Yet Another Value Podcast

Andrew Freedman, managing director at Hedgeye, walks through the TMT landscape post earnings. Key topics include how he looks at legacy media company, why he's bearish PINS and SNAP but long TWTR, and his wories that the economics of streaming simply don't work.

Andrew's Twitter account: https://twitter.com/HedgeyeComm

Chapters
0:00 Intro
1:15 Andrew's Process
5:15 Discussing long TWTR vs short SNAP / PINS
9:35 Does the strategic interest around PINS worry you?
15:20 What's going on with TWTR right now?
32:30 Discussing legacy media (starting with VIAC)
37:10 Comping VIAC's valuation versus NXST
41:10 Why does Andrew have a buy rating on NFLX?
45:35 What should Disney do with ESPN?
47:30 Does the MGM / Amazon deal suggest all of legacy media is undervalued?
51:00 How Andrew looks at the Discovery / Warner merger
1:00:40 Valuing VIAC's Pluto asset
1:04:15 Closing thoughts and Andrew's favorite pick

Ari Lazar, senior analyst at RGA investment advisors, discusses his bull case for KW. Ari believes KW trades at a material discount to NAV, and that discount should shrink as the company's growth starts to ramp up in the near future.

My tweet thread on KW: https://twitter.com/AndrewRangeley/status/1465714725254307840?s=20
RGA's Q3 letter w/ KW discussion: https://www.rgaia.com/commentary/q4-2021-investment-commentary-looking-inward-and-looking-westward/

Chapters
0:00 Intro
1:25 KW Overview
2:45 How KW fits into RGA's investment framework
6:35 KW history
8:30 Discussing the KWE / KW deal from ~2017
11:30 What's KW been doing since the KWE deal?
18:35 Diving into KW's SOTP and their multifamily properties
20:45 Slight technical difficulty
21:25 Continued discussion of KW's SOTP / multifamily assets
23:05 KW"s office assets
29:45 How do you get comfortable when cap rates are this low?
32:30 KW's development asset value
40:20 Valuing KW's asset management business
50:10 Don't all real estate companies trade at a discount to NAV?
55:25 Is there financial engineering potential / could KW split into a REIT?
1:02:00 Does KW belong on the Mount Rushmore of value traps?

Richard Sosa, host of the Riches in Niches podcast, discusses his thesis on Donnelly Financial (DFIN). Despite a strong recent run, DFIN trades at a value multiple, and Richard breaks down all the reasons why he thinks the stock is too cheap and why DFIN is a huge beneficiary of the current SPAC / IPO boom.

My twitter background thread on DFIN: https://twitter.com/AndrewRangeley/status/1460661067395305479?s=20

Riches in Niches podcast twitter: @RichesNichesPod

Chapters
0:00 Intro
1:40 Some background on Richard
4:10 Why Richard likes niches
5:10 DFIN overview
10:45 DFIN's classic spin dynamics
14:35 DFIN's public to private headwinds before the SPAC boom
18:30 Regulatory headwinds in the print business
21:55 More DFIN background
29:30 What the capital markets business does and how it benefits from the M&A / SPAC boom
37:00 Comping DFIN to Workiva
39:40 How sticky is DFIN?
43:20 Breaking down DFIN's valuation
46:30 Is DFIN's shifting segment disclosure concerning?
50:15 Why is the market trading DFIN at such a low multiple?
53:25 Is management and the board fully aligned here?
57:00 DFIN's history of capital returns
1:02:25 More on DFIN's multiple
1:04:55 Closing thoughts

Evan Tindell, CIO of Bireme Capital, discusses the value he sees in Tencent Music (TME). Key topics include why he's not worried about TME's controlling shareholder or VIE structure, and why he thinks the stock is significantly undervalued.

My Twitter thread on TME: https://twitter.com/AndrewRangeley/status/1458813448217935874?s=20

Bireme Capital's website: https://www.biremecapital.com/disclaimer.html

Chapters
0:00 Intro
1:05 TME Overview
1:40 History of shorting Chinese reverse merger
4:30 More background on TME
7:55 How similar is TME to Spotify?
20:00 Why is TME the best way to play the current panic in China stocks?
24:30 Can we trust Tencent as TME's controlling shareholder?
28:15 The VIE structure risk
35:30 How did TME come to be so dominant in Chinese music streaming?
38:10 TME's cash rich balance sheet
43:00 TME's valuation
49:00 Discussing Spotify's valuation in relation to TME
55:50 What risk to TME worries Evan the most?
57:40 Is Evan attracted to messy ownership / control situations?
1:03:30 Brief discussion of Cogeco's current situation

Eric Markowitz, Director of research at Worm Capital, discusses the bull thesis for Tesla. Key topics include all of Tesla's growth options, the biggest misperceptions of Tesla, and why comparing Tesla's valuation to legacy auto manufacturers doesn't make sense.

We wrap up with 15 minutes of discussion on Spotify and what's misunderstood with that company as well.

Reading links:
Worm's Q3 letter: https://www.wormcapital.com/the-wormhole-source/q3-2021
My background tweet on Tesla: https://twitter.com/AndrewRangeley/status/1458061963439878145?s=20

Chapters
0:00 Intro
1:15 Tesla overview
4:15 Tesla's big misperceptions
5:35 How is Tesla different than other car companies?
8:45 Tesla's neural nets and R&D efficiency
13:30 Tesla's recruiting edge
16:55 Worm's investing philosophy
19:05 The power of winner take most markets
23:30 Framing Tesla's valuation
26:05 How strong is Tesla's manufacturing edge?
28:30 Does competition actually expand the EV industry?
31:30 What's the most exciting growth optionality at Tesla?
35:20 Tesla's battery opportunity
36:50 Tesla's red flags and the Solar City Potemkin village
43:05 Tesla's brand strength
45:35 The myth of the Tesla killer
49:45 Flipping to Spotify
49:55 What's the biggest misperception with SPOT?
52:05 Spotify as Netflix 2.0
54:20 Spotify's advertising opportunity
56:15 What worries Eric most about Spotify?
59:40 Spotify's relationship with labels

Aaron Edelheit returns to the podcast to discuss all of the opportunities he's seeing in the cannabis world and why he's chosen now to launch a Cannabis focused fund.

Aaron's Cannabis manifesto: https://mindsetvalue.substack.com/p/the-cannabis-manifesto
Seth Rogen profile I mention during the pod: https://www.nytimes.com/2021/04/20/magazine/seth-rogen.html

Chapters:
0:00 Intro
2:45 Why is Aaron launching a cannabis fund now?
12:00 Professional athletes and cannabis
16:55 How Cannabis today reminds Aaron of single family homes after the GFC
26:50 Aaron's views on federal legalization
37:35 Is Aaron more interested in the direct cannabis plays or the "picks and shovel" providers?
45:50 Using Verano to highlight the growth and valuations Aaron is seeing
54:00 Will the industry stay vertically integrated, or will we start seeing more focused players?
58:55 The tax issues with cannabis plays and why EBITDA is so important here

Jeremy Raper makes his record fifth podcast appearance to discuss his latest high conviction idea: POSaBIT (POSAF). POSaBIT is a microcap company trading on a very small foreign exchange, so risk is certainly elevated here and listeners should remember to do their own work / this is not investing advice. However, Jeremy believes that the company's strong growth and big moat far outweigh the various red flags and risk around it, and that the stock is significantly undervalued based on where much slower growing peers are trading.

Jeremy's seeking alpha article: https://seekingalpha.com/article/4462310-posabit-systems-3x-upside-potential

Chapters
0:00 Intro
2:00 POSaBIT overview
14:30 Diving into POSaBIT's moat
22:10 Why POSaBIT's take rate is sustainable
28:45 If Cannabis got legalized tomorrow, what would happen to POSaBIT?
33:30 Is private equity rolling up the industry a risk?
37:10 Discussing valuation
46:55 Breaking down the RTO / reverse merger red flag
53:10 Jeremy's closing thoughts

Martin Werner, co-founding partner of DD3 Capital, discusses DDMX's deal to deSPAC with Codere Online. Key topics include what DDMX was looking for in a deal, how DDMX worked with their partners in structuring their deal, and why DDMX thinks Codere Online's omnichannel presence gives them a leg up in attacking and winning Latam markets. Towards the end, Martin discusses how he's looking at Betterware (BWMX, which was DD3's first SPAC) and what DD3 will be looking at in their SPAC going forward.

Chapters
0:00 Intro
1:45 What DDMX was looking for in a deal
3:10 DDMX's proxy and the companies they passed on
8:30 DDMX's forward purchase agreement with Baron Funds
12:35 What happened between contacting Codere in January and signing the BCA in June?
15:15 What attracted DDMX to Codere online?
18:40 Codere's Spanish market share and outlook
21:55 Discussing Codere's projections and the assumptions behind them
25:05 Codere's longer term projection and financials
26:00 How lower redemptions will allow Codere to accelerate growth
28:00 Codere's phase 3 plans to move into the U.S. market
31:35 Similarities between Codere Online and Golden Nugget Online
32:30 Why DDMX isn't subject to the winner's curse
35:30 Wrapping up the Codere discussion
36:35 Betterware (BWMX) discussion
39:55 Breaking down the distributor churn at BWMX
44:10 Comparing BWMX's post-COVID slowdown to cable
46:30 BWMX near term headwinds
48:05 What DD3 looks when deSPACing companies

Nitin Sacheti. CIO of Papyrus Capital and PM at ARS Investment Partners, breaks down his thesis for Innovate (VATE). VATE used to be known as HCHC. HCHC was a mishmash of interesting but disparate assets with a huge cost base. Following an activist battle in late 2019 / early 2020, a new management team was brought in and they have sold off noncore assets while dramatically reduing corporate overhead. Nitin believes the remaining assets are all uniquely valuable, and each could be worth more than VATE's current market cap on their own. With several looming catalysts and inflection points, Nitin thinks the next year or two could cause the market to rerate VATE closer to its intrinsic value.

My thread on $VATE: https://twitter.com/AndrewRangeley/status/1452377035897200653?s=20

Chapters
0:00 Intro
2:15 VATE Overview
3:05 Segment #1: DBM Overview
5:15 Segment #2: Life Sciences Overview
7:15 Segment #3: Broadcasting Overview
12:10 Discussing VATE's new management team
21:45 Breaking down the Broadcast business
30:00 Pushing back on the broadcast business plan
35:50 How to value broadcast's spectrum
37:55 Is broadcast spectrum still valuable in a 5G world?
42:20 Discussing DBM's moat and value
47:40 What does R2 (life science's main asset) do?
53:20 Walking through VATE's SOTP value
1:00:50 How to look at VATE's recent related party deals
1:05:25 Discussing VATE's chairman and largest shareholder
1:08:15 What's the endgame for VATE?

Additional disclaimer: Today’s discussion may contain forward looking statements all statements made that are not historical facts are subject to a number of risks and uncertainty; actual results may differ materially. Please refer to ARS's website for important legal and disclosure information: www.arsinvestmentpartners.com

Felix Narhi, CIO and Portfolio Manager at PenderFund, discusses his investment in Stitch Fix (SFIX). Key topics include what Stitch Fix's Act 2 looks like, why negative anecdata from first time users doesn't worry Felix, and what separates Stitch Fix from other online retailers.

Felix's Q2 letter: https://www.penderfund.com/commentaries/the-managers-commentary-q2-2021-2/
My SFIX tweet thread: https://twitter.com/AndrewRangeley/status/1450509121661308928?s=20
Felix's Twitter: https://twitter.com/PenderFelix

Chapters
0:00 Intro
1:10 Stitch Fix Overview
2:40 Addressing the negative anecdata
6:30 What does SFIX's transition to Act 2 look like?
9:10 Why is SFIX's data and data scientist focus an advantage?
16:50 What would an Act 3 look like?
19:35 Is it concerning Katrina Lake (the founder) stepped down as CEO?
23:45 Discussing the stylist hours worked controversy
31:30 Stitch Fix's inventory changes
35:30 Will brands pull from Stitch Fix at some point in the future?
41:15 Will Stitch Fix ever charge for the data they give brands?
44:30 Why isn't Stitch Fix growing faster?
49:50 Quantifying Stitch Fix's valuation
54:20 Stitch Fix's private market and strategic value
57:30 Does Stitch Fix need physical locations?