In this idea preview, we feature MOI Global instructor Artem Fokin, founder and portfolio manager of Caro-Kann Capital, based in San Francisco. Artem is an instructor at Best Ideas 2018, the fully online conference featuring more than one hundred expert instructors from the MOI Global membership community.
Both the sell-side and buy-side are myopically focused on challenges facing TripAdvisor’s hotel business in areas such as cost-per-click, “instant booking” rollout, and Priceline’s marketing budget re-allocation.
Artem brings a fresh look at this well-known company and convincingly introduces his variant perception in his presentation. Artem argues that over the past three-and-a-half years TripAdvisor has successfully built two platform businesses with winner-take-all dynamics – “attractions” and “restaurants” – and TripAdvisor is the winner. These two businesses make TRIP an attractive company regardless of how TRIP’s hotel business evolves. The non-hotel business alone would soon justify the recent market valuation of the entire TripAdvisor.
Artem therefore believes Mr. Market is “missing an elephant in the room and is throwing us a fat pitch”. While Artem cautiously views TripAdvisor shares as a double in four to five years, he notes that there is plenty of open-ended upside optionality and expects that the realized return will be even more attractive.
Further, Artem sees 15+% IRR for many years well beyond five years.
Access Artem’s presentation on TripAdvisor.
About the instructor:
Artem Fokin is the founder and portfolio manager of Caro-Kann Capital LLC, a hedge fund based in San Francisco. Prior to founding Caro-Kann, he was a principal at Outrider Management LLC. Before entering the investing industry, Artem was an attorney with Greenberg Traurig LLP in New York City. Artem earned an MBA from the Stanford GSB (Arjay Miller Scholar), a Master of Laws degree from NYU School of Law (Newman Scholar) and a bachelor of law from the Higher School of Economics (Presidential Scholar) in Russia. Artem is admitted to the practice of law in the State of New York and is a dual citizen of the United States and Russia.
Caro-Kann Capital LLC is the general partner of an investment partnership based on the principles of value investing that focuses primarily on special situations and compounders. Caro-Kann Capital is named after a chess defense that emphasizes building safety and defensible position before contemplating an offensive strategy. The Founder’s substantial legal experience brings a greater ability to analyze complex corporate documentation accompanying extraordinary corporate events. The Fund’s core investment principles include: (1) concentration when properly compensated, (2) risk is not equivalent to volatility, (3) non-economic selling can lead to attractive opportunities; (4) capital allocation is often underappreciated by the market, and (5) incentives and insider ownership are paramount.