The American car parc, already old, is going to get much older due to tariffs, as customers now have an incentive to keep existing cars on the road longer. Very bullish for #DRVN.
Also, #SUP management has said that they are making progress on negotiations with their preferred stock investors. If they exchange those prefs for common, some warrants, and maybe a little junior debt, the story gets a lot cleaner and the stock can re-rate aggressively.
It seems like my 1st impression about the impact of tariffs on #SUP was wrong. It might actually help them, since tariffs on China and EU tires will make them relatively more expensive than tires from Mexico, even with tariffs imposed on that country. #SUP has spare capacity & is looking to use it.
One month in and the earnings reports were weak for #XPOF, and #EWCZ, and strong for #CELH. In line for #AIOT. No change in thesis for any of them, but I sure wish I timed the buy on #XPOF and #EWCZ better. Thankfully, I almost bottom ticked #CELH.
The portfolio is climbing back now and hopefully I'll hit a new high water mark soon.
Peak to trough I was down a bit more than 15% over the last month. My portfolio is almost entirely leveraged special situations, like I've been posting about, and big software companies that I bought in late 2022. Both sides got hit by the tariff scare.
Survive + pay down debt slowly, and #LESL is a multi-bagger from here.
Company just needs to manage inventory better, get gross margins and EBITDA margins back up and they'll generate plenty of cash. The stock is priced like they're going under, but they sell consumables, they're #1 in their market, and they can defer capex as needed. Hard to sink a company like this.
Started a new position in #LESL this week below $0.82. New management, no debt maturities till 2028, no need for store growth. This is a simple blocking and tackling story.
This week I started a basket of new names: #XPOF, #EWCZ, #CELH, and #AIOT. As usual, I'll be wrong on about half of them over time, but I don't know which half yet!
After three weeks of pointless government posturing, it looks like the #CLMT DOE loan has been re-confirmed by the new administration. Onwards.
EBITDA will approach $300m at #RYAM later this year or next year. The market cap, currently $500m, has to rise by a lot for the EV/EBITDA multiple to be steady at any kind of reasonable number.
I've been buying #RYAM aggressively in the last few months. Pricing is going up, new supply takes years to build and none is in the pipeline, prices are rising, and so is cash flow. Leverage is now below 3.0x, so the balance sheet is quite healthy.
In other tariff related news, #RYAM disclosed their exposure to potential tariffs levied on Canada: a hit of $3.5m a month. On the other hand, adjusted EBITDA was pre-announced at $222 million in 2024, up from $139 million the year before.
Big dive for #SUP on the tariff mess, as they manufacture all their North America volume in Mexico. So, too, do substantially all their competitors, so it's a mess for the whole industry. But if tariffs persist, it will be harder for #SUP to wriggle free due to its leverage.
I'm working through the #EDR.MC investor day presentation, but they are guiding to €120m in FCF in FY '26 (starting April 1 2025), or about €1 per share. It's still absurd for a company of this quality to trade at a double digit FCF yield.
A big day for #CLPT, up 22% on a PT increase from $17 to $30 from a research firm called Lake Street. The sell side giveth and the sell side taketh, but today I appreciateth the gain.
Operating leverage and seasoning of their membership base is finally starting to reach down to the EPS line. If things keep going well, they might earn €2.00 per share in a couple of years.
Waiting for this stock to move is like watching grass grow. And yet, management has done everything they said they would, and they have a wildly differentiated product in Edreams Prime. There's no reason that they can't have tens of millions of subs in the future.
One of my largest, and longest held positions, #EDR.MC has an investor day coming soon. They're expected to issue new long term guidance, after nailing the guidance they first issued all the way back in '21.
The company has the financial strength to do just fine during this down cycle. The company continues to buy back stock -- DSO down from 94m to 75 since 2020 -- so EPS in the next normal (non COVID) cycle will be much higher than in the last one.
I've started a small position in #DOOO. During the pandemic, anyone who ever wanted a jet ski, a side by side, or a snowmobile bought one. Unit sales are now at multi-decade lows and the channel has tons of new & used inventory that needs to be worked through.
Big write up on #VAL from the smartest money on the name.
go.pracap.com/hubfs/Quarte...
I'm not adding to the position because I want to see how they manage the balance sheet during the MaxSAF build out process, but I do think this has been de-risked quite a bit.
#CLMT got their DOE loan approved, but then filed for an ATM offering the day after, spiking the good news. Even if they issue the full equity amount, it doesn't move the story too much. Guidance for the year is strong and this should rip this year.
Yes. Though in my experience price and thesis confirmation or refutation move at difference paces, and sometimes even in opposite directions for a while.
Since goats tend to stay goats, and Cadillacs tend to stay Cadillacs, letting your winners run is also crucial in portfolio management. Selling your goats and keeping your Cadillacs will result in a high quality portfolio over time, whether you buy based on quality factors or not.
In the stock market, it's even better than on a game show, because there are more turns, more opportunities for incremental information, and more asymmetry. Plus, you get price as a variable independent of your thesis, which creates more opportunity to use new info on investments you've already made
That's one of the reasons why I think the Monty Hall Problem is so fascinating. You pick a door, and you either have a goat or a Cadillac. Changing your mind after your first wager thus becomes a source of incremental return and a system of risk management, simultaneously.
At its best, portfolio management is an ongoing process of confirmation and refutation. If your investment thesis gets refuted, you should sell, as I did today in #RGS. If your thesis gets confirmed, then you should buy more.
