Yet Another Value Podcast

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Chris Colvin thinks Veritas is stealing $HMHC Mar 17, 2022

Show notes

Chris Colvin returns to the podcast to discuss why he invested in Houghton Mifflin Harcourt (HMHC) and why he thinks the deal to sell HMHC to Veritas is much too cheap.
Breach Inlet's letter to HMHC: https://www.businesswire.com/news/home/20220223005845/en/Breach-Inlet-Capital-Sends-Public-Letter-to-Board-of-Houghton-Mifflin-Harcourt
My notes on HMHC: https://twitter.com/AndrewRangeley/status/1503704685861273604?s=20&t=BJwJj9NIUfEf4nip2Hlf4w
Chapters
0:00 Intro
1:15 HMHC Overview
6:45 Situation Recap
9:00 Why does Chris believe this deal is too cheap?
13:05 HMHC's strange forecast and massive revision
19:35 HMHC's advisors conflict of interest
22:55 Why did management and the board chose to sell the company now?
28:00 HMHC's roll up potential
31:25 Veritas's other edtech plays
33:35 How does this play out from here?
34:05 What if the tender fails and Veritas walks away?
49:00 Did HMHC's projections undersell the stimulus money impact?
51:00 Closing thoughts

Louis Camhi on the opportunities in the SPAC market Mar 07, 2022

Show notes

Louis Camhi provides an update on his thesis for ORGN and then walks through where he's finding opportunities in the SPAC market today.
Louis's first podcast appearance: https://twitter.com/AndrewRangeley/status/1428710432848613377?s=20
Chapters
0:00 Intro
1:45 Origin Update
5:55 Origin today versus their SPAC projections
8:45 When will we start seeing unit economics for ORGN plants?
12:55 Talking about the SPAC market today
17:30 Opportunities in current SPAC IPOs
21:30 What pre-deal SPACs does Louis like currently?
23:20 What to make of companies that are flying after the deSPAC
27:30 Are pre-deal SPAC warrants attractive right now?
36:45 CND / Circle
45:40 What to make of deals like FMAC that reward shareholders for not redeeming?
49:00 SPACs with rights like BENE and ESSC

Jeremy Raper is going FAR Feb 28, 2022

Show notes

Jeremy Raper returns to the podcast to discuss his recent semi-activism at FAR Ltd. FAR recently received a bid that Jeremy thinks dramatically undervalues the company, so Jeremy is pressuring the company to cut costs and aggressively return capital to shareholders.
My tweet thread on FAR: https://twitter.com/AndrewRangeley/status/1496863885122539520?s=20&t=UK4pHbZdyRecEFP_I46_UQ
Chapters
0:00 Intro
1:50 FAR overview
7:20 Recapping the valuation case
13:10 Acquirer optionality at FAR
16:45 FAR's historical mismanagement
23:10 What put FAR in play
31:00 Jeremy's proposal for FAR
36:45 What if management goes scorched earth here?
48:40 Closing FAR thoughts
50:15 LastMinute (LMN) discussion

Bill Chen breaks down $FRPH's SOTP Feb 22, 2022

Show notes

Bill Chen, an institutional real estate investor, goes through his thesis for FRPH. FRPH is a conservatively managed real estate company with a great management team and a history of growing NAV and monetizing assets at opportunistic times.
You can find all my writings here: https://yetanothervalueblog.substack....
My notes on FRPH: https://twitter.com/AndrewRangeley/st...
A rough SOTP for FRPH: https://twitter.com/RhizomePartners/s...
Chapters
0:00 Intro
1:20 FRPH overview
3:30 Discussing FRPH's management team / majority shareholder
8:00 Understanding the royalty business
14:15 Valuing the royalty business
21:20 FRPH's balance sheet and net cash
22:15 FRPH's real estate value
32:00 Pulling the SOTP together
33:45 Opportunity cost and alpha at FRPH
39:25 FRPH's history of selling assets
40:30 How is FRPH still acquiring warehouse plays?
43:00 Why FRPH versus other REITs under NAV?
47:10 FRPH versus SRG
52:00 Why isn't FRPH buying shares right now?
57:00 What keeps Bill up at night for FRPH?
1:02:30 Closing thoughts

Jon Boyar thinks SMG's stock is set to grow Feb 07, 2022

Show notes

Jon Boyar from the Boyar Value Group returns to the podcast to discuss his high conviction thesis for Scotts Miracle-Gro (SMG). SMG was a massive COVID beneficiary, and shares have sold off in kind with other COVID beneficiaries. Jon thinks the market is too pessimistic here, SMG's brands have Coke like market share, and the company has a rapidly growing "picks and shovels" cannabis business that he believes investors are basically getting for free at current prices
You can find all my writings here: https://yetanothervalueblog.substack.com/
My notes on SMG: https://twitter.com/AndrewRangeley/status/1489600380854013952?s=20&t=c24bhjV0UhOWlZWjgULoCw
Boyar's interview w/ SMG's CEO: https://www.boyarvaluegroup.com/podcasts/james-hagedorn-scotts-miracle-gro-chief-executive-officer-and-chairman-of-the-board-on-the-tremendous-opportunity-in-the-cannabis-space-potentially-spinning-off-the-fast-growing-hawthorne-division/
Boyar's SMG overview: https://www.lp.boyarvaluegroup.com/smg2021
Boyar's Forgotten Forty: https://www.lp.boyarvaluegroup.com/andrewwalker
Chapters
0:00 Intro
1:35 SMG Overview
5:50 Why are SMG's brands so dominant?
9:50 Customer concentration risk for SMG
11:55 What happens to earnings as they lapse the "COVID boom"?
17:50 Discussing Hawthorne
21:30 What is Hawthorne's moat?
24:45 Federal legalization and Hawthorne's sales distribution
27:40 Why is Hawthorne's growth slowing right now?
29:45 Hawthorne's cannabis investment strategy
34:00 How SMG got into Hawthorne and look at it long term
36:20 Breaking down SMG's SOTP
40:00 The rationale for a potential Hawthorne spin
45:40 Closing SMG thoughts
48:25 Other interesting forgotten 40 names

Rich Howe thinks NXDT could be the next NXRT Feb 03, 2022

Show notes

Rich Howe, founder of stock spinoff investing, walks through the bull case for NXDT. NXDT is a closed end fund trading at a huge discount to NAV; the fund is planning to transition to a REIT and Rich thinks that makes the stock very catalyst rich. A related company, NXRT, pursued a similar move ~6 years ago and their stock has gone up ~6x since.
You can find all my writings here: https://yetanothervalueblog.substack.com/
My thread on NXDT: https://twitter.com/AndrewRangeley/status/1488504533709991943?s=20&t=1i5ngJavxgKCHeNtsTWz1A
Rich's twitter: https://twitter.com/stockspinoffss
Stock Spinoff Investing: https://stockspinoffinvesting.com/premium/
Chapters
0:00 Intro
1:40 NXDT overview
6:55 Insider buying
9:45 NXRT parallels
12:00 NXDT's discount to NAV
13:10 NXDT's level 3 assets and their valuation
16:45 Vinebrook homes, one of NXDT's holdings
24:30 Why has NXDT's NAV discount widened?
27:10 NXDT investing into controlled entities
31:30 What is NXDT's post-REIT strategy?
34:30 Why is it taking so long to switch to a REIT?
37:50 Will NXDT buyback shares?
40:00 NXDT's fees
43:30 Post-REIT dividend policy
47:55 Closing NXDT thoughts
50:00 Rich's favorite recent spin: JXN
55:00 BHC: the spin Rich is looking forward to the most

Josh Young journeys through the energy sector Jan 27, 2022

Show notes

Josh Young, CIO of Bison Investments, discusses his thoughts on the oil market and why he thinks energy prices are going much higher. Then he dives into his thesis for Journey Energy (JOY CN in Canada), a micro cap Canadian company that he thinks is dramatically undervalued.
You can find all my writings here: https://yetanothervalueblog.substack.com/
Josh's Twitter: https://twitter.com/Josh_Young_1
Chapters
0:00 Intro
1:45 How Josh is thinking about the oil market today
6:30 When do you know oil is high enough?
10:25 Why aren't we seeing a big capex / opex ramp up from oil companies?
15:45 OPEC's lack of incremental capacity
19:35 Is calling for higher oil Big Short 2.0?
24:50 Why the oil market today is not the oil market from 2014
28:50 Small technical difficulty!
31:10 Why $100+ oil won't sap demand
34:30 What do energy specialists look for that generalists miss?
37:15 Do generalists lean towards worse assets than specialists?
40:00 Journey Energy overview
45:20 Breaking down Journey's SOTP
48:15 Journey's growth and decline profile
50:00 How are Journey's base assets positioned?
53:30 What oil and gas price is baked into Journey currently?
54:10 Journey's power plant initiative
57:20 What type of power is Journey's power plant?
58:50 Journey's Asset Retirement Obligations
1:06:35 Closing thoughts on Journey

Keith Smith thinks TIGO is a cheap special situation Jan 24, 2022

Show notes

Keith Smith, Portfolio Manager at Bonhoeffer Capital, discusses his thesis for Millicom ($TIGO). TIGO is trading at a super low multiple and a recent deal that the CEO described as a "no brainer" will result in a rights offering for TIGO, which could set the stock up as a special situation as well. Keith breaks down why he likes TIGO versus other telecom stocks, why he thinks the stock is so cheap, and the hidden value potential at TIGO money.
You can find all my writings here: https://yetanothervalueblog.substack....
My notes on TIGO: https://twitter.com/AndrewRangeley/st...
Keith's twitter: https://twitter.com/Bonhoeffer_KDS
Chapters
0:00 Intro
1:20 TIGO overview
4:30 How TIGO's ownership culture sets them apart
8:30 TIGO background
11:50 More on TIGO's culture and their CHTR like model
15:55 Why TIGO over other telecoms like LILAK or LUMN?
23:30 TIGO money, TIGO's big fintech call option
31:00 Discussing TIGO's largest market, Guatemala
36:00 Breaking down TIGO's rights offering
43:00 Is TIGO's equity focused culture a red flag?
46:05 A mini-rant on Liberty's management compensation
48:40 Could TIGO be a perennial value trap?
54:20 LILAK's 2019 bid for TIGO: value marker or red flag?
58:30 Keith's closing TIGO thoughts
1:02:30 Bonus discussion on broadcasters like NXST

Vadim Perelman's Basic-Fit thesis $BFIT Jan 13, 2022

Show notes

Vadim Perelman goes through his thesis on Basic-Fit (BFIT) and why he thinks it could be a ~10x in ~10 years. Key topics include a detailed walk through the unit economics and why competitors won’t be able to open new gyms once the company “fortresses” their markets.
My notes on BFIT: https://twitter.com/AndrewRangeley/st...
Vadim's BFIT write up: https://punchcardstocks.substack.com/...
Chapters
0:00 Intro
1:00 BFIT intro
6:55 The key BFIT question: is 30%+ ROIC sustainable for gyms
15:00 Why winning the "land grab" precludes competitors in local markets
20:55 How BFIT's scale gives them a cost advantage
25:00 Quick mentions of BFIT's marketing and rent advantages
30:00 Comping BFIT's costs to UK low cost peers
32:50 Why aren't we seeing a faster land share grab by competitors?
40:15 Why isn't BFIT pursuing a franchise model?
46:55 Could BFIT's ROIC go higher over time as penetration goes up?
51:35 What bear cases does Vadim worry about?
56:35 Store aging risk / underinvesting in MCX
59:45 How BFIT uses their scale to bring down employee costs and create a moat
1:05:15 Closing thoughts

Chris DeMuth's best idea for 2022 is $RENN Jan 09, 2022

Show notes

Chris DeMuth discusses his best idea for 2022, RENN. RENN was on a previous podcast pitched by Ian Bezek as a legal play; since then, RENN settled with minority shareholders for a record payout. However, in December, RENN's shares sold off massively as a judge rejected their proposed settlement with minority shareholders and ruled the payout should instead go to former shareholders; Chris explains why he thinks that ruling is wrong and likely to be overturned.
Podcast with Ian Bezek on RENN from April 2021: https://twitter.com/AndrewRangeley/st...
Chris's article on RENN: https://seekingalpha.com/article/4478529-renren-is-so-bad-its-good
Chapters
0:00 Intro
1:50 RENN background
4:20 What's happened since the last RENN podcast
8:20 The settlement announcement in October
12:35 What happens in December / why the stock craters
19:45 Why are current shareholders appealing the judge's ruling?
24:00 What does a derivative suit mean and why is that important?
30:00 Were there any precedents for former shareholders getting the settlement payout?
35:30 Discussing the unique minority shareholder only payout
38:50 Could the settlement be recut to pay directly to the company?
44:50 What does the timeline going forward look like?
46:30 What happens to the "excess legal fees"?
54:30 Why a quick decision on the appeal could be good
57:35 What odds does Chris give for the appeal winning?
1:00:10 Bear push back: The Sprint / TMUS precedent
1:05:40 Closing thoughts

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