Spring 2024

Noah Snyder believes Vitec Software Group has strong growth potential due to its innovative software solutions and expanding market presence.

Noah Snyder sees Kelly Partners Group as a compelling investment due to its solid business model and the increasing demand for its services in the market.

dy Waters has a short position in Fairfax, indicating a belief that the stock is overvalued or facing significant challenges ahead.

dy Waters has a short position in Blackstone Mortgage Trust, suggesting concerns about its performance and market conditions.

Enstar Group Ltd is a strong investment due to its solid financial profile and ability to generate cash, which positions it well to weather market turbulence and capitalize on opportunities when competitors are distracted.

Jennifer Oppold holds a position in Interpublic Group due to its strong fundamentals and potential for growth in the advertising sector.

HEICO Corporation is part of Jennifer Oppold's portfolio because of its robust business model and growth prospects in the aerospace and electronics sectors.

Jennifer Oppold considers Trex a valuable investment due to its leadership in the composite decking market and strong demand for sustainable building materials.

Adam Patinkin has a short position in Brown-Forman, believing that the company's valuation does not reflect the challenges it faces in the current market environment.

Adam Patinkin is bullish on Vistry due to its strong fundamentals and potential for growth in the housing market.

Adam Patinkin sees eDreams ODIGEO as a promising investment due to its innovative approach in the online travel sector and potential for recovery post-pandemic.

Adam Patinkin considers Lifecore Biomedical a strong investment due to its unique product offerings and growth potential in the biotech space.

Sunrun is destroying capital and has made horrific financial decisions. If interest rates return to zero, the stock may temporarily rise, but the underlying business fundamentals remain weak.

Fairfax is believed to be marking its book aggressively, indicating a level of intellectual dishonesty in their financial reporting. This presents a significant short opportunity based on the review of the data.

Enstar is positioned as a strong player in the reinsurance market, benefiting from its capital strength and ability to attract premium pricing. The company can compound book value at a ~20% CAGR due to its selective underwriting and strong capital position, which provides a durable competitive advantage. The current valuation does not fully reflect these strengths, presenting a significant upside opportunity for investors.

Janus International is undervalued due to its SPAC origins and ownership dynamics, which have masked its true value. The company holds significant market share in the self-storage sector and is poised to capitalize on the REIT cycle, with a mix shift expected to drive improved unit economics and corporate actions enhancing productivity. The recommendation includes a target price that reflects a substantial upside potential.

Inter Parfums is a company that has shown strong growth potential, with a 12% organic CAGR prior to COVID and strong operating margins. The company has a unique opportunity in China, where fragrance usage is increasing among younger consumers, which could significantly boost sales. Additionally, new licensing agreements with brands like Lacoste are expected to support organic growth.

Inter Parfums has shown strong performance with a great Q1 and excellent holiday season, indicating robust demand for their products. The potential for growth in the Chinese market presents a significant upside opportunity, which is not fully reflected in their current valuation.

HEICO is a market leader in PMA parts, having built a strong reputation and trust over decades. Their recent acquisition of Wencor positions them to further solidify their dominance in the market, providing significant upside as airlines seek dependable suppliers post-COVID.

HEICO has a strong decision-making structure that involves consensus among its leadership, which gives confidence in its ability to transition through eventual succession. The company has been able to grow both sets of businesses strongly and improve margins over time, making it a solid long-term investment.

Trex is the pioneer in composite decking, offering a sustainable alternative to wood decks. The company has a strong market position with approximately 50% market share, growing organically at a double-digit rate, and earning high operating margins. With no debt and significant free cash flow, Trex is well-poised for continued growth in a market shifting towards composite materials.

Trex has a strong market position due to its manufacturing scale, distributor relationships, and brand recognition. Despite recent revenue drops, the company has shown resilience and continues to execute well, making it an attractive long-term investment.

The inventory channel refill dynamics created a tough comparison for Trex, leading to a projected revenue drop of 30-40% by mid-2022. With rising interest rates impacting consumer financing for large investments like decking, the stock was seen as a short opportunity.

Brown-Forman is facing significant challenges due to an oversupply of whiskey inventory, which has reached twelve years of consumption. This supply wave is expected to lead to a deterioration in the company's growth and earnings power, resulting in a probable compression of its EBITDA multiple. The stock is currently trading at an expensive valuation, which is not sustainable given the impending business challenges.

Vistry is transitioning to a pure-play Partnerships business, which is faster-growing, less-cyclical, and earns higher returns on capital than traditional housebuilding. The company is currently undervalued, trading at less than 4x medium-term EBIT, with a potential upside to £50/share or more as it executes its strategy and benefits from a structural housing shortage in the UK.

eDreams is transforming its business from a transactional model to a subscription model, which has led to a significant increase in subscriber count and profitability. The company trades well below peer multiples and has the potential to re-rate to at least Booking.com's 17x EBITDA multiple, driven by its asset-light, high-margin business model and strong cash flow generation.

Lifecore is poised for significant growth as it expands its manufacturing capacity in a market that is short on fill/finish CDMO capacity. With revenues, profits, and customer pipeline at record highs, the company is expected to fill its new capacity with high-margin production, leading to rapid profit growth and a substantial increase in share price. Lifecore currently trades at $6 per share, but could reach $20-30 per share as new customers are onboarded and commercial production ramps up.

Penumbra was involved in activism that successfully removed a dangerous medical device from the market, showcasing the importance of activism in the healthcare sector. Despite this, some investors were willing to overlook this aspect as it became a smaller part of the business.

Enstar is an attractive opportunity to acquire a stake in a unique reinsurance business that has delivered excess returns. The current price of $267 per share is undervalued compared to an estimated worth of $400 to $500 per share, primarily due to its complex nature that deters most investors. The management team is capable and aligned with shareholders, having compounded book value per share at 15-20% CAGR over 20 years.

Janus International Group is undervalued compared to its premium business product peers and has significant competitive advantages in the self-storage market. The company is expected to benefit from a shift towards renovation CapEx spend by REITs, which is less understood by the market. With a strong market share and differentiated products, Janus is well-positioned to drive revenue growth, particularly through its R3 segment, which enhances existing storage facilities.

Vitec Software is the largest vertical market software company in the Nordics, with impressive growth metrics, including over 20% revenue CAGR and over 30% EBITDA CAGR over the last five years. Despite being overshadowed by Constellation Software, Vitec has delivered even better total shareholder returns over the last decade, making it an attractive investment opportunity.

Vitec is positioned for higher than expected growth due to its recent expansion in M&A and a focus on small, privately owned businesses that are undervalued. With shares trading at ~18x forward EBITDA compared to peers at 20-30% premiums, there is a significant valuation gap that is expected to close as the company gains recognition and executes its growth strategy.

Kelly Partners is a compelling investment opportunity due to its high-quality, organically growing core business and a strong management team. The company is consolidating the accounting industry in Australia with a unique acquisition strategy that allows it to acquire businesses at lower valuations, and it is poised to replicate this strategy in the US and UK, which could significantly enhance its valuation.

Shayan invested in Kate Spade when it was undergoing a turnaround under a new management team, indicating a belief in the potential for recovery and growth.

Shayan invested in TripAdvisor when it spun off from Expedia, suggesting he saw value in the newly independent company and its growth potential.

Shayan's most contentious idea was Tesla, which he began to analyze in early 2012, indicating he recognized its potential despite the stock being highly shorted at the time.