#14 ValueStream
$JOE $SOC $INTEA -B.ST $INT $SLYG $CNC $DK
Disclaimer
This content is for informational purposes only and does not constitute financial advice; we recommend always verifying the ideas presented here and conducting your own research, as there may be errors in interpretation and translation.
Today we have compiled the following theses:
Thesis on St. Joe - $JOE - January 12, 2025 by Praetorian Capital Management
Thesis on Sable Offshore Corp. - $SOC - January 15, 2025 by JasonStrom84409
Thesis on Intea - $INTEA -B.ST - Jan 07, 2025 by Protean Select
Thesis on Intellego - $INT - Jan 06, 2025 by Infuse Partners
Thesis on Shelly Group - $SLYG - Jan 06, 2025 by Infuse Partners
Thesis on Centene Corporation - $CNC - Dec 31, 2024 by Heartland Mid Cap Value Fund
Thesis on Delek US Holdings, Inc. - $DK - Dec 31, 2024 by Heartland Value Fund
Thesis on St. Joe - $JOE - January 12, 2025
St. Joe (JOE) is dedicated to the development, management, and enhancement of land and real estate assets, primarily in Northwest Florida.
Strategic Assets: 168,000 acres in Northwest Florida and commercial operations generating recurring income.
Tailwinds: Population growth, increased air traffic (+30.1% since 2019), and strong real estate demand.
Competitive Advantage: Control of strategic land in a region experiencing economic boom.
Long-Term Catalysts: Strategic projects that increase land value and generate sustainable cash flows, creating even more value than stock buybacks.
It is undervalued for many reasons, one of which is that Bruce Berkowitz, who owns 29.7%, is selling his position.
Valuation
Estimated NAV: Between $200 and $300 per share (midpoint: $250).
Current Price: Trading at $45 per share, with a significant discount.
Land Value: Estimated between $57,500 and $92,200 per acre; the market values them at $3,600 per acre.
NAV Growth: Projected annual increase of $30 per share (+10% annually).
Return Potential: The current discount and projected growth make it an attractive long-term investment.
SOURCES:
Praetorian Capital Management
Q4 2024
Thesis on Sable Offshore Corp. - $SOC - January 15, 2025
Sable Offshore Corp. (SOC) is engaged in the exploitation and development of oil and gas resources in the Santa Ynez Unit (SYU) project, focusing on reactivating production following a shutdown due to infrastructure issues.
Main project: Reactivation of oil and gas production at Santa Ynez Unit (SYU).
Contingent resources: 646 MMBoe (90% recovery probability).
Operating model: Vertical integration with platforms, pipelines, and processing plant.
Key catalysts:
Production expected in Q1 2025.
Brent prices above $80 drive profitability.
Essential regulatory advances.
It is undervalued due to these risks: Regulatory delays, operational failures, and the impact of not resuming production before 2026. In this case, ExxonMobil has the option to reclaim the asset without compensation; however, if progress is made, the timeline may be extended.
Valuation:
Current stock price: $22.79.
Enterprise Value (EV): $2.85 billion, with net debt of $814 million.
Current EV/BOE: $4.40 (reflects contingent resources) vs. competitors' average of $22.73 for proved reserves.
If it manages to reclassify its resources as proved reserves:
Upside potential:Target price: $155-$200 per share (up to 8.7 times its current value).
But if it goes wrong, everything is lost. It is a binary idea.
SOURCES:
@JasonStrom84409
https://x.com/JasonStrom84409/status/1879573296192086309?t=MYQxgnB_XTSpy3Tkbltdbw&s=08
Thesis on Intea - $INTEA -B.ST - Jan 07, 2025
Intea is dedicated to the management and development of specialized properties, primarily leased to public entities such as police stations, universities, and prisons, with long-term contracts.
Specialized properties leased to public entities with long-term contracts and low operational risk.
Structural growth: Expansion in the Swedish prison market with high projected demand.
Value generation: SEK 3.7 billion development projects with a return on cost of 6.5%. In a business currently valued at a 5.2% yield, which generates value.
Sectoral advantage: Stability and growth in a niche with high entry barriers.
They find it interesting that the IPO was done with very little marketing.
Management confidence: Additional stock purchases by the CEO and CFO after the IPO.
Valuation
Discount to NAV: Shares trade below the net asset value.
Attractive yield: Implied yield of 5.3% and Yield on Cost of 6.5%.
Growth: Double-digit CAGR in NAV and earnings adjusted for dividends projected over three years.
SOURCES:
Protean Select
Q4 2024
Thesis on Intellego - $INT - Jan 06, 2025
Intellego manufactures UV-C dosimeters, cards that change color when exposed to UV light, and distributes UV machines to boost its sales.
Leader in the UV-C dosimeter market with strong patent protection and a solid brand.
A vertically integrated model that drives sustainability and strengthens customer relationships.
Growth supported by the expansion of UV-C disinfection technologies.
Expected growth: >40% annually.
Risks: Inconsistent cash flows and governance issues.
Valuation
Estimated EBIT (2025): 20 million dollars.
Projected FCF (2025): 15 million dollars.
Market capitalization: Slightly over 100 million dollars.
Revaluation: The stock could double in value within a year.
SOURCES:
Infuse Partners
https://www.infuse-am.com/post/q4-2024-letter
Jan 06, 2025
Q4 2024
Thesis on Shelly Group - $SLYG - Jan 06, 2025
Shelly Group develops chips and technologies to connect and make home appliances and devices smarter.
Innovation in smart appliances through low-cost, high-functionality chips.
Strategic partnership with Samsung, expanding its market.
Strong position in the smart home sector with potential for sustained growth.
Valuation:
Projected EBIT for 2026: $60 million.
Trades at a 10x 2026E multiple.
Potential to double the value of shares in two years with a 20x multiple.
SOURCES:
Infuse Partners
https://www.infuse-am.com/post/q4-2024-letter
Jan 06, 2025
Q4 2024
Thesis on Shelly Group - $SLYG - Jan 06, 2025
Shelly Group develops chips and technologies to connect and make home appliances and devices smarter.
Innovation in smart appliances through low-cost, high-functionality chips.
Strategic partnership with Samsung, expanding its market.
Strong position in the smart home sector with potential for sustained growth.
Valuation:
Projected EBIT for 2026: $60 million.
Trades at a 10x 2026E multiple.
Potential to double the value of shares in two years with a 20x multiple.
SOURCES:
Infuse Partners
https://www.infuse-am.com/post/q4-2024-letter
Jan 06, 2025
Q4 2024
Thesis on Centene Corporation - $CNC - Dec 31, 2024
Health insurer with 25 million insured (Medicaid, Medicare Advantage, and ACA).
Potential recovery in Medicaid due to rate increases (4.5%-5%) and projected improvements for 2025.
Moderate political risks in ACA, with growing bipartisan support.
Operational restructuring underway and share buybacks to improve efficiency and value.
Directors' stock purchases indicate confidence in the company’s future.
Valuation:
Trades at a P/E of 8.5 times, well below its peers.
Recovery in Medicaid and Medicare Advantage could add $3-$4 per share.
Maximum risk in ACA limited to $1 per share.
SOURCES:
Heartland Mid Cap Value Fund
https://www.heartlandadvisors.com/
https://www.heartlandadvisors.com/Strategies/Heartland-Mid-Cap-Value-Fund/4Q24-Mid-Cap-Comm
Dec 31, 2024
Q4 2024
Thesis on Delek US Holdings, Inc. - $DK - Dec 31, 2024
Delek US Holdings, Inc. is an energy company that operates refineries and produces petroleum-derived products for the transportation sector.
Sector: Refineries and petroleum-derived products for transportation.
Current problem: 50% drop in shares due to lower diesel demand and reduced margins.
Future opportunity: Recovery of road transportation in 2025 will drive margins and profitability.
Strategy: Sale of gas stations ($400M for share buybacks) and maximization of "sum of the parts" value.
Confidence: Share purchases by the CEO.
Share buybacks: $400M program underway.
Sector history: Refineries outperform the energy sector in 75% of cases after WTI drops, with an average outperformance of 25%.
Valuation:
Current price: $17 per share.
Estimated intrinsic value: $31 per share (82% revaluation potential).
Maximum loss price target: $16 per share.
SOURCES:
Heartland Value Fund
https://www.heartlandadvisors.com/Products/Mutual-Funds/Heartland-Value-Fund
https://www.heartlandadvisors.com/Strategies/Heartland-Value-Fund/4Q24-Value-Fund-Comm
Dec 31, 2024
Q4 2024