing Summit 2023 Featured

Rodrigo Lopez Buenrostro of KUE Capital presented his investment thesis on Warner Bros. Discovery (US: WBD) at Wide-Moat Investing Summit 2023.

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About the instructor:

Rodrigo Lopez Buenrostro is a Partner at Kue Capital where he invests to preserve capital over time. He currently leads the asset management division within the firm and divides his time between equity research and manager selection with a global mandate. Previously, Rodrigo worked as a summer equity analyst at SW Investments, a value-focused hedge fund in Chicago. He began his professional career as an Investment Banker at BBVA. Rodrigo is an MBA graduate from Chicago Booth Class of 2015 where he earned a concentration in Analytic Finance and was actively involved in the Investment Management community. He studied Business and Accounting at ITAM for undergraduate where he wrote his graduating thesis on hedge funds and started to invest personally. Rodrigo has always had an interest in finding the real value of assets, reading, and volunteering to teach basic concepts related to investing.

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.

Bandai Namco: Entertainment Company With Strong IP and Culture

June 22, 2023 in Asia, Audio, Diary, Discover Great Ideas Podcast, Equities, Ideas, Member Podcasts, Transcripts, Wide Moat, Wide-Moat Investing Summit 2023, Wide-Moat Investing Summit 2023 Featured

Clement Loh of Lion Rock Partners presented his in-depth investment thesis on Bandai Namco Holdings (Japan: 7832) at Wide-Moat Investing Summit 2023.

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About the instructor:

Clement Loh is the Investment Manager of Lion Rock Partners, a private family fund based in Hong Kong. The fund applies the principles of value investing to seek out companies with competitive advantages selling at a reasonable price with a focus on emerging Asian markets and smaller companies. Clement holds a master’s degree in business administration from the University of Toronto and a degree in pharmacy. Prior to entering the investment profession, Clement worked in the pharmaceutical industry and is a non-practicing pharmacist. His interests include economics, strategy, science, education and history.

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.

Bel Fuse: Successfully Repositioning as Wide-Moat, Niche Business

June 22, 2023 in Audio, Discover Great Ideas Podcast, Equities, Ideas, Member Podcasts, Transcripts, Wide Moat, Wide-Moat Investing Summit 2023, Wide-Moat Investing Summit 2023 Featured

Samir Patel of Askeladden Capital presented his in-depth investment thesis on Bel Fuse (US: BELFA/BELFB) at Wide-Moat Investing Summit 2023.

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About the instructor:

Samir Patel manages Askeladden Capital, the investment advisor to separately managed accounts, utilizing a concentrated, long-only, value-oriented small-cap strategy.

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.

O-I Glass: Well-Run, Predictable, Quality Business With Low Cyclicality

June 22, 2023 in Audio, Discover Great Ideas Podcast, Equities, Ideas, Member Podcasts, Transcripts, Wide Moat, Wide-Moat Investing Summit 2023, Wide-Moat Investing Summit 2023 Featured

Gary Mishuris of Silver Ring Value Partners presented his in-depth investment thesis on O-I Glass (US: OI) at Wide-Moat Investing Summit 2023.

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About the instructor:

Gary Mishuris, CFA is the Managing Partner and Chief Investment Officer of Silver Ring Value Partners, an investment firm with a concentrated long-term intrinsic value strategy. He also teaches the Value Investing Seminar at the F.W. Olin Graduate School of Business. Prior to founding the firm in 2016, Mr. Mishuris was a Managing Director at Manulife Asset Management since 2011, where he was the Lead Portfolio Manager of the US Focused Value strategy. From 2004 through 2010, Mr. Mishuris was a Vice President at Evergreen Investments (later part of Wells Capital Management) where he started as an Equity Analyst and assumed roles with increasing responsibilities, including serving as the co-PM of the Large Cap Value strategy between 2007 and 2010. He began his career in 2001 at Fidelity as an Equity Research Associate. Mr. Mishuris received a S.B. in Computer Science and a S.B. in Economics from the Massachusetts Institute of Technology (MIT).

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.

Clearpoint Neuro: Tightly Owned, Net Cash, High-Margin Platform

June 21, 2023 in Audio, Discover Great Ideas Podcast, Equities, Ideas, Member Podcasts, Transcripts, Wide Moat, Wide-Moat Investing Summit 2023, Wide-Moat Investing Summit 2023 Featured

Peter Mantas of Logos LP presented his in-depth investment thesis on Clearpoint Neuro (US: CLPT) at Wide-Moat Investing Summit 2023.

This is an update of Peter’s presentation from Wide-Moat Investing Summit 2022.

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About the instructor:

Peter Mantas serves as a general partner of Toronto-based private firm Logos LP. Peter is also one of the managing partners at Orion Legal Group and sits as an advisor for a number of venture-backed technology and life-science related companies. Prior to this, he held various economic research positions at the Export Development Bank of Canada, Statistics Canada and held management roles at various large cap technology companies. Peter has both an LL.B. and B.C.L. from McGill University’s Faculty of Law. Prior to studying law he obtained an Honours Baccalaureate in Commerce, Magna Cum Laude, from the University of Ottawa, Telfer School of Management.

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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