Yet Another Value Podcast

Chris DeMuth joins the podcast to discuss the state of the markets in January 2023 and discuss what's on his mind, including updates on AVTI, the meme stocks roaring back, and why energy stocks seem poised to continue to perform well.  Chapters  0:00 Intro  2:15 What's on Chris's mind  5:20 Quick hits on ATVI, SPB, and SJR  15:00 More on ATVI  24:30 Meme stocks are back!  30:00 Continued discussion on AMC / APE  37:00 Shareholder discounts and WE's discounted desks  39:30 Energy stock performance versus energy prices over the past year  44:20 Why the world seems structurally short every commodity

Artem Fokin, founder of Caro-Kann Capital, discusses the bull case for Kaspi (KSPI). Kaspi is the dominant fintech in Kazakhstan, and Artem breaks down how it's trading for a value price despite rapid growth and how its dominance will allow it to grow into new sectors of the Kazakhstan economy.   Kaspi IPO case study from HBS: https://www.hbs.edu/faculty/Pages/item.aspx?num=56825  Chapters  0:00 Intro  2:30 KSPI Overview  8:15 Discussing how ingrained in Kazakhstan Kaspi is  11:20 Sizing and breaking down the payments business  24:45 How Kaspi's data helps them with consumer loans  31:30 Kaspi as a "tax" on the Kazakhstan economy  36:30 Discussing management and Kaspi capital allocation  43:40 Run on the bank risk 48:20 Kazakhstan country / GDP risk  53:00 Why hasn't KSPI succeeded outside of Kazakhstan  1:00:30 How to think about valuing KSPI  1:08:00 Framing KSPI's local currency risk

Jeremy Raper returns to the podcast to discuss his latest "engagement campaign" at London listed Serica Energy (SQZ). In particular, he focuses on why Serica is trying to rush through their most recent deal and why shareholders should consider voting against the share issuance at the meeting next week.   Jeremy's letter to Serica: https://rapercapital.com/wp-content/uploads/2023/01/open-letter-Serica-Board-1.pdf  All of Jeremy's engagement campaigns: https://rapercapital.com/engagement-campaigns/   Chapters  0:00 Intro  2:30 What's happening at SQZ  8:45 SQZ's past deal rejections and timing on this deal  15:45 Why an "accretive" deal does not necessarily create value  17:30 How this deal insulates management and discourages shareholder feedback  22:05 Discussing SQZ's shareholder base 27:30 How this deal gives away a controlling stake in Serica for free  30:00 What should shareholders who don't like this deal should do  32:20 How Serica management will respond if the current vote fails  36:05 Providing an update on the coal trade  47:35 Discussing Unit Corp (UNTC)

Judd Arnold discusses how the offshore place is at an inflection point and why he thinks Tidewater (TDW) is the best way to lay it.   Judd's initial piece on TDW: https://drive.google.com/file/d/1cKYzHg62bamDQa620NZcmn_af0A0xTfT/view  Judd's TDW space: https://twitter.com/CorneliaLake/status/1600172923355922434?s=20&t=_Q2xMKdTTh1Lhlp-HeRD3w   Chapters  0:00 Intro  2:30 What's interesting about offshore right now?  5:50 Comparing today's cycle to 2012-2014  10:00 TDW's replacement cost and why new build isn't starting any time soon  18:30 Why increasing utilization can quickly spike day rates  21:00 Discussing capital returns if we do see a day rate spike  25:20 Why focus on TDW versus the other offshore players?  30:30 What breaks the offshore cycle?  36:10 Offshore as a snowball running down the hill  39:30 How regulatory uncertainty impacts terminal value and potential new build dynamics  42:40 Discussing TDW's acquisition strategy  46:40 Given the cyclicality here, how do you value offshore?  54:40 Haven't the stocks already run?  59:30 What could accelerate the cycle?

The management team from Tidewater Offshore (TDW) comes on the podcast to discuss Tidewater and why we could be at an inflection point for the offshore space.   TDW's investor relations page (with investor deck): https://investor.tdw.com/overview/default.aspx  December OSV market report (from seabrokers): https://www.seabrokers.no/wp-content/uploads/SEABREEZE_December.pdf Chapters  0:00 Intro  2:50 What's different in the current cycle?  8:00 Why supply is so limited in offshore  13:10 What is TDW seeing on the demand side?  26:00 Discussing TDW's valuation and where earnings can go as rates rise  32:30 TDW's potential utilization 38:10 EBITDA to free cash flow conversion  43:00 What do day rates look like right now?  47:10 How has TDW set up their fleet to take advantage of rising rates?  51:10 But seriously.... why is this time different?  57:30 How low would oil prices need to go to start impacting offshore drilling demand?  59:00 TDW capital allocation going forward

Chris DeMuth joins the podcast to discuss the state of the markets in December 2022 and what’s catching his eye in event driven land, including updates on ATVI, why pre-arb was so bad in 2022, and  WLFC's proposed takeout.    Chapters  0:00 Intro  2:30 What's on Chris's mind  4:00 Discussing why "pre-arb" didn't work in 2022  11:20 Updating ATVI  21:00 Majority takeouts of minorities  29:45 WLFC takeout  37:20 AMZN's IRBT takeout

Lionel Hutz discusses his thesis for Liquidia (LQDA) and why the thinks they are likely to win their patent battle against United Therapeutics (UTHR). Lionel's LQDA write up: https://lionelhutz.substack.com/p/waiting-with-bated-breath-for-liquidia Chapters  0:00 Intro  2:50 LQDA overview  8:05 Diving into the patent background  16:10 Breaking down the conflicting rulings on the '793 patent  19:55 Why the PTAB ruling is the most important for '793  21:55 What's so unique about the judge's ruling on '793  28:30 Why PTAB ruled the '793 patent invalid  37:40 LQDA's primary argument for invalidating '793  43:30 Discussing the expert reports around the '793 patent  53:30 Timeline to monetization and why delaying LQDA is so important for UTHR  59:00 LQDA's upside if they win  1:13:00 LQDA's cash runway

Mordechai Yavneh, founder and PM at Focus Capital, discusses his investment in Silicon Motion (SIMO) and why he thinks it's "merger arb for people who don't like merger arb."   Focus Capital's research site (with SIMO deck): https://focuscapitaladvisers.com/research   Chapters   0:00 Intro  2:40 Why SIMO is different than normal merger arbitrage  6:00 More SIMO overview  11:25 Is the merger overhang impacting SIMO's price?  15:30 Discussing SIMO's fundamentals  21:30 Why companies are outsourcing to SIMO  25:50 Why SIMO is taking share 31:30 Breaking down SIMO's market share  34:15 Why SIMO's demand dynamics aren't like MU's  40:20 SIMO's proxy projections and fundamentals  45:35 How Mordechai looks at SIMO's fundamental value  52:15 Why MXL wanted to buy SIMO  57:00 Why SIMO saw some customer churn in ~2018  1:00:00 What are the odds the SIMO deal goes through?  1:03:45 Capital allocation in a potential deal break

Avi Fisher from Long Cast Advisors joins the pod to talk about CoreCard (CCRD). Key topics include the risks and opportunities from their Apple Card / GS relationship and the benefits of the CEO’s measured growth approach.   Chapters:  0:00 Intro  3:30 Avi's framework for evaluating stocks  22:45 How Avi found CCRD  24:35 CCRD's background  32:00 Discussing the GS relationship and concentration  36:50 CCRD's different revenue lines  40:50 Discussing the "Elephant in the room" (BB article on Apple trying to in house)  50:00 Could GS buy CCRD?  52:45 CCRD's valuation  59:00 What makes CCRD's product "premium"?  1:05:00 CCRD's approach to share repurchases  1:06:15 A little more on CCRD's management and history  1:10:30 Avi's closing thoughts

AJ Secrist from Firstlight Management discussed his thesis for Lamb Weston (LW). LW is a very strong business, and AJ thinks the market is missing just how much margin upside there is as COVID era deals with large customers reprice and the company laps 2021’s disastrous potato crop.   Chapters  0:00 Intro  2:25 LW Overview  9:35 LW Valuation  13:00 Isn't LW fully valued at these prices?  19:25 Discussing the current potato crop  26:55 Global margin upside  28:35 Why is scale an advantage for LW?  31:45 Why will LW's margins accelerate now?  34:30 Industry demand and supply dynamics  37:20 Capital allocation and share buybacks  41:30 Management incentives and share price targets  45:00 Potential private equity or BRK end games  48:10 A little more discussion on LW's potential P/E multiple  51:10 What happens if we have a low carb craze again?