Summary: Data center AI-driven re-architecture is in the first inning; names NVDA, AVGO, MRVL, VRT, ETN, LEU among beneficiaries of compute, cooling, power, and chiplet trends.

structural marker; pre-classified as canonical yfinance ticker

We wrote an industry essay on the evolution of #datacenters. (link at the bottom)

We discuss:

1. How data centers are evolving due to #AI workloads and new hardware requirements

2. The trends that will be occurring due to this evolution from compute to chiplet architecture

3. The industry participants that are poised to benefit from this inflection

4. Potential headwinds that could inhibit the adoption of this new data center architecture

1/N

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There are 5,500 data centers in the USA, making up half the global number of data centers. The average data center has about 100k servers and requires significant energy to run. Each rack typically consumes 15-20 kilowatts.

With data centers becoming “AI Factories”, we believe that this is the first inning of major technological changes and delve into the data center trends below.

$NVDA

2/N

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With the tsunami of AI demand for compute and storage, the data center industry faces a pivotal challenge.

The majority of data centers are structured around CPU-based servers, which are rapidly becoming inadequate for modern requirements.  To address this, a significant overhaul is necessary to integrate GPUs.

NVIDIAs latest Blackwell data center platform reads like something out of a scifi novel compared to traditional data centers.

3/N

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GPU demand is driven by applications such such as LLMs and text-to-video generation.

These models are expanding rapidly: Chat GPT 1 contained 1.5 billion parameters, whereas Chat GPT 4 now boasts 1.7 trillion.

4/N

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Trend 1: Network debottlenecking

While compute has gone up 1000x in a decade, other parts of the chain have not kept up: Namely data connectivity.

Industry reports estimate that 30 percent of the time spent training a LLM are due to network latency with the other 70 percent spent on compute.

Cabling, switches, and DPUs are all advancing to dramatically reduce lost data packets and latencies.

$AVGO  $AWE.L $MRVL

5/N

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Trend 2: Change in Power Infrastructure

Training an LLM like Chat GPT-4 with 1.7 trillion parameters cost about $100 million and used about 60 GWhrs of energy; equivalent to the total energy usage of 70k homes for one month.

By 2027, AI power consumption could reach 200 Twhrs or 5% of US electricity needs, more than 2x the power needs of all the data centers in the US today.

Finding utilities to power these massive data centers will prove difficult and could see the rise of modular nuclear reactors.

$ALCC $LEU

6/N

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Within the data center, to cope with the energy loads from GPUs, higher power equipment will be needed anywhere from Uninterruptible Power Supplies to batteries to switch gears to generators and dry type transformers.

$ETN $HPS $POWL

7/N https://t.co/lhxuI8IIm3

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Trend 3: Cooling

With high power comes high heat.  The power usage of a single AI rack currently can be as high as 100 kilowatts and likely in a few years will exceed 200kw; Multiples of what traditional CPU racks consume.

Newer techniques such as liquid cooling and immersion cooling which cool directly at the chip level will be needed. A large benefit of liquid cooling is it also lowers the power consumption of servers by up to 20%.

Other methods are being looked at to also increase the rate of heat transfer away from chips. This can be done by using a better conductor such as synthetic diamonds.

$VRT $RELL

8/N

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Trend 4: The Rise of Chiplets

With semiconductor technology advancing to 2nm , the expenses with designing chips has exploded. Cost are almost doubling for every nm advance.

Custom silicon is cheaper and can make AI workloads such as inference more efficient. Hyperscalers are rushing to build out their own custom silicon such as $GOOG $META and $AMZN.

$AVGO has largely been a beneficiary building out GOOG's TPUs. Marvell and Alphawave are newer entrants in the space.

9/N

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TLDR:  The shift from CPUs to GPUs requires a re-architecture of data centers, spanning network infrastructure, cooling systems, and power management.

We believe this is the first inning of major technological changes in data centers.

10/N

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Link: https://t.co/wlVThWyHxw


$AVGO has largely been a beneficiary building out GOOG's TPUs


Marvell and Alphawave are newer entrants in the space


Summary: Long NRP: debt paydown progress, coal royalties shifting to met coal (70% revs), potential debt-free by EOY 2024 with $150-220mm/yr to unitholders.

$NRP earnings highlights

Management continuing to pay down costly preferreds and warrants. Redeemed $178mm of preferreds and only .32mm warrants out of the original 4mm remain ( in 2024)

If coal prices stay at current levels, NRP could be completely debt free by end of 2024 leaving royalty streams to common unitholders ( likely around $150mm- $220mm/year)

Coal prices still resilient with met coal now making up 70% of revenues. This royalty stream will be significantly more robust than thermal coal.

Soda ash prices will see pressure in 2024 from new supply coming online. NRP saw about 70mm in royalties in 2023 from their stake in Sisecam Wyoming.

disclosure: long


Summary: Long FC: SAAS growing 30%+ with 50% margins and 90%+ retention; international + on-site revenues provide tailwinds; more upside from here.

$FC had solid earnings. AAP SAAS sales growing > 30% with 50% margins and 90% plus retention rate. With international licensee and on-site revenues picking up, FC has significant tailwinds ahead.

Up over 100% since our valuation with more room to run
https://t.co/fhv7PGyLdY


Summary: Strong buy recommendation on RELY; valuation seen as attractive and author has added multiple times despite price weakness.

I highly encourage any experienced investors following us to consider $RELY for their portfolio.

We believe the valuation is currently very attractive.

We have added multiple times since this initiation report (the price has continued to move against us for what we believe are non-justifiable reasons)

https://t.co/8AXYpOmmfH


Summary: Rising M2 signals market upside; more dangerous to be bearish than bullish from here.

M2, a predictor of market returns, continues to grind higher. Despite highs, it is more dangerous to be bearish than bullish. https://t.co/glKbzK5d5p


Summary: TG looks attractive at current levels; cyclical with ~$30M normalized FCF and semi-market upside in PE film.

$TG looking interesting around these levels. Cyclical name that recently suspended dividend. In normalized environment it should be able to generate about 30mm in FCF.  PE film segment has seen secular headwinds but growth market could be in semis. No position.


Summary: Bullish DFIN: beat on revenue/margins + shift to recurring SaaS creates multiple upside paths.

@DFIN beat in revenue and margins, the continuing shift of their business to recurring SAAS also offers multiple ways to win


Summary: APLD seen as a potential beneficiary of AI/HPC theme via 400MW hyperscaler LOI; bull case is execution.

@ToffCap $apld could be- the loi with the hyperscaler is for 400MW. Now it is just execution…

What are other miners able to capitalise on this theme (ic AI HPC)?

$IREN, $WULF, …


Summary: Shares UBS upgrade of CARD.L from neutral to buy with 180p target; bullish into 9/24 earnings.

nice up day on $CARD.L / UBS upgraded from neutral to buy with a 180p target. Looking forward to earnings release on 9/24


Summary: Bullish equities (SPY): while QE and near-zero rates persist, holding cash is dangerous — stay invested.

The Fed announces that it is "thinking about thinking about raising rates (in the distant future)" and the market slides. ??. As long as the bond buying program is still in effect and rates are near zero, cash is a very dangerous asset class to be attracted to. $spy


uranium plays... Finding utilities to power these massive data centers will prove difficult and could see the rise of modular nuclear reactors. $ALCC $LEU

Summary: Bullish on uranium plays ALCC and LEU as AI power demand drives modular nuclear reactor adoption for data centers.

We wrote about some uranium plays in our data center essay. Link at bottom.

Summary:

Training an LLM like Chat GPT-4 with 1.7 trillion parameters cost about $100 million and used about 60 GWhrs of energy; equivalent to the total energy usage of 70k homes for one month.

By 2027, AI power consumption could reach 200 Twhrs or 5% of US electricity needs, more than 2x the power needs of all the data centers in the US today.

Finding utilities to power these massive data centers will prove difficult and could see the rise of modular nuclear reactors.

$ALCC $LEU

https://t.co/vrV5ewinfa

@variance_swap What’s the uranium thesis? Any good read you can link to? Thanks


Summary: Bullish on XMTR ahead of Monday research piece; title frames it as a dominant future player in digital manufacturing.

Research piece dropping Monday on $XMTR

How is this for a bullish title?....."Xometry: The Future Digital Manufacturing Leviathan"

Very deep into digital manufacturing research rn.

$PRLB $XMTR & private co Fictiv. Could be some interesting opportunities in the space.


Summary: Long NRP; still undervalued with upside from carbon sequestration.

Thanks for sharing, lots of great insights. We also hold $NRP and believe its still undervalued, especially with potential upside from sequestration. That said, solar and wind have gained market share much faster than previous energy sources, at roughly double the rate Vaclav Smil anticipated. (Natural gas is also taking share from met coal as a reducing agent)

---

@JohnHuber72 Some thoughts we wrote up about the coal industry

https://t.co/ARQ0HXJWV4


Anyone that at least doesn't have some duration in their portfolio is probably making a mistake

Summary: Author endorses adding Treasury duration; implied long on long-end rates/TLT.

@fkronawitter1 Anyone that at least doesn’t have some duration in their portfolio is probably making a mistake

Some thoughts on Treasuries and TIPS:

The 30-Year Treasury ETF ($TLT) saw record trading volume yesterday, indicating forced liquidation which often occurs near a bottom (1/5)

https://t.co/3JXOprUtKe


Summary: Long RELY on 95%+ confidence in significantly higher earnings in 12-24 months; taking share from WU and MoneyGram on scale economics.

@ClarkSquareCap Remitly $RELY. They are a digitally native X-border remittance provider that is eating Western Union $WU and Moneygram's lunch....Thesis: Growing market + taking share + good scale economics

What stocks (small, mid, large, international, anything goes) do you like where you have 95% plus confidence that earnings will be significantly higher in the next 12-24 months? And why?


eating Western Union $WU and Moneygram's lunch


Speculative position initiated on overly indebted $RRGB Red Robin. Disclosure: long, as discussed in our Stock Sonar to subs

Summary: Long RRGB speculative position; company down ~45%, guiding $65M EBITDA, sale-leasebacks reducing debt despite challenging restaurant category.

Speculative position initiated on overly indebted $RRGB Red Robin.

-We passed on this name towards the end of last year but since it’s down ~45%.

-The company is guiding for 65mm EBITDA for FY 2024, with about ~30mm of that going to capital expenditure and ~22mm going towards interest payments.

-Sale-leasebacks should continue to reduce debt this year and are in part responsible for lower EBITDA targets.

-Restaurant category is challenged as consumers shift spend to grocery stores. Not to be attributed to RRGB mngmt – they are competent and taking the right steps.

Disclosure: long, as discussed in our Stock Sonar to subs


Remitly is cheaper and easier to use with less friction…It's a market ripe for switching

Summary: Long Remitly over WU/MoneyGram: cheaper, less friction, sender controls pickup, and incumbents face switching as negative goodwill from high fees builds.

Yes this is more accurate to say and a fair point (and one we thought of before investing)…. They do have a slightly more convenient network  (I wouldn’t say much more) but Remitly is cheaper and easier to use with less friction (agent networks like WU increase fraud and frictions when using the app)…Also, and more importantly the sender has more power than the receiver (“hey I don’t care walk an extra 10 minutes to pick up the cash”)…..also with branding, you are correct that WU and MG are better known but there is also a lot of negative goodwill that has built up from migrants getting scalped by them over the years. It’s a market ripe for switching.

@pernasresearch @SleepwellCap @ClarkSquareCap I am a little dated on this name but when I looked at the actual pickup locations ~1 year ago, there was a huge difference in quality. for example, WU pick-ups were branded retail locations near places where people lived and Remitly was often claiming local bank branches in city


a lot of negative goodwill that has built up from migrants getting scalped by them over the years. It's a market ripe for switching


Summary: Endorses bullish RELY thesis: long runway for share + market growth + attractive unit economics.

$RELY Great thread from Mario on Remitly's competitive advantage. Thesis: long runway to keep growing share + growing market + attractive unit economics

If Remitly becomes the Booking/Netflix/Uber of digital remittances it will have a lot to do with its proprietary global network. It's a not so obvious competitive advantage that runs quietly under the hood maximizing the # of fast & low friction transactions. $RELY (1/x)


Summary: Long Doc Martens; Australia DTC conversion seen as a growth opportunity when distributor contract matures.

@guastywinds We are long $DOCS Doc Martens. Australia represents a conversion market opportunity. Will be DTC when distributor contract matures I am assuming.


Summary: PRG best positioned to dominate virtual LTO space post-KPLT collapse; RCII also a consolidation beneficiary.

$KPLT got annihilated. Looks like the virtual LTO space will consolidate to $RCII and $PRG. ioo we think $PRG is best poised to dominate this space. will be interesting to see the next quarters play out.

LTO industry recap: https://t.co/mPLu5m5cvy


We are long $UPWK ... 70%+ upside from current levels

Summary: Long UPWK: undervalued at <10x fwd EV/EBITDA, AI fears overblown, 70%+ upside from revenue growth and margin expansion over 12-24 months.

industry='Internet Content & Information'

We are long $UPWK

The largest online freelance marketplace that has been sold of ~85% from ATH due to misplaced AI fears.

Thesis = undervalued + latent earnings potential + secular growth market.

Business background & Thesis below

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Upwork marketplace connects millions of freelancers with 870k active buyers needing support across various verticals.

---

mobile and web development dominate the platform (~40%) creative design, marketing and customer support are popular verticals.

---

~85% of Upwork’s revenue was derived from its self-serve marketplace. This segment allows small businesses to easily create and post job listings.

---

The other 15% of Upwork’s revenue is derived from their Enterprise segment. This segment caters to larger companies (>100 employees) with complex hiring needs.

---

Upwork’s 18% take rate (Revenue/GSV) is still significantly lower than competitors like Fiverr (~30%) and Toptal (well over 20%). https://t.co/VaTjCpoc19

---

Upwork's freelancer pool is highly skilled, adaptable, and resilient, with 85% of its over $4 billion GSV coming from longer, more complex engagements rather than small gigs.

---

Fears of AI disrupting Upwork’s business are significantly overblown. This contrasts with a platform like Fiverr, which is more vulnerable due to its focus on simpler, low-cost “gig” work.

---

We expect Upwork’s GSV volumes to consolidate in the next 12-24 months before resuming mid-single-digit growth.

---

Upwk is an incredible marketplace business trading at less than 10x fwd EV/EBITDA. Revenue growth and margin expansion opps give us confidence to estimate 70%+ upside from current levels.


We are long $NRP … we believe NRP is undervalued by at least 30%

Summary: Long NRP; undervalued by 30%+ with royalty downside protection, soda ash stake, and carbon capture upside; distribution inflection ahead as preferreds pay down.

$nrp continuing to perform. common unit holders should see an inflection in distributions as preferreds get paid down. good example of the benefits of having a longer investing time horizon.

We are long $NRP, an MLP that owns mineral rights to ~13mm acres in US. The low-cost business of collecting royalties with a protected downside, a stake in a low-cost producer of soda ash, and potential upside in carbon capture, we believe NRP is undervalued by at least 30%.

1/n


Summary: Bullish RELY post-earnings; LTV/CAC bear case resolved, long runway of growth and scale economics ahead.

$RELY up 18% on earnings.

Management has added clarity to LTV/CAC economics that was the major argument for the bears. We sound like a broken record but will keep saying it -- we expect a long runway of continued growth and attractive scale economics.

$RELY Remitly Q4 Earnings will report on 2/21 and will be a battleground earnings report.

sentiment exceedingly negative - their increased marketing spend is viewed by the street as defensive.

We believe increased marketing spend is a positive given attractive LTV/CAC


Summary: Bullish Bayer at current levels; pipeline of 32 drugs (~$10B cost) unrecognized by market, making it attractively valued.

@ToffCap Likely it does go below that but at some point it will be attractive enough. Think at the current valuation, the market is ascribing little value to the 32 pharma drugs in the pipeline which cost BAYN roughly ten billion dollars.

We could easily see Bayer $BAYN below EUR 20 imo in the near-term.

- no breakup in the next 2-3 years
- even if break-up, markets are horrible
- what is even a real number for the litigation?
- not tangible catalysts for 2024. who's going to buy?
- just a 💩show

But, doesn't https://t.co/x52BwfEfkD


Summary: Long PAYS with ~100% upside on plasma-center payment processing share gains + inflationary tailwinds.

Newest position: Paysign

We see about one hundred percent upside from today's levels.

https://t.co/ZxB3WfxqmG

$PAYS

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Rapidly taking share from its competitor (formerly Wirecard), it's dominating the niche payment processing for plasma centers. Coupled with inflationary tailwinds and stimulus checks tapering off, PAYS has significant upside.


Fragile balance sheet + lack of sound capital allocation + deteriorating market is a bad combination. Lack of sound capital allocation plus a more fragile balance sheet leaves us unable to invest.

Summary: Bearish SNBR: excessive debt, poor capital allocation (buybacks at 5x current price), and deteriorating market make it uninvestable.

$SNBR is a vertically integrated mattress and has been aggressively pursuing growth with high advertising budgets, spending almost as much as TempurSealy, a company with 2.5x the revenues of SNBR. SNBR is a solid brand however its ~$470mm revolver debt level gives us pause.

1/n

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The last three years, it repurchased $700mm of stock at avg share price of $100; the share price today is 1/5 of that. Repurchases have tapered off while share prices have plummeted. Lack of sound capital allocation plus a more fragile balance sheet leaves us unable to invest.

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$SNBR  down 40% AH. Fragile balance sheet + lack of sound capital allocation + deteriorating market is a bad combination.


Summary: Bullish RELY into Q4 earnings 2/21; author argues increased marketing spend is positive given LTV/CAC, expects sentiment reversal.

$RELY Remitly Q4 Earnings will report on 2/21 and will be a battleground earnings report.

sentiment exceedingly negative - their increased marketing spend is viewed by the street as defensive.

We believe increased marketing spend is a positive given attractive LTV/CAC economics and this coming earnings could mark a meaningful shift in sentiment.


We are Passing on Dollar General … overweighting their amazing operating history and not looking forward … Both avenues are under pressure … Higher prices and higher for longer rates will put LT pressure on low income customer base

Summary: Bearish DG: store-count growth saturated, SSS under pressure, low-income customer squeeze from rates/prices, and grocer pivot hurts FCF.

$DG We are Passing on Dollar General

We believe most investors in $DG are overweighting their amazing operating history and not looking forward:

Their growth has come from added store count and SSS increases. Both avenues are under pressure

Higher prices and higher for longer rates will put LT pressure on low income customer base

Store growth in U.S. has saturated (~19,000 more than any other retailer)

Increased fixturization investments to become more of a grocer invites competition and decreases from fcff

Upside risks:
International expansion


Summary: Bullish SES Imagotag on Walmart nationwide partnership and ~40% YoY growth in retail digitization.

@MadThunderdome @sesimagotag is crushing it with digitization of retailers. Just signed nationwide partnership with walmart. Growing about 40% yoy

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@MadThunderdome @sesimagotag Write up https://t.co/aCF8UzWJxX


Summary: New long position in AOUT with at least 60% upside target after earnings beat.

$AOUT crushes revenues and earnings estimates

Our newest position: https://t.co/dtbFPLAlRD

We believe there is at least a 60% upside from here.

#Americanoutdoorbands


Summary: DFIN has more room to run after premature analyst downgrade to hold; pullback post-earnings was overdone.

$DFIN continues to grind higher this week after the stock was down following a spectacular earnings report. The lead analyst on the stock took it from a "buy" to a "hold" b/c the price had ran up a lot. Rank premature profit taking and the stock has more room to run as a result.


Summary: Bullish on GIL: CEO departure seen as a positive catalyst given his perceived missteps; author had a non-buy rating prior.

@CDInewsletter We wrote our research report on Gildan in April. We were one of the few non-buy ratings on the name. I think this could end up being good for the stock as the CEO has made a series of missteps and we view him as more a promoter than anything.

Gildan’s CEO leaves abruptly over the weekend, stock down 9% in early trading.

This probably isn’t good.

$GIL

https://t.co/60oE2CVbs3


Summary: Bullish NRP: aligned management, ~20% yield, and upside optionality on 13mm acres of mineral/carbon assets.

$NRP earnings today. Even with significant pricing pressure on soda ash and metallurgical coal, it still threw off about $60mm in FCF.

With NRP an investor gets a well aligned management team whose primary objective is to maximize the royalties for common unit holder,  ~20% yield, and a call option on mineral deposits/carbon sequestration across roughly 13mm acres.


Summary: Near-miss on a FOSL spec long — bullish on cost cuts and proprietary brands, held back by licensed-brand revenue freefall and looming license expirations.

Fossil Group $FOSL $FOSLL, very close to initiating a spec position but no cigar.

Pros

Current liquidity looks good ($100mm+) and debt of 200mm maturing ~’26

Deep cost cutting showing signs of working. 300bps of GM improvement + 20% yoy opex reduction. EBIT loss improvement 19mm->6mm.

Money losing smart watch segment finally discontinued.

After a 24 year reign, founder/CEO (“charismatic but distracted leader”) ousted.

~50% of revenue—proprietary brands and jewelry—is showing signs of revenue stability.

Cons

The other half of the business—licensed fashion brands like Armani and Kors— appears to be in free fall.

Significant amount of licensed deals have came due or will come due in the next 12 months. No renewals announced. (In an alternate universe if these licenses all expired several years from now, we would have initiated a position)


Summary: Long RELY with significant upside ahead; growing market, share gains, and scale economics.

$RELY has significant upside from these levels

The position is up ~40% since we initiated our starter position on 7/26.

Thesis: Growing market + taking share + good scale economics

Our long-form thoughts below:

https://t.co/lS3IcCkLBc


Summary: Bullish on WULF and APLD among bitcoin miners; APLD's 400MW hyperscaler LOI seen as a potential large windfall.

We wrote about $WULF to subscribers yesterday. There are likely some gold nuggets among the detritus of bitcoin miners due to long term access to low cost power. However all data center locations are not equal. The type of power source and the proximity to data sources are important factors when assessing the viability.

$CORZ demonstrated that Bitcoin miners possess assets of significant worth. Beyond $WULF, another compelling player to watch is $APLD. They've secured a Letter of Intent with a major hyperscaler for a massive 400MW capacity, which is approximately twice the size of the recent $CORZ deal with CoreWeave. Although $APLD does have some hair on it, this agreement could be a large windfall for them.


another compelling player to watch is $APLD. They've secured a Letter of Intent with a major hyperscaler for a massive 400MW capacity... this agreement could be a large windfall for them.


Summary: Expects further re-rating higher in ARQ if it locks in offtake agreements proving GAC commercial viability.

industry='Pollution & Treatment Controls'

ADES (now $ARQ) up almost 50% on earnings today as pruning of unprofitable contract continue(with more headway made this quarter) Although capex costs are running above initial estimates, GAC facility will be completed on time with about ~ 3yr payback period.  If ARQ can lock in offtake agreements, showcasing commercial viability,  we expect to see further rerating.

@ragnarisapirate @danban__ $ADES is turning the bend to profitability with legacy business while trying to capture long term agreements for GAC. There is  risk to the commercial viability of their technology that they obtained via ARQ acquisition.


Summary: Prices expected to grind higher over coming weeks; cash is dangerous, implying broad market upside.

Trump signs bill. Expect prices to grind higher over the next few weeks. Cash is a dangerous asset right now.


We have added to our position. Currently, we don't find evidence that challenges our thesis.

Summary: Added to RELY position at 52-week lows after AH drop; thesis intact on strong customer/revenue growth and EBITDA ramp.

Remitly $RELY was down as much as 23% AH following Q1 earnings. This marks 52-week lows.

We have added to our position.

Critics highlight high SBC but this is typical for early-to-mid stage tech cos.

Q1 2024 highlights (yoy):
active customers are up 36% to 6.2M, send volume rose 34% to $11.5B, and revenue up 32% to $269.1M. EBITDA grew to $19.3M from $5.4M last year...(capital light and low debt will see growing EBITDA convert nicely to cash flow).

CEO remarks from the earnings call: "From just over $5M in adjusted EBITDA a year ago to $19M this quarter, guiding to $85M to $95M for the year—this ramp shows how the business is gaining leverage."

Currently, we don't find evidence that challenges our thesis.


Summary: Long META on Reels engagement, ad impression growth, political ad tailwinds, and family-of-apps expansion.

thoughts on $meta earnings

Headcount will increase from base of 67k employees, up 2% from previous quarter.

Online commerce was largest revenue driver followed by gaming. The political ad market will be a tailwind in 2024.

Ad impressions up 21% yoy and ad prices up 2%- showcasing the increased engagement from Reels.

Reality labs crossed the 1B revenue mark for the first time although expenses increased in proportion.

Revenue from China advertisers was 10% of revenues.

$meta continues to drive engagement to their family of apps while serving better ads. Headwinds include regulation and Reality Labs (especially with aapl entering the ring).

Long $meta

notes on $meta earnings

meta should see significant tailwinds from reels, click to messaging, and ai driven content increasing engagement. headwinds include choppy ad environment and reality lab expenses.

q3 ad revenue growth driven by online commerce(chinese companies), CPG,


Summary: Bullish META on accelerating AI compute scale (Llama training GPUs 2K→100K) and AI-driven engagement/ad gains.

# of gpus used to train $META Llama Models

llama1: 2k gpus
llama2: 4k gpus
llama3: 16k gpus
llama 4: 100k gpus (2025 release)

AI driven feed has increased time spent on apps by more than 6% and more than 1mm advertisers are using Gen AI tools to create ads.

Incredible stuff and it is only accelerating.


Summary: Falling rate pressure is bullish for equities broadly.

Rate pressure continues which only bode well for stocks in this environment https://t.co/NIZuGEHiAo


Summary: WOOF has durable competitive advantages and retail presence; potential compounder on bundled services and tiered memberships.

With durable competitive advantages and a substantial retail presence, $WOOF could be a compounder. Gone are the days of selling non differentiated durable items. More work needs to be done understanding the unit economics of their bundled add-on services and tiered memberships.


Summary: RELY is best idea: growing remittance market, gaining share, attractive scale economics.

@jay_21_ @stockthoughts81 $RELY digital remittance provider. growing market, growing share, attractive scale economics.

What is your current best idea (with a 1-2 sentence pitch)?


Summary: Long RELY: fundamentals will keep improving, economies of scale will emerge, price will re-rate regardless of near-term catalyst concerns.

A reader asked me a Remitly $RELY question:

Q: The market clearly disapproved of the "wide funnel" direction expressed in yesterday's conference call, as RELY indicates it will be working on growing revenue without a primary focus on expense control to bring about positive earnings (which was the direction RELY indicated it was heading at the Q4 2022 earnings call). If they hold to this recent direction expressed in yesterday's call, what is the catalyst for upward price movement?

A: I never care about a catalyst. Every brain cell spent trying to think about the potential triggers to a re-rating here is a brain cell wasted. All I care about is this: Will the fundamentals continue to improve? And the answer is a resounding yes. They will keep penetrating and the economies of scale will become apparent. Then at some point, like magic, the price will re-rate

Long $RELY


Summary: AOUT trading near net-net valuation; implied deep-value long.

American Outdoors is almost a net-net at this point

$AOUT


Summary: Bullish lean on AGX: half market cap in cash, potential demand inflection from coal-to-gas conversions; warrants closer look.

$AGX is a power generation company with a market cap of $512mm, roughly half its market cap in cash. The majority of revenues come from converting coal power plants into natural gas ones. Coal makes up about 20% of US energy generation and is forecasted to go to 5% by 2030

1/n

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Natural gas fired generation makes about 35% of the energy needs of the USA, but it is set to decline about 1% per year as energy from renewable becomes more widespread. AGX could see an inflection in demand from the retiring of coal plants over the next decade.

2/n

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Being that a large part of its value is in cash, capital allocation is paramount. Worth a closer examination.

3/n


Summary: Long DFIN with price target implying market cap well over $1B.

$DFIN finally takes a breather after going on a 30% tear since earnings. Our price target is still well over a billion in market cap.


Summary: Endorses TSSI dip as a buy; trim was sizing-driven, no negative fundamentals.

@Mike10947310 This presumption is correct 👍 no other concerns

$TSSI

Seems this dip is from Pernas mentioning trimming their position based, I assume, on sizing concerns (as they didn’t mention any negative developments).

Don’t worry, the company didn’t suddenly get 20% worse :) Good dip buy imo.


Summary: Skeptical on TPR: Kors brand decline risks making the CPRI acquisition a material drag on performance unless turned around.

Unless $TPR can turnaround the declining Kors brand, this $CPRI acquisition is going to be a significant drag on performance. $TPR did have success with making the Coach brand relevant again so it's possible.


Summary: Bought far OTM puts on GME expiring in two weeks; bearish via options.

We bought some way OTM puts on GME yesterday that expire in two weeks. Most expensive options ever but still worth it. So weird to have an option play that is way out of the money, expires in two weeks but also feel like it’s massively positive theta.


Summary: Bullish RRGB: as QSR prices rise to FSR levels, spend shifts to full-service restaurants.

Contrarian view: full service restaurants (FSRs) like $RRGB benefit as spend at QSRs is now comparable

Walked into a McDonalds for the first time in many years and Big Macs cost $8? https://t.co/nnyGC9KZ1G


Summary: Valuation analysis concludes DFIN share price justified above $15 on IPO market position and stable compliance share.

Check out our @DFINSolutions valuation at https://t.co/MmXaaP1oHf. DFIN has an immovable position in the IPO space and has stabilized market share in the compliance segment. Taking those into account justifies a share price > $15


Summary: Long REX: no-debt ethanol producer with $250M cash, poised to benefit from IRA 45Q/45Z credits and carbon capture economics.

Our latest holding is $REX. We believe it has significant upside from these levels.

REX is an ethanol producer with about 3% market share in the USA. REX is run by sound operators, having never lost money in the last decade despite volatile commodity cycles.

REX stands out due to no debt, 250mm in cash, and disciplined capital allocation: lean HQ, strategic capacity expansion, timely share repurchases, and carbon sequestration efforts.

REX stands to gain from the Inflation Reduction Act (45Q and 45Z credits) , being among the few ethanol producers that can take advantage of these subsidies due to its capital structure, being in the later innings of permitting, and ownership of carbon capture economics. This positions them for a significant boost in future earnings.

https://t.co/HQVX3kZNNW


US Ten Yields rising much from here in a sustained way is not a concern for us. $SPY

Summary: Dismisses sustained yield-rise risk and delayed Fed hike as bullish backdrop for equities.

This differential is why the US Ten Year Yield has downward pressure. US Ten Yields rising much from here in a sustained way is not a concern for us. Also next fed rate hike end of 2022 at the earliest. $SPY https://t.co/4ZQX5u7ICk


Summary: Bearish Berkshire; believes it is at risk of underperforming.

We are posting a small write-up tomorrow on why we believe Berkshire is at risk of underperforming. $BRK

Hope bulls can chime in to tell us what we might be missing.


Summary: IPO activity at highest since '99 should benefit DFIN.

#IPOs in September hit highest levels since '99! Should bode well for @DFINSolutions


Summary: Highest-conviction long on DFIN into earnings tomorrow.

@DFIN catching a bid today! Earnings coming out tomorrow before market open. Currently one of our highest conviction ideas.

Check out our valuation at https://t.co/5cWgejpiuI.


We expect Card's market position to strengthen

Summary: Bullish CARD.L: minimum wage policies benefit scaled players like Card Factory, reinforcing market position vs smaller rivals.

$CARD.L up 8% on heavily positive trading update. Unfortunately (or fortunately for CARD shareholders) onerous minimum wage policies help scaled players like Card Factory at the expense of smaller competition along with disincentivizing potential entrants. We expect Card’s market position to strengthen.


For those that can't seem to find a bear case this should help

Summary: Shares bear case for INMD: fading Morpheus8 momentum, weak product breadth, poor retention, and customer service issues.

Researching $INMD currently….

Snippet of my talk with a cosmetic professional below. For those that can’t seem to find a bear case this should help:

“They are a multi modality company and going through a hard time right now because they gained a lot of
Momentum with the Morpheus 8 but the rest of their technologies aren’t as popular.

They have treatments prompted by Kim kardashian which is how they got popular in the first place.

Internally they can’t keep team members, their customer service is sub par and their sales reps are different every quarter. “


Summary: Long DFIN: standard IPO revival benefits revenue more than SPACs; reduced uncertainty drives companies to traditional route.

@rsosa8 Their rev is lower on SPACs vs standard IPOs that are more involved and take longer. Also, expect SPAC issuance to die down because of reduced uncertainty around capital market financing. A plus for DFIN given more companies will go standard IPO route. We are long!

SPACs, SPACs and more SPACs. We've already seen more SPAC issuance on a dollar basis than we've seen over the last few years combined. September will be a huge month for IPO's and I'm participating via $DFIN.

How about you?


Summary: Bearish GPRO: declining unit sales, subpar software, heavy hardware discounting, opaque churn disclosure all make it unattractive at current levels.

$gpro still not attractive at these levels. unit sales have been declining and software offerings are still subpar compared to competitors.  gpro promotes video editing software by heavily discounting their hardware.  Their lack of disclosure around churn rates is not helping.


Summary: Bullish FOSL on huge potential upside; also finds MOV interesting.

@BigBoyBern80872 Because we thought the potential upside for FOSL could be huge. But $mov does look interesting

@pernasresearch Why not just look at $mov.


Summary: Bullish US assets: Treasuries not broken, US still the best macro destination; long TLT and SPY.

The U.S. is still the nicest house in the neighborhood and Treasury markets are not broken. $TLT $SPY


Our newest core holding is Zumiez $ZUMZ … potential upside of 70% from today's levels

Summary: New core long ZUMZ: 70% upside over 12-24 months as earnings fundamentals improve from post-2021 selloff.

Our newest core holding is Zumiez $ZUMZ
1/n

https://t.co/PXwTbohr1W

---

$ZUMZ is a lifestyle retailer that has sold off 70% from 2021 highs due to recessionary fears. Despite facing several challenges, Zumiez has a proven track record of surviving and thriving through business cycles.

2/n

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$ZUMZ has survived due to selling exclusive apparel, managing inventory effectively, and negotiating intelligent leases.

3/n

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$ZUMZ earnings fundamentals are expected to improve significantly in the next 12-24 months, with a potential upside of 70% from today's levels.

4/4


Summary: Despite QE taper concerns starting Nov FOMC, author implies S&P 500 will rise as it did 20%+ during the last taper cycle.

The November FOMC meeting will most likely mark the beginning of the QE taper. A period of concern for markets however keep in mind the last period of tapering was from the summer of 2013 to the end of QE in the fall 2014--the S&P 500 went up over 20%.

$SPY


We were unable to assign a buy rating for three key reasons... high capital demands and strategic risks make it challenging to justify a position without clearer scaling success

Summary: No buy rating on AKAM: CDN stabilization uncertain, compute ROI unclear, acquisition cadence opaque — high capex and strategic risk make position hard to justify.

$AKAM down on Q3 earnings

Akamai is at the nexus of several interesting trends: edge computing, cybersecurity, cloud services, IoT/5G, and AI

We were unable to assign a buy rating for three key reasons:

-Uncertainty on whether CDN business has stabilized
-Uncertainty on whether their large foray into compute will be value enhancing
-Uncertainty on cadence of future acquisitions to support security business

Company Background + Thesis + Full write-up below 1/n

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Thesis: Akamai's transformation from a CDN provider to an edge computing and security firm is intriguing, yet its heavy reliance on capital expenditures and acquisitions adds uncertainty to its growth strategy.

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Founded in 1998, Akamai pioneered content delivery solutions, evolving into a CDN leader by positioning servers closer to end users to reduce latency.

---

Cloudflare’s entry in 2010, offering bundled security and CDN at lower costs, pressured Akamai to expand its security offerings through acquisitions.

---

Recent years saw hyperscalers like AWS enter the CDN market, bundling services and challenging Akamai’s market share.

---

Competitive Advantage 1: Akamai maintains the largest global edge network, enabling low-latency content delivery, especially in underserved regions.

---

Competitive Advantage 2: Known for custom, performance-driven solutions, Akamai serves major clients in media, finance, and e-commerce.

---

Growth Opportunity: Upselling edge compute and advanced security features to existing clients, and expanding in cybersecurity, are key revenue paths.

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Edge Computing Potential: Akamai’s distributed network could leverage the demand from IoT and AI for edge computing but requires substantial infrastructure investments.

---

Challenges: CDN growth is hindered by pricing pressures from hyperscalers, while compute expansion brings high costs and uncertain ROI.

---

Conclusion: While Akamai could lead in edge computing, high capital demands and strategic risks make it challenging to justify a position without clearer scaling success.

---

https://t.co/DpNFOGWbLD


Summary: Long RRGB on attractive risk/reward; management executing and early comps turning positive despite category headwinds.

@capitalemployed $RRGB Red Robin. Not without its risks but risk/reward skew is very attractive. Challenged category but management is taking the right steps and there is small evidence they are starting to comp positive.

Our usual quarterly post.

What's your favorite small/microcap (sub $500m) idea right now?


we re-entered the position at open. shareholder recovery should be around 600mm, indicating more than 500% upside

Summary: Re-entered long YELLQ; calculates 600mm shareholder recovery vs current price, implying 500%+ upside from auction results beating stalking horse by 400mm.

HUGE news for Yellow Corporation shareholders. Auction results came in 400mm above stalking horse bid.  By our calculations, shareholder recovery should be around 600mm, indicating more than 500% upside. $yellq

(either we totally missed something or the pop on open will be gargantuan)

---

we re-entered the position at open. For those interested, there is a good piece on SA from Wyco Researcher: https://t.co/eOjfwmOA1o


Summary: Despite short-term headwinds from TENEX cancellation, net long LEU as disruption accelerates domestic enrichment build-out.

@quakes99 Interesting times for $LEU. TENEX supplies over half of Centrus' orders through 2025, but Orano and other suppliers could make up the shortfall. While short-term impacts are negative, it accelerates domestic uranium enrichment, benefiting LEU significantly.

Game on!🏒🥅 US #Nuclear fuel importer Centrus Energy $LEU has now been notified by #Russia's enrichment services provider TENEX that its license to export low-enriched #Uranium from Russia to the #USA has been cancelled🧾✂ effective through Dec. 31, 2025.🇷🇺⚛🚢⛔🇺🇸😱🤠🐂 https://t.co/mFUHVwcPQJ


Summary: Long HSW.L: despite -70% revenues, solvency >1yr + recovering European hostel traffic make it a COVID recovery play.

Hostelworld's earnings tomorrow could be surprising, web traffic has increased roughly 100% since May, with the majority of hits coming from UK and Germany.

Disclosure: Long HSW.L

---

Update:

@hostelworld revenues down ~70%—but with predicted solvency >1 year, an eager-to-travel customer base, and hostel traffic picking up in Europe where #COVID19 not blocking tourism, we think Hostelworld is a great #COVID19 pick.


Summary: Bullish RELY on market share gains, growing market, and attractive scale economics.

@KoyfinCharts $RELY taking share + growing market + attractive scale economics

Which $500m to $25b companies are you finding interesting at the moment?

👇


Summary: Long RELL: semi fab market recovery, expanding GES backlog/TAM, laser/RF capacity ramp, profitability maintained despite revenue decline.

notes on $RELL earnings

CY 2025 semi fab market will be larger than 2022 market. This will provide a significant boost to earnings.

Increased market share in GES side, increasing backlog to 12k units. In beta testing with Suzlon- potential TAM of 42k modules or about $25mm.

Sales increased in laser and RF business. Currently bottlenecked by manufacturing capacity which they are increasing and expect to be done withing 6 months.

New markets for their GES include train starters, refrigerated trucks- TAM in the hundreds of millions

Despite a 25% drop in revenue, RELL still maintained profitability and its growth prospects have grown.

Disclosure: We are Long


Summary: Long AOUT: brand equity rising, firearm accessories benefit from blue wave, compelling valuation despite outdoor accessories risk.

@mascarosergi Thanks Sergi. AOUT's brand equity is on the rise and firearm accessories will continue to benefit from the blue wave. Despite outdoor accessories at risk of decline, we think the valuation is compelling. Good luck to you as well!

@allcapbros I was researching Aout when trading at $20 but finally I did not like them. Too much post-covid risk/unknowns imho...
In the short term for sure but longer term... Good luck to you!


Summary: Discloses active long position in RELL.

@LogicalThesis we're long. we wrote about it here:

https://t.co/Hh5nXwqNzo

Idk this stock well but $RELL just had an insider purchase and the chart on daily, weekly, and monthly time frames all look good. Worth diving into. Anyone long? https://t.co/26yaygXJxr


Summary: Still holding REX long; reaffirms position after 35% earnings-driven move, citing operating leadership in ethanol.

$REX up 35% on earnings. Demonstrating their operating leadership in the ethanol industry. we remain long.

Our latest holding is $REX. We believe it has significant upside from these levels.

REX is an ethanol producer with about 3% market share in the USA. REX is run by sound operators, having never lost money in the last decade despite volatile commodity cycles.

REX stands out due


Summary: Bullish FB on ATH DAUs, Reels growth, AI-driven feed, and Shops closing the data loop.

FB earnings:

DAU at all time high 1.96B

Reels make up 20% of the time people spend on time on IG

FB to increase content served by AI versus relying on following.

Medium-term to drive more business onto Shops, closing the data loop.

$FB


The core of my conviction is from an understanding of the scale economics of their business. They will continue to spread fixed costs over a larger customer base.

Summary: Long RELY: scale economics will eventually drive profitability as fixed costs spread over growing customer base; defends growth-mode lack of margin guidance.

More concerned Remitly $RELY questions:

Q: May be I'm not being very clear, revenues are up hugely, and I mean big year-over-year, and the stock plummeted. Investors want profits and nothing IN THE CALL suggests profits are coming. Note, I am specifically referring to the direction management gave IN THE CALL. I agree this is a very strong company, growing revenues very well, but investors want management to provide visibility toward growing positive earnings. You must have a very keen eye, because no one else saw it today.

A: The core of my conviction is from an understanding of the scale economics of their business. Management has mentioned multiple times how their business scales. They used to have a high cash burn and now are roughly breakeven. Is this not some evidence of scale? Yes, they stay away from hard forecasts about profitability because it isn't their primary focus yet (and it shouldn't be). This is common for companies in growth mode. Their lack of margins comes from growth expenses/capex and the fact that they are not done scaling/growing - they will continue to spread fixed costs over a larger customer base. Does this make sense?


Summary: Ad spend consolidating to META, GOOG, AMZN on IDFA migration; Reels flywheel + AI-driven engagement adding to META bull case.

$META revenue up 4% from q1 2022 while $GOOG ad revenues were up 3%. Ad revenues will likely consolidate further to GOOG, META, and AMZN as IDFA expedites advertisers to migrate to those platforms. About 13% of digital ad spend is not on these platforms

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on costs

costs higher than expected growing 25% . However guidance suggests a more cost conscientious tone going forward.

"slowing the pace of these investments and pushing expenses off to a longer timeline"

"getting more done with fewer resources"

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on reels-

Reels does not yet monetize at same rate as stories however has reached a 1B dollar revenue run rate much faster.

More than half of shared content in messages is reels  Mark sees reels as a flywheel that gets communication started more and results in more content

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Reels made up 20% of time people spend on ig last quarter and now it is at 30%.

AI tweaks led to 15% more time on reels. Pretty incredible. About 15% of content is ai recommended and this is expected to double by next year.


Summary: Took a small long position in CATO amid broad US specialty retail sector vulnerabilities.

We took a small position in $CATO. The U.S. specialty retail sector is displaying pronounced vulnerabilities. While some entities with strong customer loyalty provide clearer trajectories, the future of many remains uncertain, hence our recent focus here.

1/n


Summary: Holding ZUMZ despite Q3 guidance-driven selloff; beat on rev and EPS but macro remains challenging.

$ZUMZ reported FQ2 earnings (Rev $194 vs $190est and EPS -$.44 vs -$.67est). Beat on both top and bottom but macro environment remains challenging in the short term. Primarily due to a heavy promotional environment. Q3 guidance sees shares sell off ~12%. We are holding.


we are long $NRP... we believe NRP is undervalued by at least 30%

Summary: Long NRP; sum-of-parts valuation ($1.3B minus $400M debt/prefs) implies ~30% upside from coal royalties, soda ash stake, and carbon capture optionality.

We are long $NRP, an MLP that owns mineral rights to ~13mm acres in US. The low-cost business of collecting royalties with a protected downside, a stake in a low-cost producer of soda ash, and potential upside in carbon capture, we believe NRP is undervalued by at least 30%.

1/n

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NRP collects a royalty on coal revenues generated. Even when coal prices are low, NRP's agreements have minimum payment obligations. This results in NRP’s FCF being stable even when coal prices fluctuate.

2/n https://t.co/BwCsNYf1Su

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Around 80% of NRP’s coal royalties come from metallurgical coal lessees, which is a more resilient revenue stream than thermal coal. Historically, NRP's revenue was derived from thermal coal lessees.

3/n https://t.co/o7FrIKN6Uc

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$NRP also has a 49% equity stake in Sisecam Wyoming, a low cost producer of soda ash. Demand for soda ash has grown consistently at an annual rate of 3-4% for the last 20 years. Distributions from alone amounted to about $60 mm in 2022, about 10% of NRP's market cap.

4/n

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With discounted coal royalties adding up to $750mm, NRP’s soda ash holding at $500mm, and sequestrations being worth $60mm, we arrive at a $1.3B valuation. Subtracting out net debt, preferreds, and warrants of about $400mm leaves a valuation of about $900mm or a 30% upside

5/n

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Link to full write up:

https://t.co/5WZcJ8JOqR

6/6


this warped thinking has something to do with PayPal's $PYPL woes

Summary: Bearish PYPL: misplaced priorities under former CEO Schulman hurt shareholder value and left firm uncompetitive.

Perhaps this warped thinking has something to do with PayPal’s $PYPL woes:

Former CEO Schulman: “everything I do puts employees first.”…. Paypal tries to honestly serve community, suppliers, shareholders, environment and the nation (note the order)… “if I put employees first, then everything follows from there”

No, it doesn’t. What you put first is shareholders and you do your damn best to maximize the intrinsic value of your firm for their benefit. This is, in fact, what is most ethical and ultimately best for employees. This way you don’t get outcompeted and end up with lethargic employees waiting to be put out to pasture.

Say no to ruinous empathy


We do not believe bulls are taking Berkshire's vulnerabilities seriously... The prudent course of action is for Berkshire to officially de-emphasize its equity portfolio as a core driver of BRKB's total return... The prospect of entrusting a $380 billion concentrated equity portfolio to a two-person team and hoping for a favorable outcome presents a significant and unaddressed risk.

Summary: Bearish BRK: succession risk, Apple concentration, unknown successors, and loss of crisis-liquidity role are unaddressed vulnerabilities bulls are ignoring.

This is NOT a Berkshire Hathaway hit piece, but some might thinks so. $BRK

We do not believe bulls (@ChrisBloomstran) are taking Berkshire’s vulnerabilities seriously.

Our thesis & prescription:
🧵👇

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We understand that BRK’s investment portfolio is less than 50% of its overall asset base (mtm) but it has been an outsized driver of BRK’s total return.

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Buffett's strategic investment in Apple, has yielded ~$140 billion in unrealized gains since 2018. This accounts for roughly half of the Berkshire stock performance since his Apple purchase.

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Warren Buffett's investment portfolio successors, Todd Combs and Ted Weschler, manage roughly $17 billion each (as of his 2021 letter) but have yet to make any significant investments.

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A $380 billion investment portfolio makes BRK one of the largest active equity managers in the world.

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Managing a $380 billion portfolio with high concentration and large embedded gains is a daunting task, and so far it has been totally unclear how this transition will be executed.

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An accounting change in 2018 brought all unrealized gains and losses in the portfolio directly into Berkshire's GAAP earnings, subjecting it to heightened scrutiny

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If a core holding like Apple, which represents ~50%of the investment portfolio encounters difficulties and Buffett is not around, it's unclear who will have the authority to make crucial decisions.

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We do not believe the same patience with portfolio fluctuations that has been extended to the greatest investor of all time will be extended to his relatively unknown successors.

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Additionally, Berkshire should no longer be relied upon as the steadfast provider of liquidity it once was during times of crises. (who will have the ability/courage to write 40B worth of derivative contracts like Buffett did in the GFC?).

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Prescription: The prudent course of action is for Berkshire to officially de-emphasize its equity portfolio as a core driver of BRKB’s total return.

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$BRK should diversify and sell down its concentrated positions and pay the capital gains tax owed. Then return a portion of the proceeds to shareholders through buybacks and dividends.

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We think Berkshire should go even further and strive to continue to diversify its holdings and even consider direct indexing strategies.

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De-emphasizing the portfolio will also help Berkshire focus on what it needs to most: fixing, right sizing and enhancing its wholly owned subsidiaries. This will mark its full maturation from an investment manager to a pure conglomerate.

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The prospect of entrusting a $380 billion concentrated equity portfolio to a two-person team and hoping for a favorable outcome presents a significant and unaddressed risk. The need to address this has become even more pressing since the passing of Charlie Munger.

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Here is a link to the short write-up: https://t.co/MIjTkKtkD7


Summary: Long RELY: attractive valuation, all Q4 growth KPIs >30%, EBITDA scaling, best-in-class management.

Remitly $RELY continues to execute.

Q4 2024 results were impressive with all growth KPIs > 30%. (Rev, customers, volume)

Company continues to scale with adj EBITDA at $44mm vs $8mm yoy

Street communication around KPIs, scale and SBC much improved.

Probably the most focused management team we have come across.

I highly encourage any experienced investors following us to consider $RELY for their portfolio.

We believe the valuation is currently very attractive.

We have added multiple times since this initiation report (the price has continued to move against us for what we believe are


Summary: Continuing to hold TLT for risk-reduction and carry; easy money made but position maintained.

From our Quarterly Letter published 10/14. The easy money has probably been made but we are happy to continue holding for risk reduction benefits and decent carry. $TLT https://t.co/BpfkHqQscP

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Q3 Letter here: https://t.co/hvm7y5XtGo


$TLT risk/reward skew starting to look juicy. I'm feeling comfortable swapping out of some money market funds for duration here…

Summary: Moving out of money market funds into TLT; risk/reward looks attractive for long duration.

$TLT risk/reward skew starting to look juicy.

I’m feeling comfortable swapping out of some money market funds for duration here…


Summary: Bullish BUR: Petersen summary judgement expected to drive multiple expansion and halo effect on open cases, dispelling short thesis.

wonder how much multiple expansion  $BUR will see as summary judgement in Petersen case helps dispel short reports. If damages awarded are sizeable, BURs open cases should see a halo effect.


we are long. Revenue and earnings surprise to upside, we expect more of this to continue and GSV improvement could be another upside catalyst

Summary: Long UPWK; Q3 beat on rev/FCF, buyback announced, expects continued upside surprises and GSV improvement as catalyst.

Q3 Earnings $UPWK

Disc. we are long

Up 11% AH which might be surprising given most of the information was prelim released two weeks ago.... Market liked the 100mm buyback announcement + favorable guidance.

Revenue and earnings surprise to upside, we expect more of this to continue and GSV improvement could be another upside catalyst... Rev 10% yoy, FCF $98mm vs $33mm, active clients grew 2%.

We are long $UPWK

The largest online freelance marketplace that has been sold of ~85% from ATH due to misplaced AI fears.

Thesis = undervalued + latent earnings potential + secular growth market.

Business background & Thesis below


Summary: Cautiously bullish META on cheap valuation vs. core EBIT, but hesitant to add near-term given ad revenue risk from recession and leadership uncertainty.

On $META, a doozy of an earnings

1/n

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Some positives:

Reels engagement growing, now at a 3B run rate from 1B a quarter ago. Although this is a less profitable rev stream than Stories. Zuckerberg even mentioned they were taking share from TikTok.

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Business message ads at a 9B run rate, with Whats App generating 1.5B, up 80% yoy.

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Time and engagement on core apps have all increased yoy

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Some negatives

RL is almost 20% of operating expenses and generates only 2% of the revenue!

Op ex guide of 100B from 88B in '22

Capex guide of 37B  from 32B in '22

Gargantuan is an understatement

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Had thought Zuckerberg would have been significantly more measured in costs going into "one of the worst downturns that we've seen in recent history"

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What market thinks of $META cap allocation, roughly.

Core biz earns about $32B in EBIT (using maint capex of $15B)

Adding RL and growth capex is $27B

10x core EBIT is $320B, META currently has an EV of $250B. Market believes growth capex & RL worth roughly negative $70B

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We find this pessimistic given previous capital allocation and execution. However, we are hesitant to add as we believe the next shoe to drop is ad revenues falling given a mild recession (or worse). META is also in limbo until market believes in leadership again.


Summary: Small caps can outperform if economy stays stable and AI optimism fades but doesn't pop.

IWM is the Russell 2000 small-cap ETF, pass-through

For small caps to meaningfully outperform two conditions must be met:

1. Economy remains stable
2. AI optimism slightly fades but doesn’t pop


too many negatives for us... we are passing

Summary: Passing on INMD: one-product risk, crowded RF microneedling market, higher financing costs, poor customer service.

$INMD we are passing

They are in danger of becoming a one product company with the Morphues8 as their flagship

The Radio Frequency Microneedling space has heated up dramatically since 2018 with strong competitors like BTL, Candela, Sciton, Alma, Cutera, Lumins, Lutronic and BENEV having competing products.

Inmode is now charging for demos

Contending with higher financing costs for longer is a headwind

Poor customer service

too many negatives for us...

Upside risks:
Morpheus8 still has an advantage in the marketing department (clients request treatments directly). This may have more staying power than we believe.


Summary: Bullish Dr Martens: destocking in final innings, expects the stock to reward patient investors despite challenged category.

$DOCS.LON (Doc Martens) - Sentiment was exceedingly pessimistic to the extent that even after a ~20% rev decline the stock rallies. Wholesale segment has struggled but destocking looks to be in final innings. The category overall remains very challenged but we expect this name to reward the patient.

Pernas Research on Dr Martens $DOCS:
(extract from their weekly report) https://t.co/qrv2fN8eSB


Summary: Bearish BABA; China's political environment kills free enterprise — avoid.

@EquityBrian Unfortunately China has become a police state where free enterprise goes to die. Save your money.

Don’t be surprised when $BABA reports above par earnings Thursday morning.

Current restructuring plans + cost cutting + improving cloud/e-commerce margins will continue to be a massive tailwind over the next few quarters/years.


Summary: Bearish EAF; range of outcomes skews negative.

@OSA_Rochester Interesting, didn't know about the history with $GFP, thanks for sharing. Yea, the range of outcomes doesn't seem too positive for $EAF.

@pernasresearch The cost advantage for India/HEG, I believe, comes from access to lower costs of energy & labor. Graftech's plants aren't getting access to this. I think HEG wants Seadrift. That said, the timing of HEG's investment is probably not the best. Graftech is awaiting approval of a DOE


Summary: Market continues to grind higher; warns complacency risk when VIX drops below 15.

Market will continue to grind higher. Complacency risk starts setting in when VIX is lower than 15.


Summary: Long AOUT: severely undervalued near-net-net at EV/EBITDA <2, 40%+ gross margins, no debt, buybacks; 100%+ upside.

$AOUT earnings are tomorrow. AOUT is severely undervalued, perhaps due to its spinoff status and being lumped in with gun stocks even though 50% of revenues come from outdoor accessories which have grown yoy.  AOUT is almost a net-net that trades at about EV/EBITDA < 2

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$AOUT share price has declined more than most gun stocks while revenues have fallen at half the rate. AOUT has resonant brands that have historical gross margins of >40%. With no debt, and a shareholder-aligned management team (repurchased 7% of shares in Jan)...

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AOUT has more than 100% upside from today's levels.


Summary: Long MGM and retail casino operators: competitive moat in online gambling via partnerships, geographic scale, and loyalty programs; >1-year horizon.

Retail casino operators such as @MGMGrand could have serious upside. Wide geographic footprint, brand, and loyalty program give them a large competitive advantage in the growing online gambling industry

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Online gambling operators have crushed it so far but retail operators have been left behind even though they share the upside in the online gambling market (online operators have to partner with retail operators). Think looking out >1 year presents awesome opportunities currently


Summary: Bullish HAI.TO: defense spending inertia + strong demand (Navy/Shield AI) offset tariff concerns for H2 2025.

likely good amount of uncertainty but we think defense spending has significant inertia and HAI's technology is in significant demand (Navy contract, partnership with Shield AI). HAI is a play on defense spending ramping up and we don't think tariffs will effect them significantly here.

I know $HAI.TO has tailwinds for H2 2025, but isn't there a decent chance they get smoked the next two quarters?

Pulled guidance b/c tariffs, exports, and uncertainty around rev timing for Navy/control room/government spend. Plus lapping two of their best Qs ever.


Summary: Long PTON with >100% upside from current levels per detailed write-up.

$PTON write-up. We think it has more than 100% upside from today's levels.

https://t.co/aGgJzgFCeq


Summary: Endorses bullish thesis on Remitly as a potential dominant digital remittance platform.

Mixing it up a bit with an old school/fintwit 1.0 thread on a small cap challenger co that I believe has some real potential. This is an incomplete thread but here’s the punchline: Remitly has a shot at being the booking .com of the digital remittance space $RELY (1/x)


Summary: Long REX; holding confirmed after 30% earnings jump, with carbon sequestration facility nearing completion as additional catalyst.

$REX up 30% on another great earnings as they capitalized on high crush spreads. They are also making good headway on their carbon sequestration facility and expect it to be done in Q2 2024. Surprising how underfollowed this company was.

Disclosure: We are long.


Summary: Disclosed long META position alongside earnings highlights.

$meta earnings highlights

Family of Apps has 3.07B DAUs

Reels exceeded more than 200B views per day
More than 75% of advertisers now using Reels

Ad impressions up 34%
Ad prices down 16%

Capex of $6.5B
RL losses were $ 3.7B

disclosure: long $meta


Summary: New long position in TITN; 30% upside thesis on overlooked margin improvements, favorable crop prices, and durable CNHI dealership arrangements.

Our newest holding is Titan Machinery $TITN - a leading dealer of CNH Industrial with a global network of approximately 120 dealerships. CNHI is the second largest agricultural OEM worldwide, following industry giant John Deere.

1/n

https://t.co/aknUGPz8Zm

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Operating mainly in the United States, $TITN offers a comprehensive range of CNHI equipment, supported by dedicated parts and service provisions. These semi-exclusive dealership arrangements with CNHI equipment are extremely durable.

2/n

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Over the years, $TITN  has made significant operational changes to increase inventory turnover and margins, which we believe the market is overlooking. It has recently benefited from higher crop prices and favorable regulations.

3/n

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We believe the sustainability of this favorable business environment for $TITN is underestimated. We expect continued substantial cash flows and project a potential 30% upside from its current valuation.

4/4


We are long #CARD $CARD.L … We are holding.

Summary: Long Card Factory; holding on LFL growth, online expansion, steady margins, and management's cost control despite labor headwinds.

We are long #CARD $CARD.L

Card Factory HY25 earnings

Positives
1. LFL growth 3.7% yoy
2. online +8.8% yoy
3. Product Margin steady at ~70% despite more sales of higher ASP non-card items.

Negatives
1. labor cost pressures (see pic below, consecutive years of 10% increases but set to slow)
2. Volume declines in Cards (less store space dedicated to cards, ASP increases, weather has certainly not helped)

In sum:
Management retains levers for expense management. They have done a good job of controlling all non-labor costs. We expect CARD to continue to show growth in this value-seeking environment. We are holding.


Bitcoin replacing gold as a store of value would value each coin at 430k. The way things are going in the stock market value investors are going to start investing in BTC.

Summary: Long BTC to $430K as it displaces gold as store of value; value investors rotating in from equities.

Bitcoin is eating the world...

It has become a supermassive black hole that is sucking in everything around it and destroying it. This narrative is only going to grow over the next 18 months.

You see, gold is breaking down versus bitcoin...and gold investors will flip to BTC https://t.co/ox7KRY5VRo


Summary: Bullish on Burberry: new designs embrace British heritage USP and could mark a brand turning point.

$BRBY runway show was well received. Lee's designs were in line with the strategy, namely embracing its USP which is British heritage. It will take some time for these designs to reach stores and potentially could mark a turning point in the brand.


Summary: Long Vusion Group on strong 2023 earnings: 30% revenue growth, EBIT +62%, Walmart rollout continuing, first dividend initiated.

$VU.PA (Vusion Group) 2023 earnings were great across most metrics.

Revenues grew by 30% to €802mm. Maintaining their revenue guide for €1B in 2024 as the US nationwide Walmart contract continues rolling out.

EBIT was €52mm, up 62% yoy due to gross margin expansion. 2024 should see a similar growth rate in EBIT.

Working capital needs continue to decrease in terms of days of inventory, DSO.

By the end of December, Vusion Group had 82mm ESLs (shelf labels) being cloud managed and 17k stores ( a 22 and 30% increase in 8 months time respectively)

And they are initiating their first ever dividend at €.3 per share.

Disclosure: We are long.


Summary: Bullish on global defense sector; significant upside as geopolitical tensions drive sustained 50%+ spending increases.

Global defense basket: ITA (US), XAR (US aerospace), DFEN (defense)

Currently looking at companies in the defense industry. We think there is a significant upside with countries increasing defense spending by 50%+. As geopolitical tensions rise, defense spending will likely beget more spending. https://t.co/ME9JLaENjt


Summary: Bullish TG after commodity division sale for $116M; builds on prior 'interesting at these levels' thesis.

$tg looking even more interesting after selling its commodity division for $116mm.

https://t.co/rRvgsL3vBJ

$TG looking interesting around these levels. Cyclical name that recently suspended dividend. In normalized environment it should be able to generate about 30mm in FCF.  PE film segment has seen secular headwinds but growth market could be in semis. No position.


Summary: Long FranklinCovey: 15x 2021 earnings seen as cheap for a timeless brand with growing SaaS offering.

@franklincovey catchin a bid today. most recent quarter showed continued growth in their saas offering even in #covid times. for a timeless brand with a growing saas offering, 15x 2021 earnings seems cheap given the environment.


Summary: Bullish on SES-imagotag as a play on the massive and overlooked retailer digitization trend.

@SESimagotag partnering with Coca-Cola in Japan for advertising at the shelf. The digitization of retailers is a massive and overlooked trend.

https://t.co/TMf26pqkpT


Summary: Post-earnings DFIN bullish: crushed expectations on transactional activity + capital markets; 50% upside seen from current prices.

@DFINSolutions earnings crushed expectations all the way around! Transactional activity significantly better than expected and capital markets are roaring and open for business. We believe DFIN still has an additional 50% upside from current prices. 🚀🚀

@DFIN catching a bid today! Earnings coming out tomorrow before market open. Currently one of our highest conviction ideas.

Check out our valuation at https://t.co/5cWgejpiuI.


Summary: Bullish META on continued revenue growth, Reels engagement gains, and strong ad ROI.

Our Q1 2023 Investment Letter

$META @fanatec

https://t.co/kqmdgZWz5a

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@fanatec $meta continuing to perform. revenues up 6% yoy on cc. reels increasing time spent on IG by 24% and will be revenue neutral by end of year. every dollar spent on ads across their platform generates over 3 dollars of revenue in  the economy.


Summary: Bullish META: Llama 3 competitive with GPT-4, early innings of cost reduction and engagement growth via AI integration.

$META's chat gpt (Llama 3): https://t.co/HtMz6YkJNJ

Initial impressions: definitely better than ChatGPT-4 in several areas, likely due to a much different and unique training dataset. It's now being integrated across platforms, enabling users to generate and search for unique content.

Still first innings as META continues to drive down the costs to create content while increasing engagement.


Summary: Bullish on SES-imagotag: Walmart near-nationwide partnership signals strong product offerings, yet stock remains underappreciated.

SES AI Corp NYSE-listed SES; Walmart partnership context confirms

@sesimagotag flying under the radar even after partnering with Walmart almost nationwide. It is an incredibly strong signal of the strength of SES's offerings when the largest low-cost retailer partners  with them.


Summary: Long META on reels/click-to-message/AI content tailwinds despite choppy ad environment and Reality Labs losses.

notes on $meta earnings

meta should see significant tailwinds from reels, click to messaging, and ai driven content increasing engagement. headwinds include choppy ad environment and reality lab expenses.

q3 ad revenue growth driven by online commerce(chinese companies), CPG, and gaming

Ad impressions grew 31% while price per ad dropped 6%

AI driven feed rec improvements have driven time spent on ig and fb by 7%

Click to message is now at a multibillion dollar run rate

Reels is now revenue neutral. Should be interesting to see the true growth of reels on ad impressions and prices.

Llama had 30mm downloads in September

Reality Labs had losses of 3.75B

Long $Meta


Summary: Long DFIN with 30% upside target; largest position, backed by strong software growth and earnings momentum.

$DFIN Q4 2020 Earnings was a great one. ex print revenue increased 20% y/y. Software growth grew 8% q/q. They have substantially paid down their debt along with increased share buy backs. This company is a shareholder’s dream.

---

$DFIN Q1 2021 is another great earnings quarter. Both for the top line and bottom line. Most important metric is that Software Sales up ~28% q/q. We still believe DFIN has 30% more room to the upside and remains our largest position.


Summary: Activist engagement with Zumiez board; implied bullish/long stance via shareholder activism.

Our activist letter to Zumiez board $ZUMZ

https://t.co/lzwRpsaLOL


Summary: Hyperscalers seen as near-term beneficiaries of DeepSeek efficiency shift; longer-term outlook uncertain.

US hyperscalers: Microsoft, Amazon, Google, Meta, Oracle

Although DeepSeek represents a significant shift in AI development, the rate of demand for intelligence is unlimited:  DeepSeek is only bullish for AI developments long term.

However short term it could cause ripples as investment consternation rises: there could be a pause on spending as the theme of efficiency raises its head, questioning the use of multi gigawatt data centers and spending hundreds of millions to billions of dollars for a training run.

What is fundamental and more unclear now is where the profits will accumulate. We wrote about what we know about DeepSeek below:

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Deep Seek R1 is an open- source model built on a fine-tuned version of Deep Seek V3 with 671 billion parameters. Why It’s Different:

No Supervised Fine-Tuning:

Deep Seek eliminates the need for traditional supervised fine-tuning, a process typically used to teach models chain-of-thought reasoning by including step-by-step logic in the training data. Instead, Deep Seek uses an in-house system called Group Relative Policy Optimization (GRPO), which provides feedback based on accuracy and efficiency. This approach enables the model to teach itself how to reason without explicit instruction.

---

Training Efficiency:

With its MLA (Masked Latent Attention) technique, Deep Seek reduces computational intensity. It can compress tokens while maintaining predictive accuracy. This means less memory and less GPUs. It requires just one-tenth the training  of Meta's Llama models and one thirtieth that of Chat GPT.

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Lower Inference Costs:

Leveraging a Mixture-of-Experts (MoE) architecture, Deep Seek activates only the most relevant components during inference, minimizing energy and cost. It activates < 37B parameters out of 670B during inference. This results in costs of $0.55 per million tokens vs $15 for GPT—a 96% drop in inference costs. ChatGPT also uses this architecture however it is significantly larger

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DeepSeek has upturned the AI ecosystem. Capital is now less of a moat and the threat of new entrants has gone up significantly.

Hyperscalers will likely be the beneficiaries in the short term however the future has become more uncertain.


Summary: Long PSFE on CEO-led platform transformation, iGaming regulatory moat, and U.S. iGaming market set to double by 2029.

We are long $PSFE Paysafe

Stock is up 18% on takeover rumors. Our deep dive was released yesterday (epic timing).

Business background + Thesis:🧵

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Paysafe is a global payments provider specializing in high-risk verticals: iGaming, travel, crypto, forex trading etc.

---

The company went public via SPAC in 2021 and has since declined ~80%, largely due to SPAC bubble imploding.

---

Under new CEO, Paysafe is successfully transitioning into a unified, growth-oriented payments platform after years of fragmented operations from M&A.

---

Two business segments:

Merchant Solutions: Payment processing driven by direct and distribution partners (ISOs, ISVs).

Digital Wallets: Primarily Skrill and Neteller which are heavily used in iGaming throughout Europe

---

Paysafe’s edge comes from deep regulatory expertise, merchant underwriting in high-risk industries, and global banking relationships that competitors struggle to match.

---

The U.S. iGaming market is still in its early stages and set to double by 2029.

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Full write-up that also includes a brief industry background: https://t.co/hSLIJo4rng


Summary: Bullish DFIN: capital structure improvement via revolver terms + term loan refinance saves ~$14M annualized.

Donnelley Financial Solutions has been able to improve its capital structure by bettering the terms on their revolver along with refinancing roughly 200mm worth of their term loan. Savings will be ~14mm annualized. The good news keeps on comin. #DFIN


Summary: Looking to add to AOUT on strong fundamentals and ongoing buybacks; benefits from rotation away from high-flying tech.

significant re-pricing of high-flying tech names could bode well for value names. We are looking to add to $AOUT. Fundamentals are strong and they continue to buy back shares


Summary: Bullish PRG on its expansion into e-commerce, citing convenience as a tailwind.

$PRG moving more heavily into the e-commerce space. Convenience is king.

https://t.co/lFx7YBEm2e


Summary: Largest held position since May 2020; ongoing long with momentum noted.

$DFIN catching a another bid today. Momentum surge. This has been the largest position in our account since May 2020.


Summary: CSL plasma raising donor rewards 200% is a positive catalyst for PAYS.

CSL plasma increasing rewards for first time donors 10% to $1100/month.CSL has increased rewards by almost 200% since last year to incent new plasma donors! Should bode well for $PAYS.

https://t.co/8BH3zONTWj https://t.co/zEyxQKEf9R


Summary: Bullish on the CEO departure despite stock's -12% reaction; sees founder's exit as a positive catalyst.

$GIL CEO/founder abruptly handed his walking papers. Stock is reacting negatively (-12%) but this could be a positive as we view the CEO as more a promotor that has made a series of missteps. We covered Gildan earlier this year and assigned it a neutral rating.


Summary: Long FranklinCovey with ~100% upside on brand strength, competitive pricing, and multi-modal offerings.

We believe @franklincovey has roughly 100% upside from today's price. The combination of a relevant brand,  extremely competitive pricing , and offerings in a convenient range of modalities should provide a bed rock for growth. Check out our valuation at https://t.co/XK1HjMCUzp.


Summary: Bullish RELY into earnings tomorrow; expects a crush despite stock not reacting to peers' strong comps.

We don't usually consider earnings plays but despite recent great comps in the remittance market-- $WU and $EEFT-- Remitly stock ( $RELY) hasn't responded. We suspect they will crush earnings. They report after close tomorrow.


Summary: Bearish Tomra Systems; framing it as an ESG darling declining back to reality.

Another ESG darling coming back down to reality (Tomra Systems)
#ESG $TOM.OL https://t.co/ImSXOHSdoX


we are not confident cash flows will stay healthy. we do not believe in MLM as a reliable distribution mechanism. Recent price increases won't help as this is a price elastic category

Summary: Bearish MED: doubts on cash flow health, MLM distribution unreliable, price hikes backfire in elastic category.

Although valuation is tempting  for $med, we are not  confident cash flows will stay healthy. While they fit the health and wellness trend nicely, we do not believe in MLM as a reliable distribution mechanism. Recent price increases won't help as this is a price elastic category


Summary: Bullish on Doc Martens; sees significant potential upside per new write-up.

New write-up on $DOCS (Doc Martens). We see significant potential upside.

I will be discussing tomorrow on Woodstock III with host @evfcfaddict along with @augustusville, @Symmetry_Invest, @SharogradskyM, @diegobmilano, @ToffCap
https://t.co/m46FNKpXQL


39% y/y revenue growth with an exceedingly long runway. GAAP earnings profitability reached. should throw cold water on the 'business-doesn't-scale' crew.

Summary: Bullish RELY after Q3 beat: GAAP profitability reached, 39% y/y growth, long runway refutes scaling concerns.

$RELY Q3 earnings: beat, beat

well received by market (finally). Up 18% AH.

GAAP earnings profitability reached. should throw cold water on the "business-doesn't-scale" crew.

39% y/y revenue growth with an exceedingly long runway


Summary: Bearish on THRY: promotional sales culture, questionable product-market fit, and puzzling international expansion despite large domestic TAM.

I can’t speak for $HUBS valuation I haven’t done the work. But there is substantial anecdotal evidence that people love the product. With $Thry not so much imo, I think they are very promotional. Also, if the opportunity set was so large in the U.S., as the CEO stated, why look to expand in Australia?

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We published this on 5/24/2023: “PASS. THRY owns online business directories like yp..com (formerly known as the Yellow Pages) that are heavily cash flow generative but deteriorating quickly. THRY has seen success upselling small businesses on its all-in-one SAAS solution Thryv: payments, reviews, task automation, payroll etc. all in one place. Subscriber growth has been trending at double digits per annum but online reviews seem to indicate a heavily promotional sales team. Disaggregating their subscriber base from the different tiers in their offering has also proven difficult. They have begun to expand internationally and it is curious with such a massive TAM domestically (400k+ small businesses in U.S.) why management would divert resources to expanding elsewhere. Even still, if we had spoken to long time SAAS users that loved the product we might have reconsidered this but still haven’t come across them. Ultimately, we cannot fully get behind the product-market fit and are passing”


Summary: Long Dr. Martens: DTC stability confirms brand health, cost savings and wholesale recovery expected to drive positive comps in H2 FY2025.

$DOCS.L Dr. Martens releases FY 24 results

Largely as expected, revenue declined yoy by 12.3% (this was actually slightly better than we anticipated).

EBITDA down ~20% due to deleveraging effects.

The below chart beautifully explains the revenue decline.

Wholesale, primarily U.S., explains over 100% of the yoy rev decline. DTC largely doing well in what is a tough macro environment for boots.

The wholesale malaise has likely reached bottom and DOCS has plans to help their wholesale accounts and DTC grow. (mainly by increasing marketing spend by 1% of revenue and focusing more on products than brand story).

The new CFO, Giles Wilson, announced cost saving reductions of £20- £25mm that the market seemed to like. Cost reductions will be across the board - mainly support costs and supply chain.

All in all, we think DOCS is getting better (or less worse) at communicating expectations with the street.

DTC stability gives us confidence that the brand health is intact and we look forward to the second half of FY 2025 when the cost efforts will reach fruition and DTC & wholesale will begin to comp positive.

We are happy with our add on April 16 as the stock has recovered meaningfully since.


We have added to our position. We believe the challenges DOCS faces are category challenges that are compounded by operational issues that are temporary in nature. We think the brand is not impaired and still healthy. This could mark DOCS taking its last bath.

Summary: Added to DOCS.L long; challenges are temporary/category-level, brand intact, this may be the last washout before recovery.

$DOCS.L stock price getting hammered. Not a lot of bulls left in the rodeo.

We have added to our position.

We believe the challenges DOCS faces are category challenges that are compounded by operational issues that are temporary in nature.

Challenges are primarily wholesale related and will continue into FY 2025. (Double digit declines in rev forecasted).

Kenny Wilson will step down as CEO and assist in transition efforts. Will be succeeded internally by CBO Ije Nwokorie. (Primera Advisers has ~40% ownership and should provide continuity).

We think the brand is not impaired and still healthy - it’s safe to say not a lot agree with us.

This could mark DOCS taking its last bath. Definitely a name that requires patience.

Write-up below in comments.

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https://t.co/eEoGOxXjs6


Summary: Bullish on remittance-exposed equities as remittances surpass FDI in EM inflows and the trend persists as developed world ages.

Sleeper trend alert: 🚀 Remittances – when migrants send money back home to loved ones. 💸

Remittances play a crucial role in helping emerging markets tackle soaring food and energy prices. 🌍

They now surpass Foreign Direct Investment (FDI) as the main source of inflows for EMs!

And as the developed world grays, this trend is set to persist.

$RELY $WU $EEFT $PYPL  #Remittances #EmergingMarkets


Results align with our thesis that Xometry is a major lever on the large digitization trend underway in manufacturing. Disc. We are long

Summary: Long XMTR; Q3 results reinforce thesis on manufacturing digitization with 19% revenue growth and enterprise account expansion.

$XMTR Q3 results

Results align with our thesis that Xometry is a major lever on the large digitization trend underway in manufacturing.

Growth & Scale

-Achieved 19% revenue growth in a challenging environment and gross margin enhancement of 250bps

-Non-gaap operating expenses grew slower than revenue

Enterprise Opp:

-Increased the number of accounts spending over $50,000 annually by 23% YoY to 1,506. (one of our main KPIs)

-Introduced more integrations with client ERPs along with more service verticals (Expanded to 4,200 active suppliers)

Disc. We are long

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https://t.co/eXOBqnohB5


Summary: Confirms still holding Burberry long position.

@joinyellowbrick @LionCubsFund @valuedontlie Still holding 💪

Some $BRBY.L $BURBY pitches from last year (unsure if they are all still holding)

@pernasresearch @LionCubsFund @valuedontlie

https://t.co/9vfv5EpDlh https://t.co/YPpP1tFqNQ


Summary: Bullish CARD.L: FCFF improving on competitive advantages, reinvestment, and value macro; dismisses one-year card volume decline as insufficient evidence of structural decline.

$CARD.L We have posted our quick calculation on "steady state" FCFF..... (est ~£50mm)

Whether the true figure is closer to £40 or £50 is far less important to us than the future contours of the business.

This is a business that has suffered from severe underinvestment since it went public in '14.

Given CARD's competitive advantages, a value-seeking macro environment, and competent management making the right investments we believe FCFF will continue to markedly improve.

Regarding @david_katunaric citing volume of greeting cards declining in 2023 by 8%: If volumes have indeed accelerated (structurally) to the downside this would be bad, but we certainly need more than one data point. I would hardly be surprised if volumes were up/flat next year.

Thanks to the feedback I’ve received from one of my followers, I sold my $CARD.L position

Card Factory’s accounting for reporting discounted leases on the balance sheet is super aggressive, and I should have taken the approach of calculating annual lease cash costs instead of https://t.co/CTal1aWqR8


Summary: Passing on TFF Group: 20x earnings looks rich given expected bourbon distillery retracement and volatility ahead.

TFF Group SA, French barrel/spirits company, Euronext Paris

Passing on TFF Group. $TFF produces barrels for wineries and distilleries, with three segments focused on wine, bourbon, and whiskey. Industry structure is an oligopoly with two other companies, Oeneo and Independent Stave Co.

1/n

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TFF Group is expected to make $350mm in revenue for 2023 with the majority of its revenue coming from the wine and bourbon segments. Unlike wine and whiskey, bourbon has seen a boom in production with # of distilleries in USA going from 50 in 2006 to 2100 today.

2/n

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We believe a significant retracement in distilleries will occur, similar to what happened with vodka distilleries in the early 2000s. Although $TFF has significant competitive advantages, trading at 20x earnings with likely volatility ahead will keep us sidelined.

3/3


Summary: Less supply than expected is bullish for TLT.

@gavin_pyott @VPatelFX Oh man my bad I snoozed on this, less supply than intended so good for $TLT 🚀

@VPatelFX @pernasresearch this good or bad for TLT?


Summary: Bullish on cybersecurity sector; crypto-enabled ransomware creating a structural tailwind for the industry.

CIBR First Trust Nasdaq Cybersecurity ETF

two trends interacting with each other leads to a cambrian explosion of sorts. Cybersecurity and cryptos are an example as cryptos have made ransomware and other security threats more feasible. Should be a good tailwind for the cybersecurity industry.

#cybersecurity #cryptos


Summary: Long XMTR as leading digital manufacturing disruptor in second inning of secular growth, mispriced by market due to mischaracterization of its marketplace model.

We are long Xometry $XMTR

The leading disruptor in digital manufacturing and is in the ~second inning of a large secular growth story.

Business background & Thesis below 🧵

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Xometry is the leading disruptor in digital manufacturing, connecting businesses needing custom parts with a global network of manufacturers capable of producing those parts.

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They focus on the market for non-contract manufacturing. This involves local relationships with smaller manufacturers and entails lower volume runs—anything from a single prototype to a few thousand units. (Global TAM ranges from 100B to 2 Trillion)

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Below is an example of your garden variety automotive company (a potential Xometry customer). Companies like this have to manage the “long-tail” of smaller suppliers. https://t.co/RSq5WUCgMY

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Traditionally, customers spend significant time searching for local manufacturing shops with the capacity, expertise, and willingness to produce custom parts. The process is painfully analog.

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To solve this problem, Xometry connects customers through its digital platform to over 3,400 active small-to-medium-sized manufacturers. Their platform reduces high search costs, long lead times, and quoting frictions.

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Ultimate goal: Xometry aims to be the one-stop shop for all non-contract processes-- CNC machining, sheet metal fabrication, prototyping, low-volume injection molding, 3D printing, tubing, and others https://t.co/vzOJ0g04Po

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Secular growth opportunity: The industry has been slow to change but digital marketplaces like Xometry are beginning to gain respect for their staying power. This change will be gradual but inevitable, as digital marketplaces continue to grow stronger with enhanced traceability, quality, and efficiency.

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Xometry is misunderstood by the market: The mischaracterization of Xometry’s business model as “not a marketplace” even though it enjoys network effects is a contributing factor to its mispricing. https://t.co/CKNcbS5Mu9

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AI leadership: Xometry leads the industry in using AI and machine learning for pricing, leveraging is partnership with Google and the largest data sets to train its models.

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Write-up https://t.co/eXOBqnoPqD


Summary: LTO sector has long runway; PRG and KPLT should become significantly more profitable as buyouts and delinquencies normalize.

$PRG earnings a bit underwhelming on the e-commerce side (only 13% of GMV). Although recent offerings such as one click integration should help with future quarters. Should be interesting to see $KPLT earnings. Still a long runway for the LTO players.

https://t.co/W0YGhnS2Qi

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These businesses should become significantly more profitable as early buyouts become less common and delinquency rates lower.

More info: https://t.co/mPLu5m5cvy


Should be interesting to see $KPLT earnings. Still a long runway for the LTO players


Summary: Still bullish PTON despite elevated churn; brand intact, cost saves on track, and risk-reward remains attractive.

$PTON earnings highlights

-monthly churn a bit higher than expected at 1.4% vs .8% previous quarter. mostly due to price increases and seasonality. Recent churn rates are trending lower (expect it to be around 1%)

1/n

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-live in-studio classes oversold every time. brand is alive and well.

"People lined up around the block for hours, classes oversold, crashing our reservation system. I mean it's just insane. And that's not what the industry is experiencing generally"

2/n

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$PTON will make their self-assembly bike available on $AMZN. PTONs premium models will only be sold on their website.

There are 500k searches per month for peloton on amazon.

3/n

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PTON is tracking ahead of their 500mm in cost savings in opex. Aiming to be cash flow neutral by end of FY 23 with 1B in cash on balance sheet.

4/n

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Earnings were in line with expectations although churn was higher than expected. With the brand still being intact, cost savings continuing on schedule, and the many operational changes PTON is making, we still like the risk-reward setup here.

5/n


Summary: New long position in American Outdoor Brands; 60%+ upside thesis based on cheap valuation (10x earnings), 50% YoY growth, trading 40% below acquisition price.

American Outdoor Brands Inc, US-listed AOUT

Our newest position: https://t.co/dtbFPLAlRD

We believe there is at least a 60% upside from here.

#Americanoutdoorbands

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-Recent spinoff trading at about 10x 2021 Earnings.

-Growing at about 50% yoy

-At a 40% discount below what it got acquired for 3 years ago in a much more depressed environment (pandemic and political)


Summary: Long Hostelworld with ~60% upside on brand strength and hostel-industry growth initiatives.

We value @hostelworld to have about a 60% upside . Their brand and recent initiatives they have taken make them well poised to grow in line with the hostel industry. Our valuation is found on https://t.co/XK1HjMCUzp. Let us know what you think!


Summary: Still bullish LEU: significant upside on shifting global uranium sentiment and HALEU production monopoly.

$LEU up about 400% since our write-up. We still see significant upside with global sentiment on uranium changing along with their monopoly on HALEU production starting in 2022.

https://t.co/1DJwp82mpb


Summary: APLD could be interesting given LOI signed with hyperscaler.

@PaulBieber @KevinLMak Difficult to make apples to apples comparison as data center locations matter significantly. $apld also could be interesting with loi signed with hyperscaler

@KevinLMak What are your thoughts on $WULF and $IREN given today’s news?


Summary: Long RELY despite AH selloff; management right to keep investing in growth given large market opportunity and strong liquidity.

Remitly $RELY earnings update:

Despite revenue beat, market is hammering the stock AH, down 22%

Revenue totaled $241.6 million, compared to $169.3 million, up 43%. y/y (slight beat on estimates)

Net loss was $35.7 million, compared to a net loss of $33.1 million. y/y (slight miss on estimates, mostly non cash SBC)

Adjusted EBITDA was $10.5 million, compared to $(3.7) million. y/y

Thoughts after call:

Management made it clear that they are focused on more growth expenditures and market clearly wants them to pare back and focus on profitability.

Remitly cash burn is ~breakeven and they have ample liquidity (over 400mm) and no debt. They are internally funding growth.

Shifting gears to focus on profitability now is not the right move given they are in the ~second inning of a large and scalable market opportunity.

Long $RELY


Summary: Bullish META with ~50% upside from current price based on their write-up.

Our write up on Facebook
https://t.co/fZcXgJqLke

$FB  $META

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We see about 50% upside from today's price


Do we think it is a good brand that is undervalued? Yes

Summary: DOCS viewed as undervalued good brand despite not being luxury-tier.

@hasilp89 @guastywinds Do we think $DOCS is on par with Louis V? No. Do with think it is a good brand that is undervalued? Yes

@pernasresearch @guastywinds Discounting seasonal products: imo it shouldn’t matter. You don’t find lvmh discounting seasonal products.

Consumer doesn’t see sales and say oh that’s not core black product. They see a discount and think this brand discounts.


Summary: Bullish on PAYS citing strong plasma trends visible on a longer time frame.

Helpful to zoom out to see how strong plasma trends are $PAYS https://t.co/Qt3YzrnsIp