If you’ve not done so already make sure to check out the Q2 2026 Fund Letters Round-Up - 115 letters have been added so far. It’s a treasure trove of insights and ideas.

To enjoy all the content we publish in full consider becoming a paid subscriber.

Subscribe now

Latest interviews with fund managers sharing their best ideas…

#137 - Colin King (Value Don’t Lie) 📗

#136 - Dan Rupp (Parkway Capital) 📗

#135 - David Ridland (Castlebay Investment Partners) 📗

BEST IDEA AWARD FOR THIS ISSUE 🏆

Minot Light Capital Partners on Xtract One Technologies 🇨🇦

One of the leading providers of automated weapons detection systems for sports and entertainment venues, schools, hospitals, manufacturing facilities, and offices. A possible multi-bagger.

A round-up of the best ‘fresh-off-the-press’ stock pitches…

Read more

(Disclaimer: This interview is for informational and educational purposes only, and should not be seen as investment advice. Please do your own research before investing in any company mentioned).

Thanks for taking the time to do this interview.

Can you please tell readers about your background, and how you got involved in investing in public companies?

My background is a blend of accounting, investing, and entrepreneurship.

I started my career in Big Four accounting, auditing public and private company financial statements.

This was a huge leap in my understanding of accounting and how financial statements are built (i.e. what lives behind each number). It also gave me early exposure to talking with company executives and management teams. I’m still hanging onto my CPA license to this day.

The next phase of my career was public markets investing as an analyst on the buy-side at a long-only GARP/special situations firm.

It was a small team of 3-4 analysts, very collegial, I covered 10 portfolio companies and had freedom to look at anything. I wasn’t really into investing in college, so I caught the “bug” a little later than most folks.

I learned a ton during my time at this fund, my PM and another analyst were phenomenal mentors and they had very different styles of investing.

On my first day of work, my PM handed me a copy of Greenblatt’s You Can Be A Stock Market Genius, which was pretty cool in hindsight.

We looked at just about every spin-off during my time there, if that gives you a sense for my current style of investing.

I was introduced to the concept of buying private companies from a colleague around 2015.

As a young and naïve value investor, I was attracted to the idea of building a mini-Berkshire style holding company of private businesses while redeploying cash flow into acquisitions or investments. It took 10+ years, but I finally did get there.

I met my current business partner in 2017. We have totally different world views, he’s an extremely frugal MacGyver-esque operator and marketer who previously worked at Google. And I’m a bit more risk tolerant, financial engineering type.

We’ve pulled together a few crafty special sits acquisitions in the private markets. It’s made for an excellent partnership and we continue to own everything 50/50 to this day.

We spent a year searching for a business to buy. My original thought was: take the things I learned in the public markets and how to identify a good business, and apply that to buying a private company.

In 2018, we bought our first business together, which was a parts delivery business, running auto and ag parts to dealerships in a tri-state area during a graveyard shift (12am to 11am was a typical shift). It was hard work with plenty of lessons learned.

That business was eventually sold and we redeployed the cash into a few other things throughout 2019.

Its been a slow build since then, but we’ve acquired at least one business each year since then, have sold a few things along the way, and added enough scale where we have a management team or at least a General Manager in each business.

Today, we have four operating groups in our holding company: a vertically-integrated consumer business, a home décor distributor, a financial training and services business, and a specialty insurance business.

We’re working on some public company investments at the holding company level as well, likely some friendly activist / suggestivist situations in smaller companies.

Hopefully our acquisition and operating experience can bring value to some of these smaller public companies.

Can you provide readers with a brief overview of Value Don’t Lie?

My newsletter covers mostly special situations of all varieties which I define as…

• spin-offs

• post-reorg

• management changes

• M&A transformations

• stub securities,

• activist investments,

• good co / bad co situations

• turnarounds

• liquidations

I’m an all-cap investor focused in the U.S. and tend to find my best ideas in the $1 billion to $3 billion market cap range.

Some background on the newsletter…

You either have the public markets bug or you don’t, so despite the private company endeavors, I’ve never really stopped following the markets ever since I left my buy-side role.

VDL started in 2019 as a simple blog for me to track notes and otherwise force myself to keep doing research.

Eventually, it grew and I turned on the paywall, which forced me to keep at it and produce good work.

To understand what VDL is about is to understand my “Mount Rushmore” of investors…

I consider myself a value investor looking for cheap stocks. I’ve always been attracted to Walter Schloss with his purely quantitative approach and flexibility to own a wide basket of stocks (i.e. minimal concentration).

Next is Greenblatt… I love the concept of catalyst-driven investing and looking for hard events or inflections which can force a re-rate.

Most investors have an image of Michael Burry based on what he’s doing on Substack today; but years ago, there was an excellent article on his approach and style, which I devoured.

His concept of “ick” investing really resonated with me. To this day, I love finding ideas that others are repulsed by. The less popular a name is, the more I want to do work on it.

Last is the classic Buffett partnership era. There’s a lot you can take away from this part of his career: a willingness to own private stuff, control investments, special situations, plain vanilla, cheap stocks, you name it.

What two stocks are you currently bullish on?

Read more

If you’ve not done so already make sure to check out the Q2 2026 Fund Letters Round-Up - 76 letters have been added so far. It’s a treasure trove of insights and ideas.

To enjoy all the content we publish in full consider becoming a paid subscriber.

Subscribe now

Latest interviews with fund managers sharing their best ideas…

#136 - Dan Rupp (Parkway Capital) 📗

#135 - David Ridland (Castlebay Investment Partners) 📗

#134 - Patrick Rial (TriVista Capital/Hosomichi Fund) 📗

BEST IDEA AWARD FOR THIS ISSUE 🏆

Deep Sail Capital Partners on Celestica 🇺🇸

Celestica has transitioned from its legacy roots as an IBM captive manufacturer to become a design and technology integration leader within the AI and cloud infrastructure space.

Celestica is well-positioned for multi-year revenue and profitability growth, driven by secular tailwinds in AI data center expansion specifically leveraged to 1.6T networking and Co-packaged Optics, both of which are burgeoning trends in data center architecture.

A round-up of the best ‘fresh-off-the-press’ stock pitches…

Read more

(Disclaimer: This interview is for informational and educational purposes only, and should not be seen as investment advice. Please do your own research before investing in any company mentioned).

Thanks so much for taking the time to do this interview.

Can you please tell readers about your background, and how you got involved in investing?

I grew up in the mountains of North Carolina in a large family. My three brothers and I all worked summer jobs to make some money, and at some point we started pooling that money to invest.

My oldest brother was the fund manager, and we bought a handful of stocks. While the analysis may have been limited, it got me excited about the stock market and drew my attention to the business section of the local newspaper – the Winston-Salem Journal. Before those summers, I turned first to the sports section.

After I graduated college, I taught in math and science in Cameroon as part of the Peace Corps and then spent time in Japan with the JET program.

After those experiences learning about the world, I returned to earn my MBA at Yale where I studied finance and investing. That jumpstarted my career as a professional investor when I was introduced to Overlook Investments.

Can you provide readers with a brief overview of your investment style and strategy - what type of businesses and situations do you like to invest in?

I spent nearly two decades at Hong Kong-based Overlook Investments, which manages around $8 billion and has one of the most successful track records of investing in Asia.

After studying the art and science of investing in Asia from my mentors – Richard Lawrence and James Squire – I wanted to embrace my entrepreneurial spirit and build my own firm focusing on small, growing businesses that wouldn’t move the needle for a larger fund.

Parkway is a pan-Asia (excluding India) long-only equity fund, primarily investing in compounders with a focus on value.

I founded Parkway in the summer of 2023, a time when some were calling China ‘uninvestible.’ It was a great time to launch a fund focused on value in Asia because we had many attractive opportunities available.

We split Asia into three geographies: North Asia (Taiwan, Japan, Korea), China + HK, and Southeast Asia.

We aim to have some balance across these three regions. Our objective is to deliver a portfolio with at least 10% earnings growth and at least 3% dividend yield. We call this the 10+3 Framework.

While 10% growth may sound easy, since its 2006 inception our benchmark has delivered 3% earnings growth and the S&P 500 has delivered 6% earnings growth over that period.

In addition to superior through-cycle growth, value is core to our investing style. Our mantra is to be ‘higher-quality and cheaper’ than the passive alternative.

Our investible universe across Asian markets is about 10,000 companies. We categorize companies as compounders, defensive, or deep value. We aim to keep most of the portfolio in compounders, whose primary function is to help us achieve at least 10% earnings growth for the fund.

We underwrite compounders for holding periods of at least 2-3 years, and I think in the fund today we have a handful of companies that we can hold for a decade or more.

Joining me on the team is our Chief Operating Officer Tom Royds and three wonderful analysts. One of our analysts brings more of a quant background and has created several useful tools that I use in managing the portfolio.

We keep the Parkway scorecard, which is a great way to quickly reduce our investible universe to a more manageable number of ideas.

Visiting companies and meeting management teams is crucial to our investment process, and collectively we meet about 300 companies each year.

The scorecard gives us a snapshot of a company’s financial history and current valuation, and we use the company meetings as a chance to learn more about the short- and medium-term outlook.

We don’t invest in companies just because they are cheap. There are hundreds of statistically cheap companies across Asia.

We also need the business to be high quality and managed by trustworthy executives who are taking clear steps to improve the business and grow shareholder value.

We look at capital returns very carefully, and the portfolio currently has a dividend yield of 4.4% and a buyback yield of 1.9%.

Where in Asia are you finding some of the most compelling opportunities? Is there any country or industry you will avoid?

Within North Asia, we are most keen on Korean small and mid-cap companies.

A lot of great companies that have little to do with artificial intelligence are being ignored by local retail investors piling into Samsung Electronics and SK Hynix. That has created a lot of temporary dislocations and great buying opportunities.

Similarly, many Chinese “old tech” companies are currently unloved. The Hang Seng Index fell almost 20% over a six-month period this year as investors rushed to buy into hot AI-related IPOs.

Several of the highest-quality Chinese tech companies are now trading at single-digit multiples, sitting on tons of cash, and are actively buying back a meaningful amount of their own stock.

We think a lot of the more established Chinese tech companies are undervalued, and we want to be invested in a select few of these companies where management is most aggressively taking advantage by reducing their share count at attractive prices.

Finally, in southeast Asia we continue to like Indonesia and the Philippines. While the Iran war has created some obvious short-term fiscal headwinds for these countries due to their energy imports, the companies we own there tend to have fortress balance sheets and offer a great combination of growth and yield.

What company are you sharing with readers today?

Read more

If you’ve not done so already make sure to check out the Q2 2026 Fund Letters Round-Up - 50 letters have been added so far. It’s a treasure trove of insights and ideas.

To enjoy all the content we publish in full consider becoming a paid subscriber.

Subscribe now

Latest interviews with fund managers/investors sharing their best ideas…

#135 - David Ridland (Castlebay Investment Partners) 📗

#134 - Patrick Rial (TriVista Capital/Hosomichi Fund) 📗

#133 - Lee Roach (The Value Road) 📗

BEST IDEA AWARD FOR THIS ISSUE 🏆

Palm Valley Capital Fund on Vontier

Sells the equipment, software, and recurring services that help convenience stores pump gas and process payments, repair shops diagnose problems, and car washes operate efficiently. 

The company has applied its cash flow to repurchasing stock and repaying debt, and the current enterprise value is near the low end of its range since the 2020 spinoff. Shares are trading for 9x expected 2026 free cash flow.

A round-up of the best ‘fresh-off-the-press’ stock pitches…

Read more

It’s exactly what it says on the tin - a curation of quarterly letters from a variety of fund managers, especially emerging fund managers.

Not every Q2 letter is released in the first ten days of July. However, below are 45 letters to get stuck into right away.

Visit the Quarterly Letters page on the website to see the latest letters as we continually add them.

To access to all our fantastic content consider becoming a premium subscriber.

Latest interviews with fund managers sharing their best ideas…

#135 - David Ridland (Castlebay Investment Partners) 📗

#134 - Patrick Rial (TriVista Capital/Hosomichi Fund) 📗

#133 - Lee Roach (The Value Road) 📗

2026 YTD Performances rounded-up (measured in USD on 30th June 2026).

S&P 500: 10%
Gold Oz: -8.4%
Bitcoin: -33.6%

Fund average so far: 6.52%

A round-up of the most interesting Q2 2026 fund letters published so far…

Read more

Latest interviews with fund managers/investors sharing their best ideas…

#135 - David Ridland (Castlebay Investment Partners) 📗

#134 - Patrick Rial (TriVista Capital/Hosomichi Fund) 📗

#133 - Lee Roach (The Value Road) 📗

BEST IDEA AWARD FOR THIS ISSUE 🏆

Top Tick Research on Securitize Inc 🇺🇸

The leading regulated infrastructure provider for tokenized real-world assets.

Traditional financial institutions are increasingly moving assets on-chain. At the same time, crypto-native investors are becoming more interested in real-world assets and the infrastructure supporting them.

Securitize sits directly at the center of that trend. If the tokenization of capital markets continues to gain traction, Securitize may become one of the clearest public-market beneficiaries of that shift.

A round-up of the best ‘fresh-off-the-press’ stock pitches…

Read more

For this edition we have removed the paywall so free subscribers can see what they’re missing. Enjoy.

If you’re starting research on a company make sure to check out the Company Index. This is a great place to start researching a stock. There are nearly 2,000 stocks listed so far, with more added every month.

Subscribe now

Latest interviews with fund managers/investors sharing their best ideas…

#135 - David Ridland (Castlebay Investment Partners) 📗

#134 - Patrick Rial (TriVista Capital/Hosomichi Fund) 📗

#133 - Lee Roach (The Value Road) 📗

BEST IDEA AWARD FOR THIS ISSUE 🏆

Dirt Cheap Europe on Churchill China 🇬🇧

Manufacturer of performance ceramics. Priced as a corpse, built like a survivor. 0.6x Book. Net cash. 6.5% dividend, and a 217-year-old rival that just died.

A round-up of the best ‘fresh-off-the-press’ stock pitches…

North America

Value Never Sleeps on GEE Group 🇺🇸

Provider of professional staffing services and human resource solutions. An activist-driven sale story trading near cash.

Deep Sail Capital on SuperCom 🇺🇸

Electronic monitoring disruptor nano-cap. 70-90% hidden revenue growth. 4× Adj EBITDA

Price and Punishment on Meridian Holdings 🇺🇸

Gaming technology company operating across multiple international markets.

Fugazi Research on Freecast 🇺🇸

Short thesis. Provides smart guide digital interactive technology for consumers to organize various sources of online media.

The Lion’s Roar on FST 🇺🇸

Manufacturer of golf shafts.

SixSigmaCapital on Ouster 🇺🇸

Designs hardware/software that allow robots, autonomous vehicles, and smart city infrastructure to navigate the physical world safely.

D Invests on Zoetis 🇺🇸

Global animal health company.

Atai CM on BK Technologies 🇺🇸

Provides public safety grade communications products and services.

Jimmy’s Journal on Arista Networks 🇺🇸 🔒

A high-quality compounder, positioned to outperform.

Bearhold Research on Wingstop 🇺🇸

Fast casual chicken wings-focused restaurant chain.

Maaiz Khan on Barnes & Noble Education 🇺🇸

Operator of physical and virtual bookstores for college and university campuses.

Pelican Way Research on Hyliion 🇺🇸

Short thesis. Designs and develops power generators for stationary and mobile applications.

Bedrock Value on Ashford Hospitality Trust 🇺🇸

Special situation. $2.6 billion of non-recourse debt, a huge advisor termination fee with priority claim, and a stub that’s worth somewhere between zero and several times today’s price.

BioEquity Watch on Vera Therapeutics 🇺🇸

Sitting on a massive opportunity in the autoimmune kidney disease space, and we think the stock could climb 77% to hit $74.00.

Quality Value Research on Atlassian 🇺🇸

Provider of team collaboration and productivity software.

Hidden Gems Investing on Strattec Security 🇺🇸 🔒

A family business being transformed by its first professional CEO. An automotive supplier that designs and manufactures door handles, power access, keys, locks, latches and other products.

Bourseko on Reddit 🇺🇸

The most valuable data on the web.

Umibōzu Research on EquipmentShare 🇺🇸

Short thesis. Equipment rental platform servicing jobsite.

GabGrowth on Man Utd 🇺🇸

Deep dive on the Premier League football club.

Onchain Mind on Strategy 🇺🇸

Bitcoin treasury company trading under NAV.

Emerging Value on Inter & Co 🇺🇸

Brazil-based company that developed a global payments platform combining a fully digital backbone with integration with other payments platforms.

Firm Returns on Charter Communications 🇺🇸

Uncertainty around competition from new technologies and a heavy debt burden have pushed Charter's share price to its lowest level in a decade.

P14 Capital on Belden 🇺🇸

90%+ upside in a mispriced IT/OT networking leader at an inflection.

The Mikro Kap on Solitron Devices 🇺🇸 🔒

Designs and manufactures semiconductor components for the military and aerospace industry.

Warden Capital on United Parks and Resorts 🇺🇸

Owner of Seaworld, Busch Gardens and a few smaller resorts, is a very interesting high yield hard asset opportunity right now.

Kairos Research on Aimia 🇨🇦

Previously an airline rewards business that unraveled and is now converting into a permanent capital vehicle.

Nugget Capital on H&R Real Estate Investment Trust 🇨🇦

Owner, operator and developer of residential and industrial properties.

Doug Casey on Sonoro Gold 🇨🇦

A $95 million company sitting on a $340 million mine.

Europe

Welfare Capital Research on Distribution Finance Capital Holdings 🇬🇧

Specialist UK bank growing BVPS at 15% CAGR, trading at 80% of tangible book value and PE 7, repurchasing shares with ambitious targets.

Price to Tangible Bruce on Nexteq 🇬🇧

Specialist B2B technology outsourcer. Supplies the computing hardware and display systems that sit inside slot machines and industrial equipment such as broadcast panels and medical devices.

Dirt Cheap Europe on Churchill China 🇬🇧

Manufacturer of performance ceramics. Priced as a corpse, built like a survivor. 0.6x Book. Net cash. 6.5% dividend, and a 217-year-old rival that just died.

Maynard Paton on ME Group 🇬🇧

Operates, sells and services a range of instant-service vending equipment, primarily aimed at the consumer market. P/E 7, DY 8%.

Businesses Not Stocks on Headlam 🇬🇧

Short sellers, management without a track record, rubbish business... it’s all pretty bad. So why am I buying shares?

Corfe Capital on Hargreaves Services 🇬🇧

Diversified industrial services group. No debt, a 4.9% yield, and active positions on HS2, Sizewell C and the Lower Thames Crossing.

Price to Tangible Bruce on Grainger 🇬🇧

The UK’s largest listed residential landlord, owning and operating modern build-to-rent apartments in major cities across the country. 0.55x TBV for a 15% compounder with activists onboard.

The Oak Bloke on LBG Media 🇬🇧

Operates a global digital entertainment business with a focus on young adults. Single digit P/E, no net debt.

Businesses Not Stocks on Shoe Zone 🇬🇧

Omni-channel footwear retailer. Deep value play.

Goldman Won’t Cover This on Gaztransport et Technigaz SA 🇫🇷

Engineering company specialized in containment systems for the shipping and storage in cryogenic conditions of LNG.

Kubang Pasu Capital on Vusion 🇫🇷

Shareholder selling and Walmart fears have crushed the stock, but recurring revenue and European contracts may change the story.

Crack The Market on BE Semiconductor Industries 🇳🇱 🔒

The packaging monopoly at the heart of the 3D chip era.

Fluent In Quality on Cembre 🇮🇹

A maker of electrical connectors and the tools to install them. Quality compounder.

Dismissed & Asset-Backed on Emak 🇮🇹

Industrial group focused on outdoor power equipment, pumps and high-pressure water jetting, and related components & accessories. A family-controlled Italian acquisitive conglomerate at 0.81x TB.

Goldman Won’t Cover This on Kri Kri 🇬🇷

Family business, yogurt manufacture.

Boredom Baron on ATOSS Software SE 🇩🇪

A debt-free, founder-built, cash-gushing workforce-management software business.

Deep Value Stocks on Aumann AG 🇩🇪

Machine builder focused on automation solutions, including production lines for electric drivetrains and other industrial applications.

Heavy Moat Investments on innoscripta SE 🇩🇪 🔒

Specialized in cloud-based compliance software for research and development.

Boredom Baron on Heidelberger Druckmaschinen AG 🇩🇪

A 175-year-old company makes enormous metal machines that put ink on paper.

Tactile Fund on UIE Plc 🇩🇰

A 48% shareholder in one of the world’s largest, most profitable, and most environmentally friendly palm oil producers, United Plantations Berhad.

Global Outperformers on Investment AB Latour 🇸🇪 🔒

An industrial conglomerate, part family office and part serial acquirer.

Toni on Rex Concepts SA 🇵🇱

Restaurant operator who owns the exclusive rights to operate Popeyes and Burger King Re

Asia

Value & Opportunity on Tokio Marine 🇯🇵

Insurance business, Berkshire’s newest holding.

Kubang Pasu Capital on China Beststudy Education 🇭🇰 🔒

Provides educational services. Debt-free, 36% ROE compounder growing 50%+ a year, trading at 3x EBITDA after a 40% fall.

TheCatalyst on Pinduoduo 🇭🇰

Owns and operates a portfolio of e-commerce businesses.

Numbers not Narrative on Dongsung FineTec 🇰🇷

A cryogenic-insulation maker trading at under 9× earnings, with a 25% ROE, net cash, and three years of revenue already signed.

Tiger Thesis on Selamat Sempurna 🇮🇩

Manufactures both automotive and industrial filtration products.

ROW

Quipus Capital on Alpargatas 🇧🇷 🔒

Footwear manufacturing company owns Havaianas, the largest flip-flop brand in Brazil.

Thanks for reading.

Come say hello on X and LinkedIn

Disclaimer

This article is for informational and educational purposes only, and should not be seen as investment advice. Please do your own research before investing in any company mentioned.

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Latest interviews with fund managers/investors sharing their best ideas…

#135 - David Ridland (Castlebay Investment Partners) 📗

#134 - Patrick Rial (TriVista Capital/Hosomichi Fund) 📗

#133 - Lee Roach (The Value Road) 📗

BEST IDEA AWARD FOR THIS ISSUE 🏆

European Stock Picks on Obrascon Huarte Lain SA

A deep value turnaround hiding in the global infrastructure boom.

A Spanish construction and civil engineering company, mainly involved in infrastructure and commercial property construction and the operation of concessions.

Trophy asset in the center of Madrid could wipe out the entirety of its (very costly) debt.

Trading at a severe discount relative to its peer group, the stock offers a highly conservative path to double from current levels.

A round-up of the best ‘fresh-off-the-press’ stock pitches…

Read more

(Disclaimer: This interview is for informational and educational purposes only, and should not be seen as investment advice. Please do your own research before investing in any company mentioned).

Hi David, We last spoke in 2021, a lot has happened since then. Have you made any tweaks or changes to your investment approach or style?

Jeff Bezos was once asked what he thought would change in the next ten years. He said the more interesting question is what stays the same!

For us, in investing, the answer is straightforward: Quality, value - in that order. We don’t want to overpay for the privilege of owning a great business; and we won’t get in the way of the compounding returns those businesses make for us over time.

That principle hasn’t changed since we launched the fund. Having said that, we are always trying to get better and evolve. We’ve never been comfortable standing still analytically.

Over the last few years having developed an analytical database, called Wayfinder, we have sought to enhance its capabilities. Recently, we have developed our Fund Intelligence Dashboard, the greatest benefit of which is to maximise our ‘thinking time’ through efficiently gathering and analysing the critical factors underpinning our investment theses.

One of the most important developments to our analytical toolkit has been what we call cashflow lifecycle analysis. The insight is deceptively simple: the right capital allocation behaviour looks very different depending on where a business sits in its lifecycle; and the market is often slow to notice when management gets this wrong.

A young, high-growth business should be reinvesting aggressively its free cashflow back into the business. We expect capital intensity to be higher than at other stages and we understand that. However, a mature business that has passed its peak growth phase should be doing something very different: harvesting returns, generating cash and returning it to shareholders.

When we see a mature company chasing growth — acquiring at inflated prices, building capacity into a saturated market, leveraging up to fund expansion — that’s a significant warning signal. The market tends to reward the activity initially, because growth is instinctively appealing. We’ve learned to be sceptical of it.

What cashflow lifecycle analysis gives us is a systematic framework for identifying these behavioural mismatches early — before their effects are felt in reported earnings and hopefully before the share price responds.

A management team allocating capital well through the lifecycle of their business is creating shareholder value quietly and consistently. Yet, through the wrong incentive structures, management can destroy value, often whilst appearing to grow earnings in the short term.

The two systems work together. The valuation discipline of Wayfinder sits alongside the quality surveillance and lifecycle analysis of the Dashboard.

Between them they answer the questions that matter most: is this still the business we thought it was, is management stewarding capital the way we’d expect at this point in the lifecycle and are we still paying a sensible price?

The average free cash flow yield for your fund is 6%, and the dividend yield 4%. I was quite surprised to read that. Is this the highest they’ve been since you launched the fund?

Yes. And the surprise you feel reading those numbers is, I think, the right reaction.

Look at the valuation graph below. The red valuation line hit the extreme valuation point (the lower dotted red line), at the end of March this year. That’s when the free cashflow yield hit 6%. It often seems to us that valuation means less ‘in the middle’. It is at the extremes when it most impacts future returns.

Our average return on equity is 35% — more than double the market average. Our operating margins are 24% against 17% for the broader market. These are not ordinary businesses. They generate cash with a kind of efficiency that most companies never achieve; and the market is currently pricing that cash as if it were unremarkable.

To your question about whether this is a record - yes it is. When we launched our fund in January 2015, quality compounders were in vogue and you paid a premium to own them. It took us five years to become fully invested in the fund as we didn’t want to overpay for these quality companies.

Over recent years, the narrative has shifted. Investors have rotated toward lower quality companies — toward cyclicals, commodity producers, financials. The businesses we own, which compound quietly and consistently, are sitting in the waiting room while noisier assets attract the crowd.

“A 6% free cash flow yield on businesses with a 35% return on equity. The market is pricing these compounders as if the compounding will stop. We don’t think it will.”

The dividend yield tells a similar story. 4% from a portfolio of quality growth businesses is rare. These companies pay dividends from genuine surplus cash — after reinvesting in the business, after maintaining the balance sheet, after funding organic growth. That’s a very different 4% from a company paying out more than it earns.

Perhaps things are changing though? From the end of March, as of writing, our fund has risen by 10% - outperforming our peers and the market by some margin. Whilst the free cashflow yield has fallen to 5.6% and the dividend yield to 3.7%, strong operating results from our companies have helped maintain these compelling valuations.

In short, valuations are still at the extreme, all while our companies continue to deliver double digit earnings and cashflow growth. (11% annualised earnings growth over the last 5 and 10 years.)

What two stocks are you sharing with readers today?

Read more

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Latest interviews with fund managers sharing their best ideas…

#134 - Patrick Rial (TriVista Capital/Hosomichi Fund) 📗

#133 - Lee Roach (The Value Road) 📗

#132 - Anthony Fruci (Halvio Capital) 📗

BEST IDEA AWARD FOR THIS ISSUE 🏆

Miller Value Funds on Bloomin’ Brands 🇺🇸

BLMN owns a portfolio of established casual dining brands and is executing a management-led transformation aimed at restoring traffic, margins, and brand relevance, yet the shares continue to trade at a compelling valuation on an under-earning asset base. 

A round-up of the best ‘fresh-off-the-press’ stock pitches…

Read more

Patrick discusses his background, approach to investing, and shares two stock ideas.

(Disclaimer: This interview is for informational and educational purposes only, and should not be seen as investment advice. Please do your own research before investing in any company mentioned).

Hi Patrick, thanks so much for taking the time to do this interview.

Can you please tell readers about your background, and how you got involved in investing?

Hi Jon. Thanks so much for this opportunity. I am a big fan of Capital Employed and have discovered a number of interesting Japanese stocks here.

I am an American but have been living in Japan for 23 years. My original goal was to be a journalist; I fancied myself the next Malcom Gladwell and dreamed of writing for The New Yorker. Unfortunately, I graduated in the early 2000s, just as print journalism embarked on a never-ending structural decline.

I couldn’t find a job in journalism, so I came to Japan to work as an English teacher on the premise that if I waited a year maybe the Internet would disappear and the industry would come roaring back. I am still waiting for this thesis to play out!

My interest in Japan dates back to my obsession with the Karate Kid movies. In the early 2000s I even tracked down Ralph Macchio and went to his home on Long Island. He was not happy about that! But he did take a photo with me and sign my VHS tape if I promised never to come back.

“Best Wishes! - Ralph Macchio ‘01”

I started doing karate, taekwondo and kung fu in high school and college, and so always had a strong interest in Asia, and Japan in particular. When I arrived in Japan, I was surprised to learn karate is just as dorky here as it is in the U.S. So, I hung up my gi and took up rock climbing instead.

Still, I fell in love with Japan and decided to stay. I started working as a freelance journalist, but it wasn’t sustainable. I ran through my savings and had to ration myself to a single daily visit to the convenience store for food.

I landed a job as a reporter at Bloomberg just in the nick of time. I remember they apologized for the “low” salary offer of $50k, not knowing I would have said “yes” if they offered me a day-old taco.

Bloomberg exposed me to investing. Your readers already know that investing is the most fascinating, endlessly-permutating puzzle out there. I was hooked.

At some point, I realized I was not getting any closer to writing for The New Yorker. And anyways, finance had become more interesting. When I grumbled about my situation to a friend at Morgan Stanley, he offered me a job. I became a product manager, where I used my experience as a journalist to help analysts write reports that stand out in a crowded field.

Morgan Stanley was the platonic ideal of a company: intelligent, high-quality people working in cooperation towards a common goal, and having a lot of fun along the way. I couldn’t have asked for a better environment.

However, as I studied Graham, Buffett and others, my goal changed to becoming part of the decision-making on the buy side, rather than the advisory side. That meant I first needed to learn how to be an analyst.

I’d met the head of research at J.P. Morgan during my journalism days, and when I reached out, he offered me a job as his junior analyst. I covered macro strategy and small cap research.

Ironically, my years doing macro strategy helped cure me of trying to predict the macro; there are too many moving parts for the human mind to comprehend, in my view.

Small cap stocks were the polar opposite. They are easy to understand, and the likelihood of mispricing is inversely proportional to the number of eyeballs on the companies. Japan is blessed with nearly 3000 listed small caps to choose from.

The day after my mentor quit J.P. Morgan, I received an email from the founder of Varecs Partners, whom I had met a few months earlier. I joined Varecs, a value-oriented boutique fund influenced by First Eagle and Buffett, as an analyst in 2015.

I spent the next 10 years honing my skills researching overlooked Japanese companies. Being an analyst is nearly identical to being a journalist, with just a bit more math.

We had a lot of fun at Varecs digging up hidden gems. However, I left at the end of 2025 to pursue my dream of becoming a fund manager.

Maybe it is worth noting for some of your younger readers, I have not formally interviewed for a job in 20 years. My network of friends and colleagues have been the source of every new opportunity.

One of the best things you can do for your career is to be a team player, help others, and make friends. I had a strong competitive drive when I started out, a vestige of my Western upbringing. But I have found you are better off trying to be helpful than trying to come out on top.

You will be shocked by how coworkers and others you meet when you are young start to rise to positions of influence. If you treated them well, they may lend you a hand later on. Your former intern may become a CEO or a country head. I’ve seen it happen many times.

Can you provide readers with a brief overview of the Hosomichi Fund?

The Hosomichi Fund is in pre-launch phase and expected to start in September. I am partnered with the excellent folks at TriVista Capital in Tokyo and will launch under their umbrella. This setup frees me to focus the maximum amount of time on running the fund, and minimal time on operations.

The strategy is small cap, constructivist and focused primarily on people. We eschew the typical screening approach. We believe that the quality and drive of the people running the company, combined with the culture they create, ultimately determines your return.

The industry and “moat” are secondary, in my opinion. I am skeptical of the very concept of “moats” as distinct from the people working at the company.

Outsized returns are hard to come by, but I am focused on 2 winning patterns I have identified:

Source: TriVista Capital

Exceptional returns can be found investing in both the lowest and highest quality management teams.

Companies managed by lower quality teams trade at depressed multiples. Intervention by an engaged shareholder can catalyze improved performance on multiple fronts: balance sheet management, employee motivation, sales growth and innovation.

That can result in a significant re-rating. Of course, most management teams are not enthused about breaking with old patterns. We always approach the company in a friendly manner, but friendship is a two-way street. At the end of the day, we will take measures to safeguard investor capital.

Meanwhile, the highest quality management teams also tend to be structurally undervalued, even if they trade at comparable multiples to peers. The best managers will grow faster, attract better talent, and treat shareholders better than rivals.

They thus deserve to trade at a premium. While such managers are exceptional operators, in Japan they tend to be somewhat ignorant of capital markets. Our approach is to work with these companies to set ambitious financial goals, devise M&A strategy, and help tell their story to investors.

What two stocks are you sharing with readers today?

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Temairazu provides software used by hotels and ryokan to manage room inventory and prices across multiple booking channels from one screen. Those channels include online travel agencies such as Rakuten Travel, Jalan, and Booking.com, as well as the property's own website.

The product matters because it sits inside the hotel's daily sales process. Once a property uses TEMAIRAZU to manage many booking channels, switching systems would create operational risk. That keeps churn low and lets new customer additions build on the existing revenue base.

Buybacks are running out of room; the next step could be a special dividend with up to a 20% yield.

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Lee discusses his approach to investing, and shares two microcap stock ideas.

(Disclaimer: This interview is for informational and educational purposes only, and should not be seen as investment advice. Please do your own research before investing in any company mentioned).

Hi Lee, thanks so much for taking the time to do this interview.

Can you please tell readers about your background, and how you got involved in investing?

Absolutely, I began investing because I worked in an industrial manufacturing facility. When you work at a “shop” it becomes very evident that nobody around you can afford to retire.

Most people around me couldn’t afford to buy a house and most (if they’re lucky) lived in trailer parks with lot rents that are now as high as $700 a month.

It was very evident my future was going to be bleak if I could not figure out how to supplement my income. I really thought about what I wanted to do and I began trying to learn about economic history in an attempt to understand current global economics and how I fit into that picture.

When you do this, it becomes pretty obvious that tipping your toes into the market was a must. I was already reading about old economies so I picked up some Ben Graham and Philip A. Fisher, other stuff and began trying to learn.

I began writing on Seeking Alpha, not even as a side hustle but as an attempt to have to focus my thoughts on the companies I was researching as well as a way to get some feedback from the investor community as to what I lacked. Slowly but surely I kind of evolved into what my current investment approach is today.

As I began writing about companies with smaller and smaller market caps, I moved mover to writing on Substack because Seeking Alpha kind of wants to limit write ups on sub $50M market cap companies. That’s why I started The Value Road.

Can you provide readers with a brief overview of your investment style and strategy?

My strategy is based on looking primarily at a couple of things. How much is the company worth in the event of a sale?

There’s three ways to kind of home in on that. You can obviously start with the P/B. NAV, and NCAV figures. These will give you a rough estimate of how much that company may be worth.

Next, if the company you’re looking into has a lot of hard assets like land and buildings, then the value of that property may very well be understated on the company’s balance sheet.

This is because that property has to be carried at cost less depreciation. In most of the country however, the value of buildings generally increase as they get older because replacement costs aren’t going down.

You can start assessing what the actual value of this property might be by first looking into the tax assessed value of this land. Most counties have portals to this information.

The most accurate and up to date way to finally assess the value of a company’s property is by comparing that property to other similar properties. You’ll look into what those properties have sold for in the past and what those similar properties are going for now.

Once all of this has been done you should have a pretty good idea on the range of values this company’s assets could sell for despite how the actual business operates. That’s margin of safety #1.

Margin of safety #2 is to compare the business’s P/S. EV/S, EBITDA/S, and these types of figures to other similar companies.

What is the market pricing them in at? After whatever negative catalyst has ran its course or after a management team has successfully completed an operational turn around, the market will often revert the share price back closer to those peer comparison ratios.

Should the company decide to sell off its operations to a peer, those buyers will often pay a price much closer to those comparable valuations peers hold vs a largely depressed Market Cap value.

If the company is priced below asset value and well below your peer comparisons, the last thing we need to look for is a catalyst to rerate the stock.

If the company has been spending a lot on launching a new product or service, it might be about to experience a margin boost as these expenses are about to disappear for the company’s income and cashflow statements.

Does the company have a large debt due and needs to sell off assets to pay down this debt? This makes investors nervous and crashes the price, but when a company has assets to sell and needs to come up with money, they usually do that.

Once the worst of the negative catalyst has come to pass and the business comes out of it more stable with less debt, the market usually rerates it.

What two stocks would you like to share with readers?

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Aerospace aftermarket compounder mispriced on M&A. ~60% upside to ~$275 by YE 2028 as PAG drives EBITDA step-change to ~$500M.

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Anthony discusses his approach to investing, and shares two microcap stock ideas.

(Disclaimer: This interview is for informational and educational purposes only, and should not be seen as investment advice. Please do your own research before investing in any company mentioned).

Hi Anthony, thanks so much for taking the time to do this interview.

Can you provide readers with a brief overview of Halvio Capital?

Thanks for having me here. Right now it’s just some managed accounts for family members as of April 1, 2025. I generally don’t like boxing my strategy or style because every situation is different but for the most part I have a certain style I stick to. But I am willing to be flexible in certain circumstances if the price is right.

Everyone is going to have an investing style that suits their personality and certain ideas they are drawn to. I think I heard Jared Kushner tell a story once that he was asking Ray Dalio how he should figure out his investing strategy and Ray Dalio said that when you read investment write ups, write down the things that resonate with you.

And over time those things that have resonated with me are: profitability, downside protection, a management team that is good or at least doesn’t waste shareholder capital for the most part and usually cheap multiples.

I just can’t bring myself to pay over certain multiples because I know what I don’t know and for sure can’t predict the future better than most.

Using the above criteria has usually resulted in me investing in little niche, established businesses that the market doesn’t care about or can’t access due to liquidity constraints or are just overlooked.

I don’t have a business preference, as long as there is some profitability and I’m confident that the competitive nature of the business allows the profits to continue into the future.

Another area I like to look at is special situations. These can be spinoffs, capital return plans, coat tailing activists and liquidations. Situations that shouldn’t correlate with the market.

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QDEL is a healthcare diagnostics tools company focused on routine blood testing, primarily at hospitals and central labs, and point-of-care (POC) respiratory testing. 

Its business is a razor/razor blade model, where machines are sold or leased up front for minimal cost (i.e., “the razor”), and then customers commit to purchase consumables at high gross margins (the “razor blades). ~95% of sales are consumables. 

The basic pitch is that QDEL is a growing, stable business where one large issue, the end of the COVID pandemic, has collided with a series of smaller, largely one-time problems to create a significant mispricing. 

To put the opportunity in perspective, I think QDEL can earn ~$4 in 2028 FCF/sh. with 2-3x net leverage. Comparable companies such as Siemens Healthineers, ABT, Roche, and DHR all trade >20x P/E. QDEL is presently trading $11. We can debate multiples, but QDEL shares represent significant value if the business can return to steady growth. 

A 20x multiple would yield $80.

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Wengang discusses his background, launching Trigam Partners, his approach to investing, and shares two stock ideas.

(Disclaimer: This interview is for informational and educational purposes only, and should not be seen as investment advice. Please do your own research before investing in any company mentioned).

Hi Wengang, thanks so much for taking the time to do this interview.

Can you please tell readers about your background, and how you got involved in investing?

Hi Jon, I really appreciate the opportunity and am honored you asked me to be a part of this.

Thanks so much for taking the time to do this interview.

Can you please tell readers about your background, and how you got involved in investing?

I was born in China, grew up in Singapore, and moved to the United States in 2008. I bought my first stock in 2003 while I was a junior in college — roughly ten years later than Warren Buffett, which I suppose means I started with a permanent handicap on the compound-interest scoreboard.

Very early on, I knew investing was what I wanted to do. To me, investing always felt like a giant intellectual scavenger hunt: searching through fragments of information, connecting dots others overlook, and occasionally finding something hiding in plain sight.

What attracted me most was that the scorecard is ultimately objective. Markets may disagree with you for a while, but eventually results matter more than opinions, politics, or popularity.

I studied Computer Science with a minor in Mathematics, which probably shaped how I think about the world. I have always been more comfortable being rational than fashionable, and more interested in being correct than being part of the majority.

That definitely did not make me the most popular person growing up, but in investing, being comfortable standing apart from the crowd is often an advantage rather than a liability.

Over time, I realized that many great investments come from places where consensus is either absent or emotionally uncomfortable. Temperament, more than IQ, is probably the rarest asset in markets.

Can you provide readers with a brief overview of Trigram Partners?

Trigram Partners was really born long before the paperwork existed. From around 2016, after years of wandering through different investment theories and market fashions, I finally arrived at the Graham-and-Buffett school of investing.

The more I studied markets, the more I realized that while investing can be intellectually complex, the underlying principles are surprisingly simple: buy understandable assets at sensible prices, insist on a margin of safety, and let compounding do the heavy lifting over time.

In 2017, I began managing money for friends and family under a structure that was intentionally aligned with investors: 0% management fee and 20% performance allocation above a 6% hurdle. I later formed a small LLC to manage those accounts, which eventually became the predecessor to Trigram Partners.

In 2023, I decided to formalize the structure and established Trigram Partners as the general partner to what would later become Trigram Fund LP. The fund itself was formally launched in 2025, although the initial capital largely came from separately managed accounts that had compounded together for years.

Structuring the launch as a contribution-in-kind of securities allowed long-time investors to defer capital gains taxes — a practical reminder that tax efficiency, like investing itself, benefits enormously from patience and long-term thinking.

Today, Trigram Fund LP remains my one and only investment partnership. We do not charge a management fee. Instead, we earn 25% of profits above a 6% absolute, annually compounded hurdle rate. Sharp-eyed readers will recognize that this arrangement bears more than a passing resemblance to the early Buffett Partnerships. That resemblance is intentional.

Our investment approach is also heavily influenced by Buffett Partnership-era thinking. Broadly speaking, we operate through two categories. The first is what Buffett once called “Generals” — undervalued securities where price and intrinsic value have diverged meaningfully.

The second is “Specials” — selective arbitrage and special-situation opportunities that occasionally arise when markets become temporarily inefficient.

Risk control is central to everything we do. Because essentially all of my after-tax liquid net worth sits alongside our partners inside Trigram Fund, I think about downside risk constantly.

We use no leverage at the fund level and avoid the kind of highly leveraged arbitrage strategies that have historically destroyed otherwise brilliant firms. Margin of safety is not a slogan for us; it is a survival requirement.

Ironically, despite following a fairly old-fashioned investment philosophy and largely avoiding areas where I cannot confidently predict long-term economics — particularly much of the technology and AI landscape — the fund’s performance from 2022 through the first quarter of 2026 has averaged slightly above 40% annually before incentive allocations. Fortunately, our partners do not seem to mind the absence of fashionable narratives.

What two stocks would you like to share with readers?

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