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Nuance: Leader in Software-Driven Voice Transcription for Physicians

January 18, 2021 in Audio, Best Ideas 2021, Best Ideas 2021 Featured, Equities, Ideas, Information Technology, Large Cap, North America, Transcripts

Edward Chang of Pledge Capital presented his in-depth investment thesis on Nuance Communications (US: NUAN) at Best Ideas 2021.

Thesis summary:

Nuance is the market leader in software-driven voice transcription for physicians and has introduced game-changing technology in this industry. The company has the largest database of domain-specific audio in healthcare, built over two decades. Utilizing this data, Nuance is creating the best natural language processing algorithm in the industry.

Doctors at major hospital chains are already using the company’s game-changing Ambient Clinical Intelligence (ACI) software offering — called Dragon Ambient eXperience (DAX). This subscription service listens to a doctor-patient conversation and automatically constructs a physician note. Early users are reporting a significant reduction in time spent on administrative tasks, which frees them to see more patients or leave work earlier than in the past.

Edward believes the company is only in the first inning of developing and commercializing this new technology.

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About the instructor:

Edward Chang is the founder and Portfolio Manager at Pledge Capital. He is a graduate of New York University Leonard N. Stern School of Business with a Bachelor’s degree in Finance & Accounting. He also completed a Master’s degree in accounting during the same time. Before founding Pledge Capital in 2016, he worked on the sell side at UBS Equity Research covering consumer retail companies. He had previous work experience covering a wide breadth of companies on the buy-side.

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.

Marc Rubinstein on Blue Owl Capital and the Economics of Private Equity

January 18, 2021 in Audio, Commentary, Equities, Financials, Ideas, Interviews, Member Podcasts, Net Interest

We had the pleasure of speaking with Marc Rubinstein, author of Net Interest, an acclaimed financial sector newsletter, about his essay, The Private Equity Firms’ Private Equity Firm.

Marc writes:

A few weeks ago, in Zuckerman’s Curse and the Economics of Fund Management, we talked about hedge funds. We concluded that owning a hedge fund, or at least a basket of them, could be more lucrative than investing in one. However, aside from Sculptor Capital Management (formerly Och Ziff) there aren’t that many publicly available.

What are publicly available are private equity firms. Large firms like Blackstone, KKR, Carlyle and Apollo all trade on the public markets. Joining their ranks in the not-too-distant future is Blue Owl, which is in the process of coming to the market via a SPAC merger.

Blue Owl is different from your regular SPAC because it is being formed via the merger of three companies rather than the usual two. One is the SPAC sponsor, the vehicle through which the others go public—Altimar Acquisition Corporation. Another is Owl Rock, a direct lending platform which lends to companies, including those that do private equity. And the third is Dyal, a private equity firm that invests in other private equity firms. In many ways this new company is the private equity firms’ private equity firm.

So if hedge fund equity was worth thinking about as an investment, what about this thing? And more broadly, how do the economics of private equity stack up against the economics of hedge funds?

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About This Audio Series:

MOI Global is delighted to engage in illuminating conversations on the financial sector with Marc Rubinstein, whose Net Interest newsletter we have found to be truly exceptional. Our goal is to bring you Marc’s insights into financial services businesses and trends on a regular basis, with Marc’s weekly essays serving as inspiration for our discussions.

About Marc Rubinstein:

Marc is a fellow MOI Global member, managing partner of Fordington Advisors, and author of Net Interest. He is a former analyst and hedge fund manager, most recently at Lansdowne Partners, with more than 25 years of experience in the financial sector. Marc is based in London.

About Net Interest:

Net Interest, authored by Marc Rubinstein, is a newsletter of insight and analysis from the world of finance. Enjoyed by the most senior executives and smartest investors in the industry, it casts light on this important sector in an easy-to-read style. Each post explores a theme trending in the sector. Between fintech, economics and investment cycles—there’s always something to talk about!

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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.

BP: Low-Risk Way to Gain Exposure to Renewable Energy Transition

January 17, 2021 in Audio, Best Ideas 2021, Diary, Energy, Equities, Europe, Ideas, Large Cap

Chris Karlin of Aquitania Capital Management presented his in-depth investment thesis on BP (UK: BP, US: BP) at Best Ideas 2021.

Thesis summary:

BP is one of the world’s major oil companies. Energy companies in general have fallen out of favor among investors for several reasons, including both the shift towards factoring environmental costs and benefits into the investment decision process and the shift towards less capital-intensive, higher-growth businesses.

BP offers both a short-term opportunity as an effective hedge against many risks present in exuberant equity markets as well as a long-term opportunity for substantial rerating as it transitions into a sustainable energy company.

BP is one of the lowest-risk ways to gain exposure to renewable energy given its ability to self-finance the transition. Chris views BP as uniquely positioned to help protect and grow capital over the next several years.

Listen to this session:

slide presentation audio recording

About the instructor:

Christopher Karlin has been in the investment business since 1991. Prior to founding Aquitania Capital Management in 2012, Christopher held positions as a Research Analyst and Portfolio Manager at First Pacific Advisors, Kestrel Investment Management and Fairview Capital Investment Management. Christopher interned with Farallon Capital Management while pursuing his MBA. He began his career with Wells Fargo Nikko Investment Advisors which later became a part of Blackrock. Christopher received his BBA from the University of Wisconsin in 1990 his MBA from Yale University in 1998 and has held the CFA designation since 1994.

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.

WestRock: Integrated Producer of Corrugated and Paper Products

January 17, 2021 in Audio, Best Ideas 2021, Equities, Ideas, Large Cap, North America

Danilo Santiago of Rational Investment Methodology presented his in-depth investment thesis on WestRock (US: WRK) at Best Ideas 2021.

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About the instructor:

Danilo Santiago is the founder of Rational Investment Methodology (RIM), that focuses on a quasi-static group of approximately 60 publicly traded, liquid US stocks – most of these companies, defined as RIM’s Circle of Competence, have been followed for more than a decade. RIM employs extensive industry research and analysis, building highly detailed proprietary discounted-dividend models, which are used to determine “fair values” of companies based on different scenarios. Lastly, RIM constructs “rules-based” model portfolios (long-short, long-only or long- aggressive) with a company-specific margin of safety relative to “fair value”, using its proprietary Odysseus Portfolio Construction Tool. Selected model portfolios are replicated into clients’ accounts, using Interactive Brokers’ platform, adjusting the number of shares in each client’s portfolio in a pari-passu manner. Mr. Santiago is a MBA from Columbia University and has a B.S. in Electrical Engineering from the University of São Paulo.

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.

Comerica: Long-Tenured Banking Business With Downside Protection

January 17, 2021 in Audio, Best Ideas 2021, Equities, Financials, Ideas, Mid Cap, North America

A.J. Noronha of Desai Capital presented his in-depth investment thesis on Comerica (US: CMA) at Best Ideas 2021.

Thesis summary:

Comerica provides a compelling opportunity, with strong downside protection. The business has a strong, stable foundation and is poised to capitalize as the global economy returns to normalcy. Comerica trades at an attractive discount to intrinsic value.

The business successfully weathered the rough start to 2020 and managed to maintain profitability in a low interest rate environment.

Several factors may drive convergence of Comerica’s share price and intrinsic value, including a return to economic normalcy, with the corresponding increase in consumer and business confidence boosting spending. Government stimulus should benefit Comerica’s key business areas.

Comerica is a profitable, well-established company (170+ years old) with diversified business lines. A.J. views the shares as an opportunity where, “heads we win, tails we don’t lose much.”

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About the instructor:

A.J. Noronha, CFA has over ten years of investment management experience, and has worked closely with Mr. Desai since Desai Capital Management’s inception in 2013 with all aspects of the fund, with his primary responsibilities being equity research, due diligence, and developing investment theses for DCM’s portfolio. He has been ranked as highly as #1 (Value), #6 (Long), and #9 (both Overall and North America) in SumZero’s independent analyst rankings, and his independent research on Dow Chemical was selected as one of their top ideas of 2015.. He served as an instructor for MOI Global’s Best Ideas 2018 and Wide Moat Summit 2018, and was an invited participant (non finalist) in the 2017-2018 Sohn Conference Foundation Idea Contests, 2017 SumZero/Van Biema Value Partners Idea Challenge, and 2019 SumZero Best Short Ideas Challenge. Prior to DCM, Mr. Noronha gained investment experience working for a mid-market PE/VC fund, and also co-founded and served in a C-level role for a biomedical engineering startup. He earned a degree in Finance, magna cum laude, from the University of Notre Dame, where he was selected to be a member of the prestigious Applied Investment Management honors finance course where students manage a portion of the University endowment under the guidance of the Chief Investment Officer, and also holds a JD with Dean’s List honors & a concentration in business enterprise (selected coursework taken through the Kellogg School of Management) from Northwestern University. He is a proud CFA Charterholder, is an active Candidate Member of the CFA Society of Chicago & serves on its Professional Development Advisory Group Board, and is a member of Irish Entrepreneurs & Harvard Alumni Entrepreneurs.

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.

RCI Hospitality: Well-Run Operator With Reinvestment Opportunities

January 17, 2021 in Audio, Best Ideas 2021, Consumer Discretionary, Diary, Equities, Ideas, North America, Small Cap

Yaron Naymark of 1 Main Capital presented his in-depth investment thesis on RCI Hospitality (US: RICK) at Best Ideas 2021.

Listen to this session:

slide presentation audio recording

About the instructor:

Yaron Naymark is the founder and portfolio manager of 1 Main Capital, a boutique investment firm founded in 2018 that seeks to make concentrated investments in high-quality, reasonably valued businesses with long reinvestment runways, and special situations undergoing an element of change or temporary dislocation that will cause investors to revalue an investment in the near term. Prior to founding 1 Main Capital, Yaron spent ten years analyzing businesses professionally, including at multi-billion-dollar value-oriented public and private equity firms. Yaron is a South Florida native, a lover of the outdoors, and currently lives in New York City with his wife and dog.

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.

Ciner Resources: Global, Lowest-Cost Producer of Natural Soda Ash

January 17, 2021 in Audio, Best Ideas 2021, Diary, Equities, Ideas, Micro Cap, North America

Kyle Mowery of GrizzlyRock Capital presented his in-depth investment thesis on Ciner Resources LP (US: CINR) at Best Ideas 2021.

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About the instructor:

Kyle Mowery is the founder and managing partner of GrizzlyRock Capital. Kyle holds an MBA from the University of Chicago Booth School of Business and a BA in Economics from UCLA. GrizzlyRock Capital is an alternative asset management firm seeking to deliver risk-managed returns to investors via opportunities across equity markets. The firm takes a value-investing approach to security selection, relying on rigorous fundamental analysis to identify dramatically mispriced corporate securities from the entire capital spectrum. GrizzlyRock Capital is headquartered in Chicago, Illinois.

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.

Cato: Profitable Retailer With Hidden Real Estate and Excess Cash

January 17, 2021 in Audio, Best Ideas 2021, Consumer Discretionary, Diary, Equities, Ideas, Micro Cap, North America

Michael Melby of Gate City Capital Management presented his in-depth investment thesis on Cato Corporation (US: CATO) at Best Ideas 2021.

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About the instructor:

Michael Melby is the founder and portfolio manager of Gate City Capital Management, a micro-cap value focused investment firm. Before starting Gate City Capital, Michael worked as a research analyst at Crystal Rock Capital Management where he covered the consumer, restaurant, retail, and gaming sectors. Michael previously worked at Deutsche Bank Securities in their Debt Capital Markets group and at the University of Notre Dame Investment Office where he focused on natural resources, fixed income, and risk management. Michael earned an MBA from the University of Chicago Booth School of Business where he graduated with Honors and a BBA in Finance from the University of Notre Dame where he graduated Summa Cum Laude. Michael is a CFA Charterholder and has earned the Financial Risk Manager 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.

Pan Pacific: Differentiated Japanese Retailer, Expanding Geographically

January 17, 2021 in Asia, Audio, Best Ideas 2021, Best Ideas 2021 Featured, Consumer Staples, Diary, Equities, Ideas, Large Cap, Transcripts

Clement Loh of Lion Rock Partners presented his in-depth investment thesis on Pan Pacific International Holdings (Japan: 7532) at Best Ideas 2021.

Thesis summary:

COVID has accelerated many of the prevailing trends in retailing, and we have seen closures and consolidation of physical stores in favor of e-commerce.

Yet, in Japan, a physical retail chain has grown from a small general store to one of the top retailers. The company is now on the cusp of embarking on an expansion into Asia and North America.

While other retailers struggled with lockdowns and lack of tourists, Pan Pacific International Holdings opened new outlets in Hong Kong and Singapore to large crowds and still set record operating profits for their last quarter (CQ3 2020).

Clement’s presentation explores what this company does differently and offers clues on what successful retailing may look like in the future.

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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.

Loral: HoldCo Discount to Be Eliminated Post-Merger With Telesat

January 16, 2021 in Audio, Best Ideas 2021, Best Ideas 2021 Featured, Diary, Equities, Ideas, North America, Small Cap, Transcripts

Nitin Sacheti of ARS Investment Partners presented his in-depth investment thesis on Loral Space & Communications (US: LORL) at Best Ideas 2021.

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About the instructor:

Nitin Sacheti is a Portfolio Manager at ARS Investment Partners.

He is the author of Downside Protection, Process and Tenets for Short Selling in All Market Environments and has appeared numerous times in Forbes and on the TD Ameritrade Network.

Prior to joining ARS, Mr. Sacheti founded Papyrus Capital and beforehand, was a Senior Analyst/Principal with Equity Contribution at Charter Bridge Capital where he managed the firm’s investments in the technology, media and telecom sectors as well as select consumer investments.

Previously, Mr. Sacheti was a Senior Analyst at Cobalt Capital, managing the firm’s technology, media and telecom investments and Tiger Europe Management. Mr. Sacheti began his investment career in 2006 at Ampere Capital Management, a consumer, media, telecom and technology focused investment firm, initially as a Junior Analyst, later becoming Assistant Portfolio Manager.

He graduated from the University of Chicago with a BA in Economics, was a visiting undergraduate student in Economics at Harvard University and attended the Loomis Chaffee School in Windsor, CT.

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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