Yet Another Value Podcast

Drew Cohen from Speedwell Research, joins the podcast to discuss his thesis on Constellation Software (TSX: CSU), who acquires, manages and builds vertical market software businesses.

For more information about Speedwell Research, please visit: https://speedwellresearch.com/

Speedwell Research profile on Constellation Software: https://speedwellresearch.com/companies/reports/constellation-software/

Chapters:

[0:00] Introduction + Episode sponsor: Tegus

[1:41] Who is Constellation Software and why are they interesting to Drew

[6:05] How $CSU.TO is scaling their business model / competing with private equity

[13:00] Reverse DCF, deploying capital, competing now with other billion dollar software businesses

[21:02] Mark Leonard - is $CSU.TO a jockey bet / capital allocation / sellers

[28:32] $CSU.TO - what takes this company out

[30:57] AI risk?

[32:52] Price increases / TransDigm comparison / competition risk

[40:08] $CSU.TO vs. parking capital at index fund / likelihood of deploying at least 50% of their cash flow over next 10-ish years

[45:07] Operating synergies with 6 verticals? Why not more spin-offs?

[47:07] Additional worry about $CSU.TO - changing incentive system

[51:58] Aside from Berkshire, what are other examples of Constellation-like culture

[54:57] Speedwell's favorite write-ups he's done recently + quick thoughts on $RH

Today's episode is sponsored by: Tegus

This episode is brought to you by Tegus, the future of investment research.

From the beginning, Tegus has been committed to creating efficiencies in the research process by making it easy to access the content that investors need to get to differentiated insights.

Today, they’re taking it one step further by bundling qualitative content, quantitative data, and better automation and technology together in the same platform. Instead of piecing together data from fragmented sources, just log in to Tegus to get expert research, company- and industry-specific metrics and KPIs, SEC filings, and more, all under the same license cost.

You can even take your work offline with an Excel Add-in that updates almost any model with the latest financial data — keeping all your custom formatting intact.

Tegus is the fastest way to learn about a public or private company and the only platform you’ll need for fundamental research.

To try it free today, visit Tegus.com/value

It's time to welcome back Chris DeMuth for his monthly state of the markets. For this February 2024 edition, Chris shares his thoughts on New ETF $BOXX, Bitcoin and crypto in general, are we in a $BTC mania and Anti-trust outlook - election proxy (using Capital One / Discover as an example).

For more information about Rangeley Capital, please visit: http://www.rangeleycapital.com/

Chapters:

[0:00] Introduction + Episode sponsor: Tegus

[2:09] Thoughts on New ETF $BOXX

[18:55] Bitcoin and upcoming "halving" / current thoughts on crypto in general

[30:44] Are we in a $BTC mania?

[33:15] Anti-trust outlook - election proxy? Using Capital One buying Discover as an example

[43:11] Final thoughts

Today's episode is sponsored by: Tegus

This episode is brought to you by Tegus, the future of investment research.

From the beginning, Tegus has been committed to creating efficiencies in the research process by making it easy to access the content that investors need to get to differentiated insights.

Today, they’re taking it one step further by bundling qualitative content, quantitative data, and better automation and technology together in the same platform. Instead of piecing together data from fragmented sources, just log in to Tegus to get expert research, company- and industry-specific metrics and KPIs, SEC filings, and more, all under the same license cost.

You can even take your work offline with an Excel Add-in that updates almost any model with the latest financial data — keeping all your custom formatting intact.

Tegus is the fastest way to learn about a public or private company and the only platform you’ll need for fundamental research.

To try it free today, visit Tegus.com/value

Austin Crites, CIO at Aurora Financial Strategies, joins the podcast to discuss his thesis on The Lovesac Company (NASDAQ: LOVE), the home furnishing and technology brand best known for its Sacs, The World's Most Comfortable Seat.

For more information about Aurora Financial Strategies, please visit: https://www.aurorafinancialstrategies.com/

Chapters:

[0:00] Introduction + Episode sponsor: Tegus

[1:35] Overview of Lovesac $LOVE and why are they so interesting to Austin

[5:44] Bear case: One product company + cheap knockoffs

[12:02] Repeat business / Crocs comparison / Reddit and TikTok Lovesac / Target customers

[21:27] Shark Ninja comparison

[26:09] Valuation / Competitive analysis (La-Z-Boy, Restoration Hardware)

[31:07] Inventory turns

[34:56] Short interest

[38:48] Management and insider ownership

[41:27] Barter revenues

[43:43] $LOVE final thoughts

Today's episode is sponsored by: Tegus

This episode is brought to you by Tegus, the future of investment research.

From the beginning, Tegus has been committed to creating efficiencies in the research process by making it easy to access the content that investors need to get to differentiated insights.

Today, they’re taking it one step further by bundling qualitative content, quantitative data, and better automation and technology together in the same platform. Instead of piecing together data from fragmented sources, just log in to Tegus to get expert research, company- and industry-specific metrics and KPIs, SEC filings, and more, all under the same license cost.

You can even take your work offline with an Excel Add-in that updates almost any model with the latest financial data — keeping all your custom formatting intact.

Tegus is the fastest way to learn about a public or private company and the only platform you’ll need for fundamental research.

To try it free today, visit Tegus.com/value

Pedro Sousa, Principal at Oxy Capital, joins the podcast to discuss his thesis on The Gym Group plc (LSE: GYM) - founded in 2007, the Gym Group is the original provider of high quality, low cost gym facilities in the UK.

For more information about Oxy Capital, please visit: https://oxycapital.com/homepage/

Chapters:

[0:00] Introduction + Episode sponsor: Fundamental Edge

[2:05] Overview of Gym Group $GYM.L and why it's interesting to Pedro

[9:09] Competitive analysis: Basic-Fit and PureGym

[18:00] Raising prices and margin expansion

[25:40] Replacement cost and margin of safety

[31:29] Discounting of membership in October 2022

[33:42] New CEO in Summer 2023

[37:29] Three-tier pricing membership

[41:14] Normalized earnings levels looks like and free cash flow

[53:18] EBITDA multiples

[56:35] Bear case on $GYM.L

[1:07:28] Final thoughts

Today's episode is sponsored by: Fundamental Edge

You’ve probably heard it’s an “apprenticeship” system, or that you’ll “learn by osmosis”? But what if there was a better way to learn the equity analyst job? Fundamental Edge is re-defining training on the buy-side. Use the code "10YAVP" for a 10% discount. Website: https://www.fundamentedge.com/

Whether you’re already in the seat or looking to break in, the Analyst Academy from Fundamental Edge offers a thorough and flexible path to developing the tools and frameworks employed by leading hedge funds. Breaking in: https://www.fundamentedge.com/breaking-in

Check out the Academy syllabus and sign up for future free content: https://fundamental-edge.ck.page/academyinfo

Evan Tindell, CIO of Bireme Capital, joins the podcast for his fourth time to discuss his thesis on British American Tobacco p.l.c. (NYSE: BTI), the company engages in the provision of tobacco and nicotine products to consumers worldwide.

For more information about Bireme Capital, please visit: https://www.biremecapital.com/

Evan's $BTI write-up in Bireme Capital's investor letter: https://www.biremecapital.com/blog/december-2023-investor-letter

Chapters:

[0:00] Introduction + Episode sponsor: Fundamental Edge

[2:04] Overview of British American Tobacco Company and why they are interesting to Evan

[6:42] What Evan thinks his edge is with $BTI / comments on stock performance over the last few months

[11:58] Vaping, regulations and how this affects $BTI

[18:38] $BTI annual report

[25:24] Competition from non-regulated folks / legal liabilities for new $BTI products / menthol cigarette ban

[34:00] Doom-looping on cigarette industry

[38:00] $BTI's ownership stake in ITC (formerly known as India Tobacco Company)

[43:43] "Sum of the Parts" stocks[51:07] $BTI capital allocation strategy

Today's episode is sponsored by: Fundamental Edge

You’ve probably heard it’s an “apprenticeship” system, or that you’ll “learn by osmosis”? But what if there was a better way to learn the equity analyst job? Fundamental Edge is re-defining training on the buy-side. Use the code "10YAVP" for a 10% discount. Website: https://www.fundamentedge.com/

Whether you’re already in the seat or looking to break in, the Analyst Academy from Fundamental Edge offers a thorough and flexible path to developing the tools and frameworks employed by leading hedge funds. Breaking in: https://www.fundamentedge.com/breaking-in

Check out the Academy syllabus and sign up for future free content: https://fundamental-edge.ck.page/academyinfo

Alex Morris, Founder of TSOH Investment Research, returns to Yet Another Value Podcast for the fourth time to discuss his recent article, "Letting Winners Run."

For more information about Alex Morris and subscribe to his research service, TSOH Investment Research Service, please visit: https://thescienceofhitting.com/

"Letting Winners Run" article: https://thescienceofhitting.com/p/letting-winners-run

Chapters:

[0:00] Introduction + Episode sponsor: Alphasense

[1:47] Letting winners run thesis

[6:23] Hindsight bias

[8:26] Cash flow considerations

[12:07] Selection bias

[14:36] Examples of the "Letting Winners Run" strategy (forever business vs. 5-year/20-year outlooks)

[18:55] How "Forever Business" in media has changed over the years

[21:46] Management

[26:07] Is there something unique about big tech

[29:08] Thesis drift + examples

[38:03] Knowing when to sell "forever business"

[41:56] "Beautiful Sunset" principle

[45:27] Dismissing banks an example of dismissing "letting winners run"

[51:06] Why "Best Ideas Funds" fall short

[53:40] Final thoughts and closing

Today's episode is sponsored by: Alphasense

This episode is brought to you by AlphaSense, the AI platform behind the world's biggest investment decisions. The right financial intelligence platform can make or break your quarter. AlphaSense is the #1 rated financial research solution by G2. With AI search technology and a library of premium content, you can stay ahead of key macroeconomic trends and accelerate your investment research efforts. AI capabilities, like Smart Synonyms and Sentiment Analysis, provide even deeper industry and company analysis. AlphaSense gives you the tools you need to provide better analysis for you and your clients. As a Yet Another Value Podcast listener, visit alpha-sense.com/fs today to beat FOMO and move faster than the market.

It's time to welcome back Chris DeMuth for his monthly state of the markets. For this January 2024 edition, Chris discusses anti-trust, Spirit decision, US Steel - Nippon, banks and $LQDA.

For more information about Rangeley Capital, please visit: http://www.rangeleycapital.com/

[0:00] Introduction + Episode sponsor: Alphasense

[1:53] Anti-trust + Spirit decision

[9:00] Judge's decision in Spirit case + how antitrust lawyers reacted before and after the decision

[15:45] Future of anti-trust and mergers

[21:32] US Steel - Nippon

[28:33] Banks

[30:32] $LQDA

Today's episode is sponsored by: Alphasense

This episode is brought to you by AlphaSense, the AI platform behind the world's biggest investment decisions. The right financial intelligence platform can make or break your quarter. AlphaSense is the #1 rated financial research solution by G2. With AI search technology and a library of premium content, you can stay ahead of key macroeconomic trends and accelerate your investment research efforts. AI capabilities, like Smart Synonyms and Sentiment Analysis, provide even deeper industry and company analysis. AlphaSense gives you the tools you need to provide better analysis for you and your clients. As a Yet Another Value Podcast listener, visit alpha-sense.com/fs today to beat FOMO and move faster than the market.

Jon Hook, CFA, Senior Analyst at Voss Capital, joins the podcast to discuss his thesis on R1 RCM Inc. (NASDAQ: RCM), a leading provider of technology-driven solutions that transform the patient experience and financial performance of healthcare providers.

For more information about Voss Capital, please visit: https://www.vosscap.com/

Chapters:

[0:00] Introduction + Episode sponsor: Alphasense

[1:30] What is $RCM and why are they interesting to Jon Hook

[3:47] Why tax is 4-6% (vs. 2% or 20%)

[6:20] Jon Hook's background

[8:50] $RCM elevator pitch

[15:43] $RCM going concerns: addressing short reports, challenging 2022, management change

[22:36] Sutter roll-out

[27:37] Network effects / competitive landscape

[32:32] Addressing add-backs, adjusted EBITDA

[37:10] Addressing stickiness of the business

[40:53] Providence acquisition and capital allocation strategy

[48:22] Final thoughts on $RCM short report

[52:11] Coder shortage

[54:31] Optum ($RCM largest competitor)

[58:33] $RCM final thoughts

Today's episode is sponsored by: Alphasense

This episode is brought to you by AlphaSense, the AI platform behind the world's biggest investment decisions. The right financial intelligence platform can make or break your quarter. AlphaSense is the #1 rated financial research solution by G2. With AI search technology and a library of premium content, you can stay ahead of key macroeconomic trends and accelerate your investment research efforts. AI capabilities, like Smart Synonyms and Sentiment Analysis, provide even deeper industry and company analysis. AlphaSense gives you the tools you need to provide better analysis for you and your clients. As a Yet Another Value Podcast listener, visit alpha-sense.com/fs today to beat FOMO and move faster than the market.

Judd Arnold, Lake Cornelia Research Management @CorneliaLake, joins the podcast to discuss the offshore drilling space, $TDW update, activism, $VAL, $RIG, $NE, Petrobas risk, macro risks, reflecting on recent positions with lessons learned and what Judd is focused on for 2024.

For more information for Lake Cornelia Research Management and Judd Arnold, you can can Follow on Twitter/X @CorneliaLake: https://twitter.com/CorneliaLake

Chapters:

[0:00] Introduction + Episode sponsor: Fundamental Edge

[2:24] Offshore drilling space and $TDW update

[13:12] Offshore drilling space - market correction? and $VAL $RIG

[22:56] Why $VAL might not exercise options and Judd's newsletter explaining why $VAL should ($VAL ultimately did) + discussion on activism

[35:38] What's it going to take for $VAL to start working

[40:25] New build

[43:48] Petrobas risk?

[45:19] Macro risks: OPEC, Oil prices, geopolitics, US Election

[51:52] Gulf of Mexico

[55:48] What Judd is focused on; activism; reflecting on recent positions and lessons learned

Today's episode is sponsored by: Fundamental Edge

You’ve probably heard it’s an “apprenticeship” system, or that you’ll “learn by osmosis”? But what if there was a better way to learn the equity analyst job? Fundamental Edge is re-defining training on the buy-side. Use the code "10YAVP" for a 10% discount. Website: https://www.fundamentedge.com/

Whether you’re already in the seat or looking to break in, the Analyst Academy from Fundamental Edge offers a thorough and flexible path to developing the tools and frameworks employed by leading hedge funds. Breaking in: https://www.fundamentedge.com/breaking-in

Check out the Academy syllabus and sign up for future free content: https://fundamental-edge.ck.page/academyinfo

Brett Caughran, Lead Trainer and Founder of Fundamental Edge, joins the podcast to discuss Fundamental Edge, Brett's background, how pod shows think about earnings season, fundamental stories, liquidity and market efficiency, small caps, pod shops, risk management and pod shop culture.

To sign up for Fundamental Edge's Analyst Academy, use the code "10YAVP" for a 10% discount: https://www.fundamentedge.com/

Chapters:

[0:00] Introduction + Episode sponsor: Fundamental Edge

[1:33] Brett's background and overview of Fundamental Edge

[6:34] What do pod shops look at when they're thinking about earnings season

[15:54] Fundamental stories

[20:31] Liquidity and market efficiency, small caps

[24:58] Pod shop strategies, stress tests, blow ups

[33:53] How interest rate environment affects the pod model

[37:45] Revenge of the small caps

[43:27] Going to work at smaller startup pods vs. larger pod shops

[47:49] Risk management

[51:03] Pod shop culture

Today's episode is sponsored by: Fundamental Edge

You’ve probably heard it’s an “apprenticeship” system, or that you’ll “learn by osmosis”? But what if there was a better way to learn the equity analyst job? Fundamental Edge is re-defining training on the buy-side. Use the code "10YAVP" for a 10% discount. Website: https://www.fundamentedge.com/

Whether you’re already in the seat or looking to break in, the Analyst Academy from Fundamental Edge offers a thorough and flexible path to developing the tools and frameworks employed by leading hedge funds. Breaking in: https://www.fundamentedge.com/breaking-in

Check out the Academy syllabus and sign up for future free content: https://fundamental-edge.ck.page/academyinfo