A value investor’s Christmas gifts 📔📕
Especially looking forward to reading CBS Greenwalds book on strategy and one of
@iancassel
’s favourite and most recommended books, Free Capital 📈
Merry Christmas everyone 🌲
$ACIC, yesterday Raymond James initiated coverage w $15/share target. Expect further sell-side coverage will lead to buy-side discovery and in turn propel price appreciation.
2/ Going into 2024 my top positions and the stocks I find the best opportunity in are:
$MPTI - I have them earning $2.7/share. On a 15-20x P/E multiple, the stock should trade for $40,5-54/share
$ACIC - Impressive special situation. Got it from
@JonCukierwar
🙏 Thx.
Decent earnings from $ACIC. Q4 23 earnings of $17.7 million and $89.5 million for the full year. Still below industry multiples with its <7 times earnings, also given the combined ratio.
2/ True value investing is about being right in your reasoning which in turn leads to price appreciation as a causal event.
Betting on correlation, like momentum, is as ignorant as betting on the number of storks in Denmark and child births.
$ACIC is a classic Greenblatt case. Obscure. Restructured. Flying below the radar. Interesting case and I think Dan Peed will show good stewardship to investors given his American Coastal-‘’carve out’’ from UPC, his large insider position and his experience from founding AmRisc
1/ Causation vs correlation and why I am against four factor CAPM.
Momentum has showed alpha-generating returns, but momentum could turn overcrowded and the correlation could suddenly stop working.
My favourite quote by Greenblatt:
“Choosing individual stocks without any idea of what you're looking for is like running through a dynamite factory with a burning match. You may live, but you're still an idiot.” 🤦
1/ Things like this make me think of Grahams chapter 8 on The Investor and Market Fluctuations aka Mr. Market.
Gabelli disposed off some $MPTI-shares as a gift per recently filled form 4. These charitable organizations sell the shares to fund their donations.
Remember, there is always opportunity… especially worth remembering when something ran before you acted or you were too passive. Proper due diligence should not be neglected!
I have put this book on workouts or arbitrage situations by Buffetts ex daughter in law on my Christmas gift list. Have not read this one, although I have read many investing books through the years. Can people recommend it? A look into pre $BRK.A days 🧐
3/ Undisclosed position. A company trading below 3x my estimate of EV/FCF. Got this from a MCC pal,
@dsmoak98
🙏 Thx.
$DR.TO - Blurred financials and interesting turnaround driven by a fund after dividend darling status disappeared.
$WSTL - Quantitative OTC listed NCAV stock.
Development costs, a red flag in IPO’s 🚩
1/ There are rules covering as to when development costs can be capitalized as an intangible asset, i.e. IAS 38.
Usually, costs can be capitalized and the intangible asset to be recognised, if is probable that future economic
1/ Li Lu’s investment returns puts him in a league of his own and Munger believed in him. His fund, Himalaya Capital, has compounded over 30% since 1998. Have you ever heard of his homerun investment in USSR Russian oil company?
Read on 👉
2/ Because of this selling $MPTI got oversold during morning hours yesterday., It’s the same company/fundamentals, meanwhile within 24 hours the same security could be bought for $29.5 or $40-something. An intraday move swinging some 30%.
It pays to be the rational investor 🧠
Almost finish reading this book which reveals how to invest in thrift conversions in today’s market. Seth Klarman and Peter Lynch both wrote about the attractiveness of investing in thrifts!
Definitetly worth reading, especially here after the ECIP programme 📖🏦 $CZBS $MFBP
6/ I am again being confirmed year after year that the best, most obscure, below the radar and least efficient opportunities remain in micro cap space.
Sidoti & Company a small cap sell-side research firm increased price target to $37 for $MPTI from $30 on increased confidence in sustained revenue growth, margin and FCF expansion.
Link:
5/ I am humble on the new friendships I have acquired through X and by being accepted and by joining
@MicroCapClub
(although it was not my initial idea that I got accepted on, which was ICPEI Holdings, a MBO in Canada).
Opera $OPRA seems compelling here trading at 15.6x earnings when recent YoY quarterly growth was +20% and they raised guidance for the fourth quarter. I think the business is selling below a 10x EV/EBITDA multiple. Also, Opera GX reached a new record of 26 million MAUs 📈
5/ Li Lu bought Lukoil papers and the stock was listed over the counter in 1999 for $8, an enormous gain from just a few years earlier. And even though Russia devalued its currency, Li Lu still managed to make +10x his money!
3/ They are correlated, but neither variable causes the other.
An intelligent investor has causation in mind as his diligent research eventually leads to being right.
@SharogradskyM
I have a small position in $PLEJD from the IPO. Did not know it would turn out this good. IPO price was SEK 6,35/share back in 2016, but it was massively over-subscribed, so only got a smal holding. $SLYG outlook looks good btw 🤘
The just announced 3-year vesting employee loyalty programme in $MPTI w an exercise price of $36.06 confirms me in mgmt thinks the stock will be considerably higher, if they really mean that “broad equity participation is a significant incentive for our team…” in the form 8-K.
@nicholasp66
@be_maor
They report under IFRS, where business combinations after 2004 should be tested yearly for impairment and hence not longer amortized. Changed with IFRS 3 in 2007.
@JoashReid1
Hi Joash. I see you also research Singaporean companies. Have you had a look at Oiltek International $SGX:HQU. Dirt cheap compounder it looks like.
$kpg.ax in Spain.
With 1,300 Quality shareholders helping, I suspect we can grow in unexpected places.
In fact, just yesterday a shareholder wrote to me offering to help us grow in Canada.
Unappreciated asset of $kpg.ax are our Shareholders!
8/ The Benjamin Graham formula.
Graham’s number is used to calculate the fair value of a stock. The defensive investor can thus quickly arrive to a conclusion on whether the stock yields margin of safety and is undervalued. It thus marks the upper price to pay.
@dirtcheapstocks
Congratz on the impressive performance. The merger arb, you are referring to reminds me of my 15x micro cap experience in SPRT. I bought on a net net basis and rode the coattailes of a shrewd fund improving the co and seeking strategic alternatives. Eventually, it got bought out.
@marketplunger1
@mjmauboussin
Like Buffetts wait and swing big and hard when opportunity arises. You will properly not get rich from your 7th best idea 🤷
1/ Post the $LGL $MPTI spin off, $LGL as a parent co seems very interesting. It is a net net and Marc Gabelli, son of well-known value investor Mario Gabelli, is now setting up a fund structure. The Lynch and Merchant fund is still in the quit period,
1/ The intelligent investor is a classic. The bible on investing and Buffett calls it the best book ever written on investing. What are the main take aways 👉
@alexeliasson
Jeg kan virkelig godt lide deres underdivisioner BilligVVS og LavPrisVVS i Danmark. De er rene niche og moat-divisioner i det danske marked. Har hørt fra nogle håndværkere fra stort VVS-firma i Danmark, som skulle lave noget for mig, at de ikke kunne matche deres priser.
@evfcfaddict
I think $DR.TO makes a very compelling investment given their NCIB buybacks and as they now have divested all the non-core operations and can focus their core business.
@ideahive
Further institutional discovery after the spin off. I estimate the co trades at 12-13x run rate, fwd earnings and am pretty certain they will see rev growth of 20% as quarterly rev have averaged $10m, while backlog has averaged $12.5m. Also, the co enjoys positive op leverage.
R.I.P. Charlie Munger. Such a beautiful and magnificent soul. Your teachings, wit and wisdom about life, investments and everything will never be forgotten 🌠
#charliemunger
#buffett
@Investmentideen
The same goes for CAPM factors in determining value vs growth etc. Value is not only low p/b, p/e-stocks and growth stocks are not only high multiples stocks, they are joined at the hip. Growth and quality are elements in valuation.
@Investmentideen
@InvestInJapan
Excatly, one just have to decipher whether mgmt is capable. I used to have a larger, quantitative cheap and mechanical portfolio to mitigate this by diversification.
@EricSchleien
I do the same, but in Canada. Will try to find time to evolve to OTC as well. How and when did you find $SODI? Can you elaborate a little on this?
2/ Mr. Market.
An allegory created by Benjamin Graham to explain the irrational and volatile nature of the stock market. Mr. Market is a bipolar force that keeps on reacting to the everyday volatile nature of the market. Mr. Market turns up every day offering to buy or sell
@evfcfaddict
You are so right, Andy. $MPTI is a great example as well 🤘 Btw. if you are interested I did a minor research study on european spinoffs some years ago.
5/ Concentration when you are doing your carefull research is what can fuel your investment returns not an excessive diversification. Buffett himself almost had around half his net worth in Geico for an example.
$MPTI Old $LGL form 4 states Tivy’s shares vest 10,000 each year on 4/30/2023, 2024 and 2025. Thought people might be curious given the other day’s filed form 144 on the 5k shares, thus half the vested shares of 10k this year. Gabelli also donated some for charity.
Ferratino also lighted up a bit and Arteaga sold quite a large stake. Given their low salaries, one understands they harvest some gains now. As they say: people sell for many reason, but only buy for one reason. Management still have a large skin in the game, whatsoever.
Opportunities among busted cannabis stocks like $CANB.V.
Quarterly, YoY revenue growth of +110% and net income growth of +883% 📈
Insiders hold a large position as well!
2/2 Net income attributable to ordinary shareholders in the quarter was RMB15,537.1 million (US$2,129.5 million), an increase of 47% from RMB10,588.6 million in the same quarter of 2022. Non-GAAP, an increase of 37%.
1/2 Li Lu’s old position Pinduoduo $PDD came with Q3 results some days ago. Pretty impressive numbers:
Total revenues in the quarter were RMB68,840.4 million (US$19,435.4 million), an increase of 94% from RMB35,504.3 million in the same quarter of 2022.
3/ his shares at a different price. Graham explained that we as rationel investors must tackle this bipolar person with patience and confidence. He advises to look out for the company’s performance rather than paying attention to the market sentiment.
@RTelford_invest
Thanks! I think next year’s returns will come down, but will still be comitted to scout for the best value bargains out there. Good luck to you as well, Ryan!
@PegCityInvestor
The value of an investor network and a mentor. Also, to go look for opportunities in micro space, sifting through the lists from A-Z. Nobody is going to tell you about sub-50M companies trading for <5x earnings while being net nets or growing pretty nice as well.