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 Avanos Medical - $AVNS - Jan 18, 2025 by Rewey Asset Management
Thesis on Weatherford International plc - $WFRD - Jan 18, 2025 by Rewey Asset Management
Thesis on Millicom - $TIGO - Jan 16, 2025 by Longleaf Partners International Fund
Thesis on Perrigo Company plc - $PRGO - Jan 17, 2025 by White Falcon Capital Management
Thesis on Lithium Americas Argentina - $LAAC US - Jan 22, 2025 by Massif Capital
Thesis on Alphamin Resources - $AFM - Jan 22, 2025 by Massif Capital
Thesis on Enovix - $ENVX - Jan 22, 2025 by Massif Capital
Equinox Gold - $EQX - Jan 22, 2025 by Massif Capital
G Mining Ventures - $GMIN - Jan 22, 2025 by Massif Capital
Thesis on Devon Energy - $DVN - Jan 20, 2025 by Alpha Wealth Funds – The Insiders Fund
Thesis on Lavras Gold - $LFC - Jan 21, 2025 by Equity Management Associates
Thesis on Vistry Group PLC - $VTY.l - Jan 21, 2025 by Asheville Capital Management
Thesis on InPost - $INPST - Jan 21, 2025 by Asheville Capital Management
Thesis on Eurocell - $ECEL.l - Jan 20, 2025 by Colebrooke Partners
Iljin Electric (Korea) - $103590 - Dec 31, 2024 by Apis Flagship Fund
Lotes (Taiwan) - $3533 - Dec 31, 2024 by Apis Flagship Fund
Osaka Soda (Japan) - $4046 - Dec 31, 2024 by Apis Flagship Fund
Talen Energy (U.S.) - $TLN - Dec 31, 2024 by Apis Flagship Fund
Thesis on OceanFirst Financial - $OCFC - Dec 31, 2024 by Third Avenue Small-Cap Value Fund
Thesis on Ambac Financial Group - $AMBC - Dec 31, 2024 by Third Avenue Small-Cap Value Fund
Thesis on Five Point Holdings - $FPH - Dec 31, 2024 by Third Avenue Small-Cap Value Fund
Thesis on Berkeley Group Holdings PLC - $BKGH.l - Dec 31, 2024 by Third Avenue Real Estate Value Fund
Thesis on Big Yellow - $BYG.l - Dec 31, 2024 by Third Avenue Real Estate Value Fund
Thesis on TAG Immobilien - $TEGG - Dec 31, 2024 by Third Avenue International Real Estate Value Fund
Thesis on Hong Kong Land Holdings Ltd. - HKLB.l - Dec 31, 2024 by Third Avenue International Real Estate Value Fund
Thesis on RCI Hospitality - $RICK - Jan 25, 2025 by Ace River Capital
Thesis on Zimmer Biomet - $ZBH - Jan 21, 2025 by Quest for Yield
Thesis on Avanos Medical - $AVNS - Jan 18, 2025
Investor concerns arose after a reduced 2024 earnings guidance and CEO retirement.
Core strengths lie in undervalued digestive health and pain management franchises.
Anticipated revenue, margin, and EPS growth in 2025.
Seen as a potential acquisition target.
Valuation:
Trades at 6.2x 2025 EBITDA.
Price target: $24.50 (54% upside).
Highlights significant undervaluation with strong growth potential.
SOURCES:
Rewey Asset Management
https://www.reweyassetmanagement.com/
Jan 18, 2025
q4 2024
Thesis on Weatherford International plc - $WFRD - Jan 18, 2025
Weatherford International plc provides global oilfield services and equipment, specializing in technologies for drilling, evaluation, production, and optimization in the energy sector
Global provider of oilfield services with a diversified revenue base across high-growth regions like the Middle East and Latin America.
Focuses on high-margin segments, including offshore drilling, digital subsurface evaluation, and artificial lift.
Post-2019 restructuring: strengthened balance sheet, reduced debt, and achieved industry-leading EBITDA margins (~25%).
Benefits from long-term contracts and exposure to high-demand oilfield services sectors.
Potential acquisition target for major players like Baker Hughes or Halliburton.
Valuation:
Price Target: $114 per share, a 59.2% upside from $71.63.
Valuation Metrics: EV/EBITDA of 4.44x (below peers: Schlumberger at 6.7x, Halliburton at 6.1x, and Baker Hughes at 9.1x).
Dividend Yield: 1.4%. and 500 millionshare repurchase program
52-Week High: Trading 46.9% below its 2024 high of $135.
Free Cash Flow: $1.2 billion since 2019; projected $500 million in 2024 (FCF yield: 9.7%).
Financial Strength: Net debt-to-EBITDA of 0.53x, no debt maturities until 2030.
Senior Notes: 2030 notes (8.625%) trade at a 3.4% premium to face value.
SOURCES:
Rewey Asset Management
https://www.reweyassetmanagement.com/
Jan 18, 2025
q4 2024
Thesis on Millicom - $TIGO - Jan 16, 2025
Millicom is a Latin American telecommunications operator providing mobile and broadband services..
Atlas Investments (Iliad Group) increased stake to 40%.
Achieved $250M+ in annual savings.
FCF Growth: Positive inflection; multiple FCF target upgrades.
Corporate Simplification: Single US ticker (TIGO) by Q1 2025.
Key Moves:
Tower assets sold to SBA Communications. $975M from tower sale.
Acquisition of Telefónica’s Colombia operations. $1B Telefónica Colombia acquisition.
Shareholder Returns:
Dividend reinstated.
New share buyback program.
Future Potential: Strong FCF growth, re-rating potential, and reduced competition.
Valuation
Takeover Offer: Atlas bid $24 → $25.75 per share, rejected as undervaluing the company.
Attractive Metrics:
$650M expected equity FCF in 2024.
Market capitalization of ~$4B.
Leverage reduced to 2.5x EBITDA ahead of 2025 target.
SOURCES:
Longleaf Partners International Fund
https://southeasternasset.com/mutual-fund-commentaries/?f=international
Jan 16, 2025
Q4 2024
Thesis on Perrigo Company plc - $PRGO - Jan 17, 2025
Perrigo Company plc is a leading global provider of over-the-counter (OTC) consumer healthcare products, specializing in private-label pharmaceuticals, self-care products, and infant formula.
Business Transformation: Shift from generics to high-margin OTC self-care products after divesting its generic drug business.
Margin Expansion: Targeting 40% adjusted gross margin through cost-cutting initiatives.
Earnings Growth: EPS projected to grow from $2.58 in 2024 to $3.25-$3.50 in 2025-2026.
Competitive Advantages: Strong retailer relationships and expertise in FDA regulations, with growing acceptance of private-label products.
Debt Reduction: Aggressive debt paydown supported by strong cash flow generation.
Valuation:
Current Valuation: Trading at ~10x 2024 EPS ($2.58).
Target P/E Multiple: 14-15x in 2025-2026.
Target Stock Price: $50, nearly double the current price.
Upside Potential: Implies a 30-35% annualized return over the next two years.
Return Expectation: Estimated 30-35% annualized IRR.
SOURCES:
White Falcon Capital Management
https://www.whitefalconcap.com/
https://www.whitefalconcap.com/_files/ugd/2e6ec1_6ad1d85274d24b73bcb5d1c986c77156.pdf
https://twitter.com/WhiteFalconCap
Jan 17, 2025
q4 2024
Thesis on Lithium Americas Argentina - $LAAC US - Jan 22, 2025
Lithium Americas Argentina (LAAC US) is a lithium mining company focused on developing and operating the Caucharí-Olaroz lithium brine project in Argentina.
Strong Asset: Owns a stake in the newly operational Caucharí-Olaroz lithium brine project.
Production Growth: 2024 output of 25kt, increasing to 30-35kt in 2025.
Operational Efficiency: Utilization at 75-88%, with further optimization expected.
Cost Structure: Long-term operating cost of ~$6.5/kg, improved by 7% from mid-2024.
Profitability: Estimated 43% cash operating margin based on current lithium prices.
Market Sentiment Disconnect: Stock affected by weak lithium sentiment, but fundamentals remain strong.
Valuation
Caucharí-Olaroz NAV (100%): $3.6 billion
LAAC’s Attributable NAV: $1.6 billion
Current Market Cap: $486 million
Implied Upside: +229%
Stock trades at only ~30% of its NAV share, indicating significant undervaluation.
Expected Re-Rating: Market must adjust valuation as cash flow materializes.
SOURCES:
Massif Capital
https://www.massifcap.com/
https://twitter.com/wmthomson22
Jan 22, 2025
Q4 2024
Thesis on Alphamin Resources - $AFM - Jan 22, 2025
Industry Leader: Operates the world’s highest-grade tin mine in the DRC, supplying key industries (electronics, EVs, solar).
Strong Financials: +122% EPS growth (LTM Q3 2024), 15%+ ROIC for 11 consecutive quarters.
Market Tailwinds: Tight tin supply, growing demand, declining global inventories.
High-Quality Asset: Long mine life, efficient operations.
Valuation:
Stock Mispricing: +122% EPS growth vs. only +20% stock appreciation since 2021.
High Dividend Yield: 10.9%, offering strong cash returns.
Sustained Profitability: 15%+ ROIC for 11 straight quarters.
Undervalued Cash Generator: Strong fundamentals despite geopolitical risks.
SOURCES:
Massif Capital
https://www.massifcap.com/
https://twitter.com/wmthomson22
Jan 22, 2025
Q4 2024
Thesis on Enovix - $ENVX - Jan 22, 2025
Develops next-gen silicon-anode lithium-ion batteries with 30%+ higher capacity than conventional batteries.
Transitioning from R&D to mass production, with Fab-2 scaling by 2025/2026.
Strong commercial traction:
First mobile battery order (late 2024).
Prepaid order from a Silicon Valley tech giant for mixed reality wearables (scaling in 2026).
Growing U.S. military interest due to China-free supply chain.
Potential geopolitical advantage from U.S. tariffs on Chinese battery imports.
Valuation
100% annualized volatility, 30%+ short interest, potential for short squeeze.
Market mispricing Enovix as a "story stock", but Massif Capital sees a re-rating opportunity.
Multi-bagger potential, citing their 336% return on Siemens Energy (ENR GY) in 2.7 years.
Key catalysts for re-rating:
Fab-2 mass production (2025/2026).
Major commercial orders (mobile, wearables, military).
Recognition as a real battery manufacturer.
SOURCES:
Massif Capital
https://www.massifcap.com/
https://twitter.com/wmthomson22
Jan 22, 2025
Q4 2024
Equinox Gold - $EQX - Jan 22, 2025
A mid-tier gold mining company focused on developing and operating low-cost gold mines in the Americas.
Owns Greenstone, one of Canada’s largest and lowest-cost gold mines.
Targeting 1M ounces/year production.
AISC expected to drop ~20% in 2025, ~10% in 2026.
Leverage improved from 3.7x (2023) to 2.2x but remains a concern.
2025 is crucial for proving cash flow generation.
Valuation:
Valuation depends on achieving production and cost reduction targets.
Potential for a re-rating upon execution of expansion strategy.
SOURCES:
Massif Capital
https://www.massifcap.com/
https://twitter.com/wmthomson22
Jan 22, 2025
Q4 2024
G Mining Ventures - $GMIN - Jan 22, 2025
A junior gold mining company specializing in developing and operating high-quality, low-cost gold projects, with a strong focus on mine construction and efficiency.
Operates Tocantinzinho mine (Brazil), in production since 2024.
Acquired Reunion Gold, advancing Oko West project.
Strong management (Gignac family) with a track record of mine building.
Expected production: 175,000+ oz in 2025 at AISC of $900/oz.
Valuation:
Share price target: $18–$22, with further upside potential in 2025.
Oko West valued at >$1B, with AISC of $986/oz.
Valuation depends on ramp-up of Tocantinzinho and Oko West advancement.
SOURCES:
Massif Capital
https://www.massifcap.com/
https://twitter.com/wmthomson22
Jan 22, 2025
Q4 2024
Thesis on Devon Energy - $DVN - Jan 20, 2025
Leading independent U.S. energy company in oil, natural gas, and NGLs.
1.8 billion Boe reserves (29% natural gas, 28% NGLs, 43% petroleum).
Strong insider buying history; last major purchase: CEO Muncrief ($666K at $44.42).
CEO Muncrief retiring in March 2025; COO Clay Gaspar to succeed.
Market undervaluing assets, especially 29% natural gas reserves.
Potential turnaround due to recent hydrocarbon price movements.
Valuation
Trading at a P/E of 6.7.
Revenue: $14.5B, Net Profit Margin: 23.4% (last 12 months).
Competitor EQT trades at P/E of 73.1 with a lower 6.8% margin.
Strong revaluation potential as other natural gas companies have appreciated.
SOURCES:
Alpha Wealth Funds – The Insiders Fund
https://www.theinsidersfund.com/the-insiders-fund/
https://twitter.com/AlphaWealthFund
Jan 20, 2025
Q4 2024
Thesis on Lavras Gold - $LFC - Jan 21, 2025
Junior gold exploration company (LGC-VC, LGCFF), spun out from Amarillo Gold.
Focus on drilling and exploration with promising mineralization.
1M ounces of 43-101 compliant gold; potential for 3M-10M ounces.
Strong management team, favorable mining jurisdiction.
Strategy: expand resources through drilling to attract acquirers or partners.
High-risk exploration stage with significant upside potential.
Valuation:
Market cap: $85M (USD).
Potential acquisition value: $300M-$750M ($100-$250/oz).
Conservative valuation (3M ounces at $100/oz) suggests a 3.5x multiple.
SOURCES:
Equity Management Associates
https://ema2.com/
https://ema2.com/wp-content/uploads/2025/01/Q4_2024_Letter.pdf
https://twitter.com/LawrenceLepard
Jan 21, 2025
Q4 2024
Thesis on Vistry Group PLC - $VTY.l - Jan 21, 2025
Business Model Shift: Moving to a capital-light partnerships model, eliminating speculative land acquisition.
Capital Efficiency: 50% of homes pre-sold, driving faster cash conversion and >40% ROIC.
Market Demand: Targeting the UK’s 4M+ housing shortfall, focusing on resilient affordable housing.
Competitive Advantage: 60+ local authority partnerships and modular construction for higher win rates.
Leadership: CEO Greg Fitzgerald (10% ownership) has a strong turnaround track record.
Capital Return Plan: £1B reallocated to share buybacks by 2026.
Valuation
Stock Price Drop: Down 57% from 52-week high due to profit warnings and project delays.
Earnings Impact: 2024 profit cut from £430M to £250M due to a £105M cost understatement (reducing to £50M in 2025).
Future Profitability: Targeting £800M operating profit in 3-5 years.
Valuation Potential: If profits hit £800M, at 12-20x earnings, market cap could reach £10B-£16B (£30-48/share). vs £6 price per share
Deep Discount: Trades below tangible book value, with a £1B buyback program boosting per-share value.
Investment Opportunity: Large margin of safety and asymmetric return potential.
SOURCES:
Asheville Capital Management
https://www.ashevillecapitalmanagement.com/
https://www.dropbox.com/scl/fi/7yvb72pic3ll1cdt25cdf/Asheville-Capital-Annual-Letter-2024.pdf?rlkey=nl0kein3g0vs90ge1rmtvr1a6&st=xg55lxdp&dl=1
https://x.com/Jake___Barfield
Jan 21, 2025
Q4 2024
Thesis on InPost - $INPST - Jan 21, 2025
Strong growth: Revenue +53%, EBITDA +81%, EPS +130% since initial investment.
Improved profitability: ROIC grew from ~0% (2022) to nearly 20% (2024).
Market dominance: 50% market share in Poland, preferred by 80% of Polish online shoppers. Free cash flow from Poland is expected to reach PLN ~1.4 billion in 2024.
Expanding internationally: UK, France, Spain, and Italy; APMs achieve 14-month payback.
High barriers to entry: $1.5B+ required to compete; 52,000+ merchant integrations.
Competitor struggles: Lower throughput, poor payback rates, multiple exits from the market.
Valuation
Current valuation: PLN 40B enterprise value, trading at 9x NTM EV/EBITDA & ~34x NTM FCF.
Future growth projections:
15% revenue CAGR (next 5 years).
EBITDA margins to reach 40%.
EBITDA-to-FCF conversion rate at 50%.
5x increase in FCF (PLN 4.5B), at a 38% CAGR.
SOURCES:
Asheville Capital Management
https://www.ashevillecapitalmanagement.com/
https://www.dropbox.com/scl/fi/7yvb72pic3ll1cdt25cdf/Asheville-Capital-Annual-Letter-2024.pdf?rlkey=nl0kein3g0vs90ge1rmtvr1a6&st=xg55lxdp&dl=1
https://x.com/Jake___Barfield
Jan 21, 2025
Q4 2024
Thesis on Eurocell - $ECEL.l - Jan 20, 2025
Business Model: Two divisions—Profiles (PVC manufacturing & recycling) and Building Plastics (branch network selling Eurocell & third-party products).
Market Position: One of Europe’s largest PVC recyclers, UK’s preferred supplier for new-build windows and doors.
Historical Performance: Double-digit operating margins and 20%+ ROIC, though recent financials impacted by a weak UK RMI and housing market.
Growth Strategy:
Branch expansion & optimization (+10% more locations).
Improved windows & doors offering (scaling successful trials).
Expansion into garden rooms & extensions (new revenue stream).
Operational Enhancements: ERP upgrade & efficiency improvements to drive margin growth.
Capital Allocation: Disciplined approach, evidenced by share buybacks.
Growth Outlook: 15%-20%+ annual earnings growth from FY25 onwards.
Management Target Metrics: £500m sales, 10% operating margin (vs. £150m enterprise value). Maybe too optimistic.
Valuation
Purchase Price: ~10x earnings.
Expected Return: IRR well above 15%.
SOURCES:
Colebrooke Partners
https://www.colebrookepartners.com/
Jan 20, 2025
Q4 2024
Iljin Electric (Korea) - $103590 - Dec 31, 2024
Leading Korean electrical equipment manufacturer, specializing in transformers.
Robust order backlog ensures revenue visibility through the decade.
Expected 50%+ EPS growth in 2025, driven by global demand.
Valuation
Trades at 12x earnings
SOURCES:
Apis Flagship Fund
Dec 31, 2024
Q4 2024
Lotes (Taiwan) - $3533 - Dec 31, 2024
Leading Taiwanese connector manufacturer.
Key Clients: Supplies Intel and AMD.
AI Growth Opportunity: Positioned to benefit from AI chip transition to connector solutions.
Strong Track Record: 25% annual growth history.
Valuation
Trades at 19x earnings
SOURCES:
Apis Flagship Fund
https://apiscapital.com/
Dec 31, 2024
Q4 2024
Osaka Soda (Japan) - $4046 - Dec 31, 2024
Leading Japanese chemicals company, dominant in healthcare, supplying key components for blockbuster peptide drugs.
Growth: Strong demand, healthcare division expanding at 20-30% annually.
Valuation
Trades at 14x forward P/E, with 100%+ upside potential.
SOURCES:
Apis Flagship Fund
https://apiscapital.com/
Dec 31, 2024
Q4 2024
Talen Energy (U.S.) - $TLN - Dec 31, 2024
Independent power producer with a major nuclear plant, positioned to benefit from rising energy demand driven by data center expansion.
Catalysts: Securing high-value contracts.
Capital Allocation: Management executing an aggressive share repurchase program to capitalize on undervaluation.
Valuation
Trades at 12x 2026 free cash flow.
SOURCES:
Apis Flagship Fund
https://apiscapital.com/
Dec 31, 2024
Q4 2024
Thesis on OceanFirst Financial - $OCFC - Dec 31, 2024
Is a regional bank headquartered in New Jersey
Established & Status: Founded in 1902, now a "large institution" under the Volcker Rule.
Loan Portfolio: Primarily commercial real estate, with strong credit performance and low net charge-off rates.
Financial Strength: Investment-grade status from Moody’s; stable, diversified deposit base.
Conservative Lending: Lower-than-industry returns but strong financial stability.
Growth Potential: Opportunities to enhance returns and shareholder value through strategic capital allocation.
M&A Potential: Positioned for industry consolidation; attractive deposit base for larger banks.
Valuation
Acquisition Price: 62% of book value, 89% of tangible book value.
Market Multiples: Trading at 10.4x earnings.
Dividend Yield: 4.42%, well covered.
SOURCES:
Third Avenue Small-Cap Value Fund
https://thirdave.com/strategy-tascx/
https://www.thirdave.com/tascx-shareholder-letter
Dec 31, 2024
Q4 2024
Thesis on Ambac Financial Group - $AMBC - Dec 31, 2024
Transitioning from financial guarantee provider to asset-light insurance model.
Selling legacy business to Oaktree Capital for $420M in cash, eliminating debt.
Retaining $1.3B in tax-loss carryforwards.
Focusing on managing general agents in Excess & Surplus (E&S) insurance.
Strategy: acquisitions, operational efficiencies, and leveraging tax assets.
Targeting NAV growth through business expansion and capital deployment.
Valuation
Trades at a discount to NAV, with revaluation potential.
Capital redeployment and execution critical to unlocking hidden value.
SOURCES:
Third Avenue Small-Cap Value Fund
https://thirdave.com/strategy-tascx/
https://www.thirdave.com/tascx-shareholder-letter
Dec 31, 2024
Q4 2024
Thesis on Five Point Holdings - $FPH - Dec 31, 2024
Real estate operator with strategic land holdings in Los Angeles, San Francisco, and Irvine.
Plans: 40,000+ homes and 23M sq. ft. of commercial space.
Past issues: High overhead, unclear financials, project delays (Shipyards, San Francisco).
Recent improvements:
50% cost reduction under new leadership.
Accelerated land monetization (Valencia & Great Park).
Debt reduction and extended maturities.
$300M+ expected cash balance by year-end.
Candlestick Point (San Francisco) development to resume in 2025 with potential capital partners.
Valuation
Stock trades at <30% of book value.
NAV estimate: Stock valued at over 4x below intrinsic worth.
Potential return to net cash position if execution succeeds.
Expected valuation multiple expansion with asset monetization and operational progress.
SOURCES:
Third Avenue Small-Cap Value Fund
https://thirdave.com/strategy-tascx/
https://www.thirdave.com/tascx-shareholder-letter
Dec 31, 2024
Q4 2024
Thesis on Berkeley Group Holdings PLC - $BKGH.l - Dec 31, 2024
Real Estate Focus: Specializes in residential-led regeneration in London & Southeast England.
Financial Strength: Net cash position and a land bank with planning for 50,000+ homes in supply-constrained areas.
Strong Management: Leadership team with significant ownership and a solid capital allocation track record.
Operational Efficiency: Builds ~10% of new London homes and compounds net worth at 10%+ annually.
Strategic Growth: Developing a private rental sector (PRS) platform and returning capital through share repurchases and special dividends.
Valuation
Undervalued Stock: Trades at <10x P/E and 1.1x price-to-book, among the lowest in 15 years.
Potential Upside: Expected to at least revert to its run-off value as UK interest rate volatility subsides.
Shareholder Returns: Unlocking value through share buybacks and special dividends.
SOURCES:
Third Avenue Real Estate Value Fund
https://thirdave.com/strategy-tarex/
https://www.thirdave.com/shareholder-letters/real-estate-value-fund-q424
Dec 31, 202024
Q4 2024
Thesis on Big Yellow - $BYG.l - Dec 31, 2024
Sector & Focus: U.K.-based REIT specializing in self-storage with 109 facilities (6.4M sq. ft.), primarily in London.
Competitive Advantage: Hard-to-replicate urban portfolio in a high-demand market.
Management: Led by founding team with a disciplined, long-term capital allocation strategy.
Growth Potential: Cash flow expected to grow >10% annually through lease renewals, vacancy fill-up, and new developments.
Financial Strength: Low <15% loan-to-value ratio, ensuring financial flexibility.
Valuation
Current Valuation: Trades at a 7.5% cap rate and 0.7x price-to-book, lowest in a decade.
Undervalued Assets: Market price does not reflect upside from lease-up despite ~20% vacancy rate.
Potential Revaluation: Expected valuation gap to narrow through execution or potential industry consolidation at higher private market values.
SOURCES:
Third Avenue Real Estate Value Fund
https://thirdave.com/strategy-tarex/
https://www.thirdave.com/shareholder-letters/real-estate-value-fund-q424
Dec 31, 202024
Q4 2024
Thesis on TAG Immobilien - $TEGG - Dec 31, 2024
Owns 83,000 rental units in Germany and 3,000 in Poland, aiming for 10,000 units in Poland within 4 years.
Funds Polish expansion through profits from homebuilding subsidiary ROBYG.
Stable cash flows from German rentals due to regulated rent growth and limited new supply.
Polish rental market offers high growth potential due to strong demand, urbanization, and outdated housing stock.
Strategy combines Germany’s stability with Poland’s free-market growth.
Valuation
P/B < 0.4x
Stock trades below replacement cost; German rental units valued at $66,000 per unit.
Polish business not priced in, creating potential upside.
Significant valuation discount vs. private market values.
Re-rating opportunity as market recognizes earnings stability and Polish expansion potential.
SOURCES:
Third Avenue International Real Estate Value Fund
https://thirdave.com/
Dec 31, 2024
Q4 2024
Thesis on Hong Kong Land Holdings Ltd. - HKLB.l - Dec 31, 2024
Subsidiary of Jardine Matheson, managed by the Keswick family for five generations.
Owns premium mixed-use real estate in Hong Kong, Singapore, and Shanghai.
Dominates Hong Kong’s Central district with 4.8 million sq. ft. of office and luxury retail properties.
European luxury brands investing U.S.$600 million in flagship store expansions within HKL’s portfolio.
Strong financials with A and A3 credit ratings.
Strategic shift to focus on high-barrier-to-entry real estate in Asian gateway cities.
Plans include $10B real estate divestment, 20% share buyback, improved governance, and a $100B asset management target.
Valuation
Trades at a deep discount to private market values.
Announced buyback of ~20% of market cap.
Projects 7%+ annual earnings & dividend growth for the next decade.
Expects dividend yield to rise from 5% to 10% over 10 years.
Estimated “mid-teens” annual return, with potential upside if valuation multiple expands.
SOURCES:
Third Avenue International Real Estate Value Fund
https://thirdave.com/
Dec 31, 2024
Q4 2024
Thesis on RCI Hospitality - $RICK - Jan 25, 2025
Unique Market Position: Only publicly traded owner of adult nightclubs in the U.S., operating 57 clubs and 14 sports-bar restaurants (Bombshells).
High Barriers to Entry: Strict regulations create local monopolies with strong unit economics.
Growth Through Acquisitions: Identified 500 potential club acquisitions, positioning itself as the preferred buyer.
Expansion into Digital: Launched Favoritely.com, an OnlyFans-style platform with revenue-sharing for entertainers.
Potential Business Shift: Favoritely.com could outgrow the nightclub business and change how RICK is valued.
Positive Performance: Nightclub segment has returned to same-store sales growth over the past two quarters.
Management Strategy: Focused on acquisitions and share buybacks to enhance long-term shareholder value.
Valuation
Potential Multiple Expansion: Favoritely.com could significantly increase company valuation if it scales successfully.
Strong Financial Position: Holding $30 million in cash, enabling strategic acquisitions at attractive prices.
SOURCES:
Ace River Capital
https://acerivercapital.com/
https://acerivercapital.com/documents
https://twitter.com/AceRiverCapital
Jan 25, 2025
Q4 2024
Thesis on Zimmer Biomet - $ZBH - Jan 21, 2025
MedTech Leader: #1 in hip & knee replacements, operating in 100+ countries.
Growing Market: Aging population & demand for minimally invasive surgeries drive growth.
Innovation: 50+ new product launches by 2027, strong pipeline in robotics & smart implants.
Operational Efficiency: Streamlining operations & optimizing supply chain.
Market Share Expansion: Comprehensive portfolio, including navigation & robotics.
Shareholder Returns: High FCF conversion, strong buyback & dividend strategy.
Valuation:
Attractive Multiple: Trading below 20x FCF or 12x FCF in 3 years.
Strong Growth: 70%+ projected FCF growth in 3 years.
Capital Returns: 65%+ of FCF returned to shareholders.
Buyback Yield: Above 5%, signaling undervaluation.
SOURCES:
Quest for Yield
https://x.com/QuestforYield/status/1881723989938061705