Why SVN Capital Decided to Invest in A.O. Smith

In Q1 2019 I started building a position in AOS, a 144-year old company that manufactures and sells water heating and treating appliances.

Why Greenhaven Road Capital Decided to Invest in Nintendo

Nintendo has been a “feast or famine” company that has seen its fortunes rise and fall depending on the release cycle and reception of gaming platform consoles and the attached games.

GoDaddy: Scale Player in a Fragmented Industry

GoDaddy has multiple levers to drive material upside in coming years including accretive M&A, rising ARPU and continued bookings growth.

Why We Sold This Controversial Stock

Trupanion is a good business and could very well make us look dumb for selling it. We lost faith, however, in the company’s ability to reach Rule Maker status…

Investing in an Environment of Negative Bond Yields

Companies with large debt are the most vulnerable during periods of economic stress. This will hold true when the upside-down world of negative interest rates corrects itself.

Why Joining the SharpSpring Board of Directors Makes Sense

Joining the board would restrict our ability to sell shares to specified windows of time, but given our projected multi-year holding period, I think it is an acceptable risk.

The Coming Bull Market in Value Investing

The bubble in growth stocks, fed by cheap money, is coming to an end. In this environment, GDS Investments will maintain its steady course of value investing.

Value Investing Amid Low and Incomprehensibly Low Interest Rates

Even two years ago, we could not have imagined the day when Altice, the true “high yield” borrower if there ever was one, would sport negative yields on certain short-term debt.

Reviewing Our Theses on Disney, Charter, Comcast, RBI, F1, and Fox

This article by Francisco Olivera is excerpted from a letter of Arevilo Capital Management, based in San Juan, Puerto Rico.

“Outrageous” Profit Margins

I find myself annoyed buying beer at a baseball game. Since I’m free to buy or not buy a beer, you would think that if I buy one then I must find the price reasonable.

Why Boring Stocks Are Beautiful (And May Be Risky Today)

If you’re buying low beta/boring stocks at lofty valuations, you’re making an implicit bet that rates will remain low and that future equity returns will be lower than historical averages.

Update on Our Investments in U.S. Airlines

There is never a dull moment in the airline business, and H1 2019 was no exception. Gyrating oil prices, fierce competition, swirling macro conditions, and the Boeing 737 MAX tragedy…

Perspectives on Selected Holdings of the Ensemble Fund

It is amazing to think that just two quarters ago our letter focused on why the market was already discounting a mild recession and it made sense to stay long US equities.

Update on Our Investments in Building Products Companies

The core elements of AWI’s business – its dominant competitive position, high margins, and FCF generation – were in place and apparent in 2015 when we initiated our investment…

Value Investors – Avoiding Mining at All Costs, But Why?

Valuation is a conviction building exercise — we have reviewed a company and it appears to have the ingredients for a good investment; now we must build conviction in that claim.

Series on Position Sizing (Part One): Research Stages

At Ensemble Capital we consider three inputs when we size our positions: return potential, conviction, and research stage.

Improving the Process of Selling an Investment

The process of selling based on the relationship between price and value will not and should not change. What is changing is an increased awareness of behavioral biases…

The Ground Rules of Engagement for First-Time Investors

I have often told clients that our approach, with low trading volumes and long holding times (which means avoiding triggering capital gains), generates more wealth, tax-free.

Moat Erosion Starts Behind the Castle Walls

Moat erosion begins behind castle walls. Only after a company loses customer focus, gets lazy or weighed down by bureaucracy, do competitors have a chance to destroy the moat.

Going from Rule Breaker to Rule Maker

Todd Wenning provides a striking case study on how great companies have dealt with difficult obstacles in the past. They all need to adapt from being rule breakers to become rule makers.

Update on Our Travelzoo Investment Thesis

Our cost basis on TZOO is $8.80 per share. TZOO should generate $2.00-2.25 in operating income in the U.S. and Europe in 2019.

Glacier Media: Misunderstood Business with Valuable Digital Assets

GVC is valued like a dying newspaper at 0.4x sales and a $70 million market cap. In reality, about 50% of the business could be sold in the 2-4x sales range.

A Brief History of the Supermarket Business

Ever since the rise of the Internet, people have mused about the eventuality of Internet-driven delivery. Interestingly, the grocery delivery model is an old idea that worked incredibly well…

Update on Our Leaf Group Investment Thesis

In March, our activist position led to a successful outcome of Leaf agreeing to hire a banker and explore the sale of the company.

Five Easy Games for Fundamental Value-Driven Investors

While acknowledging that investing is not easy, certain “easy games” exist for fundamental value-driven investors, because many others are playing a completely different game.

Update on Our Rosetta Stone Investment Thesis

The company has an installed base of six million subscribers, equal to the combined city populations of Chicago, Houston, and San Diego.

Why I Prefer Compounders Over Short-Term Re-Raters

When looking one year out, investor perceptions of the near-term earnings power of a business don’t tend to vary significantly, but opinions about the multiple the business deserves do.

Trade Wars and Recessions: Investing Under Conditions of Uncertainty

Investors hate uncertainty. You hear it almost every day on CNBC. Some pundit saying a version of “we are cautious due to the high level of uncertainty.”

Update on Our Spark Networks Investment Thesis

We think the “new” Spark (Spark + Affinitas + Zoosk) will gain attention on Wall Street over the next year as the company will grow from $125 million to just under $300 million.

Why We Decided to Seed South Africa-Based Desert Lion Capital

The South African market consists of about 385 stocks, and the Top 40 make up around 78% of the JSE total market capitalization. These 40 are well-covered…