Welcome to another edition of the Capital Employed Newsletter.
This edition features some absolutely cracking stock pitches - from microcap special situations in the US to Japanese ship building companies trading well under their true NAV.
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Latest interviews with fund managers/private investors sharing their best ideas…
#138 - Seb Krog (Treasure Hunting) 📗
#137 - Colin King (Value Don’t Lie) 📗
#136 - Dan Rupp (Parkway Capital) 📗
BEST IDEA AWARD FOR THIS ISSUE 🏆
Arborator Capital Research on Po Valley Energy 🇦🇺
Po Valley Energy is a profitable Italian gas producer that sells all of its production with no hedging, so Europe’s current gas squeeze goes straight into its bank account: at today’s prices, a single well generates ~17% FCF yield on the market cap annually.
Meanwhile, management is permitting four new wells that could lift production 4–5x by 2030, funded from the company’s own cash and tied into infrastructure that already exists. On top of that, the market gives no value to a huge offshore field PVE owns, or to a new 3D seismic survey with results due in the coming months.
The CEO owns a quarter of the company, takes a modest salary, has no options, and has told us his plan is to de-risk the assets, sell them and return the money to shareholders.
European gas is up about 150% from a year ago. The stock has barely reacted. We think 5x+ upside is possible in the bull case.A round-up of the best ‘fresh-off-the-press’ stock pitches…