Weekly Snack #7
Weekly Snack #7
New Equity Idea Generation, Twitter Posts, and General Reasearch of the Week
Welcome to Weekly Snacks! This newsletter is home to a weekly compilation of new investment ideas, Twitter posts/threads, and general research to help all investors generate ideas that they may have otherwise not been exposed to.
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Investment Pitches
TL;DR:
The author shares their thoughts on TopBuild (BLD), the largest installer and distributor of building insulation products in the US and Canada. JustValue highlights the company’s shift from predominantely residential sales to a healthy mix of both residential, commercial, and industrial customers. It also has historically delivered positive capital allocation through internal investments and M&A while keeping leverage low. JustValue beleives that while there are cyclical risks, the company still has a bright future.
TL;DR:
I’ve shared Ragnarok’s work in the past and this one on Vita Coco was a fun read on all the risks and issues associated with Vita Coco (COCO). The author goes into issues with their supply chain which entails a supplier that is caught up in litigation around land grabbing in Brazil and other fraudulent activity. Additionally, the company is losing one of its biggest customers (which accounts for 15-20% of revenues). Despite the YTD performance, Ragnarok believes the stock can tank in the near term.
TL;DR:
Saga Furs (SAGCV) is an auction house that sells furs that is trading at 0.7x NCAV and will benefit from another player liquidating in 2025. While furs aren’t the most culturally friendly these days, the author believes that its largest competitor liquidating the company in 2025 will allow Saga to capture more market share, deliver an earnings boost to what is a fixed cost business. Assuming his math, the company is trading at €43m NCAV vs a market cap of €33m. Quite an interesting situation.
TL;DR:
I love reading M&A arb deals and Siyu once again shares his thoughts on a trade, this time being on the Jetblue (JBLU) and Spirit Airlines (SAVE) M&A deal. Siyu goes through the probability and adjusted probability of the deal going through while highlighting the DOJ case against them. Take a look at his thoughts that breaks down the math in his eyes as well.
TL;DR:
Not to keep plugging Siyu’s work but he also shared an SOTP on IAC (IAC) when it comes to TURO. Siyu breaks down the IAC assets and what he believes the value of each are. Looking at his math, conservative estimates but the TURO stake for IAC post-spin well above what the company is currently trading at. By his math, it’s next to double current levels assuming conservative multiples based on being the “Airbnb for car rentals”.
TL;DR:
Faizan writes his short thesis on WW International (WW) (aka, Weight Watchers) and believes that the company is slowly dying. Earlier in the year, WW acquired Sequence in a pivot to launch their offering of GLP-1s and with fanfare, the stock rallied since. However, the author believes that this pivot is smoke and mirrors to hide the fact that the company at its core (weight loss services) is actually declining. To add insult to injury, the company is highly levered and leaves little room to put resources behind this pivot and investors should be anything but bullish.
Tweets of the Week
General Research
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