Nathaniel Leach of LBW Wealth Management presented his in-depth investment thesis on Formula One Group (Nasdaq: FWONK) at Wide-Moat Investing Summit 2018.

Thesis summary:

Formula One Group is a tracker stock of Liberty Media Corporation (one of three trackers) and comprises the Formula One (F1) operating group, some private assets, and a number of public equity holdings, including Live Nation, Time Warner Inc., and a quasi-interest in Liberty Braves. Liberty Media is controlled by John Malone and run by Greg Maffei.

The crown jewel of Formula One Group is F1, the race car organization that controls the brand’s intellectual property rights via television programming, digital, merchandising, advertising, and sponsorship rights; hospitality; and the negotiation with circuit tracks worldwide to stage F1 races.

When Liberty Media purchased F1 via its tracker, named at the time “Liberty Media Group”, F1 was an underinvested asset. Malone and Maffei brought in media veteran Chase Carey to reinvest in the brand and to grow it even more. They have already paid down $1+ billion in debt since their purchase in January 2017, and are looking for potential venues for additional races.

Potential investors have a hard time not only peeling back the other assets within Formula One Group, but also understanding what is needed to reinvest in the brand. Nathaniel believes that after “digging into the weeds”, one will find F1 to be a valuable asset.

Listen to this session:

slide presentation audio recording

About the instructor:

Nathaniel Leach grew up in western Wisconsin and has been investing in the stock market since high school. In 2003, he attended Kalamazoo College and graduated with a B.A. in History. His degree encouraged him to conduct diligent research in a disciplined and efficient manner of any concept. In 2008, he enlisted in the U.S. Marine Corps. After completing active duty in 2012, with honorable character, he entered the RIA industry as a Securities Analyst at a local wealth management firm. He spearheaded multiple initiatives in operations, compliance, and trading as he steadily educated himself further as a value investor. Nathaniel has rigorously studied the great value investors, including, but not limited to: Benjamin Graham, David Dodd, Warren Buffett, Charles Munger, Philip Fisher, Mohnish Pabrai, Seth Klarman, and Joel Greenblatt. Nathaniel resides in Madison with his wife Chaoying.