Weekly Snacks #38
New Investment Pitches, General Research, and Tweets of the Week
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Cedar Grove Capital Recap
It’s been a pretty busy month of October. We published 7 different reports in the past month. 4 were company-specific Owlet (OWLT) Turnaround; +22%, IPO of KinderCare Learning Center, and pre-earnings updates on GEN Restaurant (GENK) and Hims and Hers Health (HIMS).
Sadly, our arb trade of Tapestry’s (TPR) acquisition of Capri (CPRI) was blocked which was a shocker to most. We shared our final thoughts on the deal here with us announcing that we’d be selling out of our position. Our break price of $20 seemed to be pretty accurate given where the stock is currently trading at.
There’s been much talk about how CPRI could divest Jimmy Choo and Versace to raise cash and turn Kors around on its own. If you're interested in hearing about this take, I go over it and much more on a previously recorded Twitter Spaces.
Lastly, we also shared our Q3’24 portfolio letter and a piece on how robotics is helping improve restaurant-level margins and growth.
A lot of research has been shared and we have lots more to share with you all through the end of the year.
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Investment Pitches
TL;DR:
As someone who has shorted Peloton (PTON) in the past, Value Investing for Sophisticated Investors does a good job of at least pressure-testing the notion that PTON is worth what David Einhorn says it could be worth. Enjoyed the commentary on this one.
TL;DR:
The above is a quick update on Games Workshop (LON: GAW), a name that I’ve been meaning to investigate further. The writer breaksdown the company at a high level and why the future monetization of IP could be very fruitful for the company. Something to read if you’re looking to learn a little more about the company on your own.
TL;DR:
David Katunarić does a great job of diving deep into Credit Bureau Asia (TCU.SI), a credit bureau that operates across Asia. David believes that growth can come from multiple areas that are actually tailwinds for the company on a micro/macro level. Given his calculations on FCF growth, IRR is still looking to be in the low double-digits if what he belives to happen, happens. Worth a read for anyone looking at expanding their Asia exposure.
Notable Market Updates
FDA Marks All Doses of Semaglutide “Available”; Link
Why this matters: Tirzepatide was already removed from the shortage list in early October which meant that smaller compounders needed to stop producing the formula immediately while bigger compounders were allowed a 60-day grace period. With the addition of Semaglutide being marked “available” by the FDA, the clock is ticking for when a shortage would be removed which would mean all compounders would be in violation of compounding the drug post-removal. This has an effect on public companies like Hims and Hers Health (HIMS), Weight Watchers (WW), and others that are offering compounded versions.
Roaring Kitty Exits Chewy (CHWY) Trade; Link
Why this matters: With Roaring Kitty finally out, perhaps the meme pump for pet stocks like Chewy and Petco (WOOF) is over and we can revisit the names under fundamental reasons. I have a history with both these companies and they might warrant another look now that Kieth is out.
Buffet Sold More Apple / Cash Pile At All-Time High; Link
Why this matters: Berkshire is pausing stock buybacks and has raised its cash balance by ~$48B in one quarter to a record $325B. Speculation surrounds this cash pile to mean that Berkshire is possibly preparing for a recession or dramatic slowdown and is raising cash to protect itself from a downturn while also setting itself up to acquire (distressed) assets on the cheap.
General Research
Audio / Podcasts
Appreciate you taking the time to read Weekly Snacks, a free aggregator of various forms of content. 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
Thanks for the mention!