Weekly Snack #17
Weekly Snack #17
Weight loss, luxury hotels, financial firms and healthcare facilties
Welcome to Weekly Snacks! This newsletter is home to a weekly compilation of new investment ideas, Twitter posts/threads, general research, and podcasts to help all investors generate ideas that they may have otherwise not been exposed to.
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Investment Pitches
TL;DR:
I recently put out my short thesis on Weight Watchers International WW 0.00%↑ which ended up being more of a post-mortem. Because of personal reasons in 2023, I wasn’t able to sit down and spend the time to write it out. The company’s stock price was fueled by FOMO of GLP-1s but the reality was far from it. Little cash in the bank, high leverage, deterioriating core base and interest coverage made this pipe dream completely unrealistic. I break down my reasoning and the math behind it. At the time of this post, the stock is down 47% YTD.
TL;DR:
Bleeker Street Research put out a short report on LuxHurban Hotels LUXH 0.00%↑, a Miami-based hotel lessee and operator. Bleeker Street highlights trouble for the company with failing to pay rent, management having questionable pasts with other failed companies, and unrealistic guidance expecations. Claims against guidance stem from the math not mathing.
“Somehow a micro cap that has come out of nowhere runs with 17% higher rates, occupancy rates 10-15 percentage points higher than Sunstone’s, and 20-35% higher RevPAR than Sunstone? This is very hard to believe.”
On top of the revenue and guidance figures being questionable, there are plenty of claims of travelers not being refunded and even their auditor isn’t that reassuring about the questions being raised.
Good read.
TL;DR:
Spruce Point Capital Management put out a short report on MSCI Inc. MSCI 0.00%↑. Spruce Point believes that the company is under pressure from having a mature business model that is not holding up to competitors, price gouging clients, and engaging in aggressive accounting to “stretch its financial performance”. Because there are so many issues happening in mutliple areas of the business, Spruce Point believes the company has a ~55-65% downside in the stock price. I will admit, there is multiple rerating that accounts for a lot of that downside.
TL;DR:
put out a long report on a healthcare asset called Medical Facilities Corp DT.TO, who owns a diverse portfolio of highly rated, high-quality surgical facilities in the U.S. Its stock has had a troubled past in regards to the price but has slowly started to rebound. Daikoku does a good job laying out their business, what happened in the past, what’s going on now and supplying the math and in-depth research to back it up. There are risks associated with their thesis (as always) but even despite those, they believe that the stock has a potential 70%+ upside. If you’re trying to get HC exposure, perhaps take some time to read their idea.They post their research via a downloadable PDF once you click through.
Tweets of the Week
General Research
Podcasts & Interviews
Appreciate you taking the time to read Weekly Snacks. I hope you have found at least some of these links to be interesting enough to dive into yourself.
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Until next week,
Paul Cerro
Thank you Paul for the mention. I have been thoroughly enjoying your posts lately.