| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Cove Street Capital's February 2026 letter addresses the AI-driven market disruption affecting software stocks and broader financial markets. Manager Jeffrey Bronchick argues that while AI represents a significant technological advancement, the market's reaction has been excessive, creating opportunities in quality software companies with strong margins and cash flows that have been indiscriminately sold. The fund has positioned itself in companies like Clarivate, making it their second-largest holding after AI fears drove down valuations despite solid fundamentals. Bronchick expresses concern about systemic risks in private credit markets, where over 20% of funds hold software loans amid liquidity constraints. He also warns about potential Federal Reserve policy changes under new leadership that could disrupt years of accommodative monetary policy. The manager emphasizes focusing on fundamental analysis rather than trying to time market rotations, believing that current market messiness will create investment opportunities for patient capital. The portfolio maintains roughly 12.5% exposure to software names positioned for recovery as AI fears subside.
AI disruption is creating indiscriminate selling in software stocks, presenting value opportunities in quality companies with strong fundamentals that have been unfairly punished by market fears about technological obsolescence.
The manager expects continued messiness in markets which creates investment opportunities, particularly in software companies that have been unfairly punished by AI fears. While acknowledging uncertainty about future market sentiment toward various factors like large vs small cap and value vs growth, the focus remains on fundamental work rather than trying to time market rotations.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Mar 4 2026 | 2025 Q4 | AMZN, CLVT, CSCO, MA, MSFT, SAP, V | AI, liquidity, private credit, small caps, software, technology, value | - | AI disruption has created indiscriminate selling in software stocks, presenting value opportunities in quality companies with strong fundamentals. Cove Street Capital has positioned in names like Clarivate while warning of systemic risks in private credit markets and potential Fed policy changes. The manager focuses on fundamental work over market timing, believing current messiness creates opportunities. |
| Nov 5 2025 | 2025 Q3 | FMC | AI, contrarian, Credit Stress, risk management, small caps, value | - | CSC warns of systemic private credit risks and AI concentration while delivering strong performance through contrarian value investing in smaller caps. Manager focuses on undervalued companies with management changes in healthcare, materials, and defense while avoiding overvalued large-cap themes. Expects market correction when elevated valuations face reality of counterparty mistrust and deteriorating fundamentals. |
| Sep 3 2025 | 2025 Q2 | FUN, VSAT | credit, crypto, Fed policy, integration, small caps, Speculation, Theme Parks, value |
FUN VSAT FUN |
Cove Street maintains small-cap value focus amid widespread market speculation in crypto, SPACs, and credit. Key holding Six Flags offers significant upside through asset sales and integration improvements post-Cedar Fair merger. While acknowledging overvalued markets and credit excess, the fund continues finding undervalued opportunities in Aerospace, Defense, and Agricultural Chemicals with competent management teams. |
| Jun 16 2025 | 2025 Q1 | AAP, ANGI, ATRO, CMP, ECVT, IIIV | defense, Fed policy, small caps, tariffs, Trade Policy, value | - | Bronchick blasts tariff policies as economically destructive while maintaining disciplined value approach in small-cap space. Portfolio up single digits YTD with strong defense exposure via Astronics. Sees opportunity in continued institutional neglect of micro-mid cap names. Advocates Fed stability over rate cuts. Core thesis unchanged: buy quality businesses at attractive prices during market volatility. |
| Mar 2 2025 | 2024 Q4 | DLH, HNRG, KBR, LGTY, TH | activism, AI, credit, defense, Government, small caps, technology, value |
KBR LGTY |
Small cap value manager emphasizes active engagement to unlock value in overlooked companies while navigating political uncertainty and elevated market valuations. Successfully monetized Logility through governance advocacy and benefits from Hallador Energy's coal-power transition. Maintains skepticism toward AI hype and caution around government contractors amid spending reduction fears. Sees compressed credit spreads as concerning risk signal. |
| Sep 30 2024 | 2024 Q3 | CLMB, CMP, GBLI, IAC, OUT, RDVT, RSSS, SSP, TIPT, VSAT | Advertising, Balance Sheet, Data Services, small caps, turnaround, value |
OUT CLMB RDVT |
Cove Street's small-cap value fund underperformed with -5.98% YTD returns but maintains conviction in unloved, cheap stocks with asset support. Key holdings face balance sheet concerns but show turnaround potential. Outfront Media recovered via ad market rebound, while Climb Global and Red Violet delivered strong growth. Manager sees catalysts ahead in historically successful setup. |
| Jun 30 2024 | 2024 Q2 | AAP, AVD, CLMB, CLVT, CMP, ECVT, IAC, KBR, LFCR, LGF.B, NEU, RDVT, RSSS, SIX, SSP, SXI, VSAT | Auto Parts, Concentration, Data Services, small cap, turnaround, value |
SSP CMP VSAT KBR AAP CLVT RDVT |
Cove Street's small cap value fund suffered -10.77% quarterly returns but manager sees tremendous opportunities amid historic small cap underperformance. Portfolio concentrated in undervalued names with significant intrinsic value discounts. Added data services positions in Clarivate and Red Violet, plus turnaround play Advanced Auto Parts. Manager adding personal capital demonstrates conviction in tightly coiled value opportunities. |
| Apr 15 2024 | 2024 Q1 | CLMB, CMP, DCO, GLDD, HNRG, LFCR, LTRPA, OUT, PKE, RDVT, SSP, TBRG, TRI, TRU, VSAT, WMT | aerospace, healthcare, Media, small caps, technology, value |
PKE TBRG RDVT |
Cove Street's small cap value fund lagged in Q1 as larger holdings declined while smaller positions gained. Liberty TripAdvisor was the standout performer on takeover interest. New aerospace and healthcare IT positions added. Manager sees abundant opportunities in neglected small cap value space with limited competition for capital, expecting strong relative performance ahead from compressed valuations and emerging catalysts. |
| Aug 1 2024 | 2023 Q4 | AVD, CJREF, CNX, DLHC, HNGR, LFCR, LTRPA, OUT, SSP, VSAT, VTS | Agriculture, concentrated, energy, Media, small cap, Travel, value | - | Cove Street delivered 18% returns in 2023 through concentrated small cap value investing, adding aggressively to media and billboard positions while maintaining energy exposure based on sticky carbon demand thesis. New agricultural chemicals position capitalizes on inventory cycle trough. Manager emphasizes fundamental analysis over macro predictions, viewing limited institutional interest as future performance catalyst. |
| Oct 10 2023 | 2023 Q3 | AMSWA, ANGI, CCF, CNX, CVLT, DLHC, ECVT, HCCI, HNRG, IAC, LFCR, MGM, SSP, VMD, VSAT | Concentration, cybersecurity, energy, healthcare, Media, small caps, value |
VSAT IAC SSP DLHC AMSWA |
Concentrated small cap value fund navigated challenging Q3 with satellite failures and cyber-attacks hitting key holdings. Manager aggressively added to media positions during weakness while energy holdings outperformed. Rising rates create headwinds but abundant opportunities exist in unloved small caps. Fund maintains conviction in concentrated approach despite short-term volatility. |
| Dec 7 2023 | 2023 Q2 | AAP, ALC, ANGI, AZO, DCO, DELL, GBLI, GLDD, IAC, LFCR, LTRPA, MGM, MPAA, ORLY, SCWX, SNEX, SSP, TRIP, VSAT | aerospace, Concentration, infrastructure, Media, small cap, technology, value | - | Strong Q2 performance driven by concentrated small-cap value positions with specific catalysts. Viasat satellite launch and Inmarsat acquisition position company for significant cashflow generation. Portfolio benefits from infrastructure spending recovery and operational improvements at media holdings. Despite macro concerns around inflation and credit stress, manager sees sufficient margin of safety and stock-specific drivers for continued outperformance. |
| Mar 31 2023 | 2023 Q1 | CLMB, CMP, ECVT, GLDD, GMED, HNRG, LFCR, LGF/B, NUVA, SSP, TIGO, VMD | - | - | |
| Jan 13 2023 | 2022 Q4 | AVID, CLMB, HRG, IAC, IEHC, LFCR, LTRPA, SKX, UFPT, VMD | - | - | |
| Sep 30 2022 | 2022 Q3 | AZZ, CARG, CMP, ECVT, GBLI, HCCI, LGF/A, VSAT, WSTG | - | - | |
| Jun 30 2022 | 2022 Q2 | BKEP, CMP, HNRG, INFU, LGF/B, VSAT, WTM | - | - | |
| Apr 30 2022 | 2022 Q1 | AZZ, CFX, ECVT, SCWX | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI infrastructure plays dominated 2025 returns, with 65% of Russell 2000's return coming from AI infrastructure. The manager views this as a concentrated, singular bet on CAPEX spending by five companies building data centers. Questions the sustainability of this theme given its concentration and speculative nature. |
Infrastructure Data Centers CAPEX Concentration |
Small CapsSmall cap performance was dominated by AI infrastructure plays and speculative unprofitable companies in 2025. The manager notes extreme bifurcation between unprofitable stocks and quality stocks, with quality businesses trading at historically cheap multiples despite the overall market concentration. |
Russell 2000 Quality Valuation Bifurcation | |
ValueValuation disparities between winners and losers have reached historic extremes. Quality businesses today trade at historically cheap multiples, creating opportunities for active managers who focus on earnings-driven stock selection rather than following speculative trends. |
Quality Multiples Disparity Earnings | |
| 2025 Q3 |
Private CreditManager warns of massive dollars flowing into private assets, particularly private debt, overwhelming proper credit analysis capabilities. Cites specific credit market debacles and notes PIK income up 30% year-to-date, suggesting deteriorating credit quality and potential systemic risks. |
Credit Leverage Risk Banking Debt |
AIInvestment in information processing equipment and software represents 4% of GDP but accounts for 92% of GDP growth in first half of year. Manager notes the mad rush for AI-labeled investments and warns against concentrated exposure to single themes reminiscent of dot-com era. |
Technology Growth Bubble Valuation Theme | |
ValueManager emphasizes finding very cheap stocks that over-discount present problems and solid business models at reasonable prices that can compound. Focuses on smaller-cap opportunities in healthcare, billboards, ag-chem, defense and aerospace with management changes and capital allocation improvements. |
Undervalued Compounding Contrarian Opportunity Quality | |
| 2025 Q2 |
CryptoBitcoin has reached $2 trillion market cap with Ethereum at $450 billion. President Trump authorized Strategic Bitcoin Reserve and U.S. Digital Asset Stockpile, making crypto an institutional asset class. However, companies issuing debt at 2x asset values for crypto treasury strategies shows speculative excess. |
Bitcoin Ethereum Digital Assets Treasury Strategy Institutional |
Theme ParksSix Flags and Cedar Fair merged creating integration challenges between two poorly managed companies. The business model remains solid with high margins and returns, but current management execution is poor. Asset sales potential exceeds $500 million with minimal earnings impact. |
Six Flags Cedar Fair Integration Asset Sales EBITDA | |
SPACsSPACs have returned as part of the ongoing cycle of market ridiculousness and speculative excess. The blind acceptance of Continuation Fund pitches represents another example of fruitless investor behavior patterns repeating. |
Continuation Funds Speculation Market Cycles | |
Private CreditRecord junk debt issuance occurred at the tightest spreads ever seen. Apollo, Blackrock, KKR, and Blue Owl continue raising capital with impunity, showing credit market exuberance despite potential risks. |
Junk Debt Credit Spreads Alternative Managers | |
| 2025 Q1 |
Trade PolicyManager expresses strong criticism of current tariff policies, viewing them as economically harmful and creating business uncertainty. Cites GM CFO noting companies cannot spend billions whipsawing business back and forth due to tariff uncertainty, leading to economic halt. |
Tariffs Protectionism Trade Uncertainty Policy |
Small CapsPortfolio focuses on micro to mid-cap space with distinct lack of interest and dollar flow creating opportunity. Manager notes potential for non-US investing to be hot in 2025 after decade of malaise, suggesting anything is possible in small-cap space. |
Micro Mid-cap Opportunity Underperformers Valuation | |
DefenseManager continues to like tailwinds in aerospace and defense sector, specifically noting good performance in Astronics holdings. This represents a positive sector view amid broader market uncertainty. |
Aerospace Defense Tailwinds Astronics | |
| 2024 Q4 |
AIManager expresses skepticism about AI investment hype, comparing it to previous tech bubbles. Notes massive capital expenditure with uncertain economics and questions whether AI represents revolutionary change or just another PR exercise. Sees AI as helpful tool but doubts transformative investment impact. |
Data Centers Cloud Semiconductors Software Automation |
Defense SpendingDiscusses government contractor positions including KBR Inc and DLH Corp in context of potential DOGE spending cuts. Notes opportunities in defense/space service providers but emphasizes need to be reactive to government spending changes and policy shifts. |
Government IT Defense Services Space Defense Logistics Aerospace | |
Small CapsEmphasizes small cap investing as area with enormous absolute and relative opportunity for intelligently sized capital. Notes sector remains mostly bereft of new funding with occasional insane stock moves. Highlights active engagement approach versus diversified value portfolios. |
Value Quality Growth Activism Concentration | |
Credit StressDiscusses concerning credit market dynamics including Liability Management Exercises, large distressed debt funds, and assets passing between same financial players. Notes non-investment grade spreads at 285 basis points, half the 25-year average, suggesting compressed risk premiums. |
Private Credit Distressed Leverage Spreads Risk Appetite | |
| 2024 Q3 |
ValueThe fund focuses on small-cap value stocks that are unloved by the market, holding positions they describe as stupid cheap with real asset support. The manager emphasizes that public small-cap equity remains an unloved asset class with few players, which has historically been a setup for future success. |
Value Small Caps Unloved Cheap Asset Support |
AdvertisingOutfront Media operates billboards and transit advertising displays structured as a REIT. The subsequent ad market recovery in 2024, particularly in local advertising and the transit business, has helped performance. The company is converting static billboards to higher-yielding digital displays. |
Billboards Transit Digital Local Recovery | |
Data ServicesRed Violet focuses on being an arms dealer of personal identity data that powers various data service solutions for financial/corporate, real estate, collections, investigative, and retail end-markets. The company reported 30% revenue growth and 36% AEBITDA margins. |
Identity Data Collections Financial Real Estate Growth | |
| 2024 Q2 |
ValueManager emphasizes tremendous specific opportunities in undervalued small cap stocks where the spring is very tightly coiled between intrinsic value estimates and current prices. Portfolio concentrated in best ideas with stocks trading at significant discounts to estimated intrinsic value. |
Undervalued Intrinsic Value Discount Mispriced Cheap |
Data ServicesAdded positions in Clarivate and Red Violet, both data services companies. Clarivate aggregates academic research and IP data, while Red Violet provides personal identity data services. Both benefit from network effects and high margins from fixed cost data assets. |
Data Aggregation Identity Data Network Effects High Margins | |
Auto AftermarketNew position in Advanced Auto Parts as the third wheel in a profitable industry dominated by Autozone and O'Reilly. Believes new management and simple strategic plan can drive significant value creation in replacement auto parts retail. |
Auto Parts Retail Turnaround Management Change | |
| 2024 Q1 |
ValueManager emphasizes seeking better businesses at reasonable prices, making rational purchase decisions from pessimistic sellers. Notes that the more Graham-style value opportunities exist, the more neglect there seems to be in the market. |
Value Graham Undervalued Cheap Neglect |
MediaSignificant exposure to media companies including EW Scripps and Liberty TripAdvisor Holdings. Manager discusses leverage concerns in uncertain media economy but sees underappreciated value in management's ability to navigate challenges. |
Media Broadcasting Leverage Entertainment | |
AerospaceNew position in Park Aerospace developing composite materials for airplane engines, primarily serving GE Aviation. Clear pathway to double revenue and triple EBITDA based on future build rates of aircraft programs. |
Aerospace Composites Aviation Manufacturing | |
| 2023 Q4 |
EnergyManager holds three energy-related stocks including Hallador Energy, CNX Resources, and Vitesse Energy. Believes demand for carbon energy is stickier than many expect and sufficient alternatives are harder to produce than anticipated, creating higher and steadier profit fundamentals for domestic energy sources. |
Coal Natural Gas Oil Energy |
MediaPortfolio includes E.W. Scripps and Corus Entertainment with focus on traditional TV and advertising markets. Manager believes legacy TV has longer life than suggested and sees Scripps as a cash generator rapidly paying down debt, creating 20% annualized increases in equity value at current levels. |
Advertising Broadcasting Television | |
TravelExposure through Liberty TripAdvisor Holdings which owns TripAdvisor metasearch business and Viator experiences platform. Viator is growing 40% and nearing breakeven profitability, with manager viewing LTRPA as highly attractive given Viator's potential to achieve hotel OTA margins. |
Online Travel Tourism Experiences | |
AgricultureInitiated position in American Vanguard, an agricultural chemicals manufacturer going through inventory destocking cycle. Manager expects revenue recovery as company executes transformation plan and industry normalizes inventory levels, with meaningful upside if business returns to historical 11% EBITDA margins. |
Ag Chemicals Crop Protection Pesticides | |
| 2023 Q3 |
ValueThe fund focuses on concentrated investments in specific companies at specific values, seeking to capitalize on opportunities in small cap equities that are less affected by market fads. The manager emphasizes finding good businesses that grow with CEOs who understand value per share math. |
Value Small Caps Concentration Opportunistic Undervalued |
MediaSignificant exposure to media companies including E.W. Scripps and IAC's Dotdash Meredith, with the manager believing legacy TV has longer life than market suggests. The fund sees opportunities in companies positioned to capitalize on media industry evolution despite cyclical advertising pressures. |
Media Advertising Broadcasting Digital Cyclical | |
EnergyHoldings in coal and natural gas companies like Hallador Energy and CNX Resources, with the manager seeing value in old carbon assets as supply/demand dynamics favor these investments during the green transition. The completion of the Mountain Valley Pipeline provides additional upside for CNX. |
Coal Natural Gas Energy Transition Commodities Infrastructure | |
CybersecurityInvestment in DLH Holdings which has added high-margin cybersecurity capabilities through acquisition. The company provides cybersecurity services to federal health agencies and represents an asset-lite, high free cash flow business with sticky multi-year contracts. |
Cybersecurity Government IT Federal Contracts High Margin Recurring Revenue | |
| 2023 Q2 |
AIManager views AI as a marketing term with unclear monetization prospects. Notes that market activity in 2023 has been driven by large tech stocks attaching themselves to the AI bandwagon, but emphasizes there is nothing remotely clear about making money in AI. |
Artificial Intelligence Technology Marketing |
Satellite BroadbandViasat represents one of the fund's largest positions with significant upside potential. The manager believes the market is waking up to Viasat's progress after launching their first VST3 constellation satellite, which should bring hundreds of millions of non-earning assets online and turn on cashflow streams. |
Satellites Broadband Space Infrastructure | |
TravelMixed outlook on travel-related investments. While travel has shown strength overall, marketing budgets at hotel and travel companies have lagged in recovery. TripAdvisor's new strategic plan received negative reception from the investment community, though Viator continues strong growth. |
Tourism Hotels Online Travel | |
CybersecuritySecureWorks is converting from expensive consulting services to a software-only model with their Taegis product. The manager expects solid growth within the cloud software business as they eliminate duplicative costs and address new customers. |
Security Software Cloud Business Transformation | |
Infrastructure SpendingGreat Lakes Dredge & Dock benefits from a record $2.3 billion government fund for dredging projects in 2023. The domestic dredging bid market has seen significant recovery, with $600 million in bids for the first four months versus much lower comparable periods. |
Government Spending Dredging Ports |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Sep 3, 2025 | Fund Letters | Jeffrey Bronchick | FUN | Six Flags Entertainment Corporation | Consumer Discretionary | Leisure Facilities | Bull | NYSE | Attendance, cashflow, Integration, Themeparks, valuation | Login |
| Sep 3, 2025 | Fund Letters | Jeffrey Bronchick | VSAT | Viasat, Inc. | Information Technology | Alternative Carriers | Bear | NASDAQ | broadband, Capitalintensity, Execution, leverage, Satellite | Login |
| Sep 1, 2025 | Fund Letters | Cove Street Capital Small Cap Value Fund | FUN | Six Flags Entertainment Corporation | Consumer Discretionary | Leisure Facilities | Bull | NYSE | asset sales, Board Engagement, Cyclical, entertainment, Free Cash Flow, Merger Integration, Moat Business, Real Estate, theme parks, Value | Login |
| Mar 1, 2025 | Fund Letters | Cove Street Capital Small Cap Value Fund | KBR | KBR Inc. | Capital Goods | Construction & Engineering | Bull | NYSE | Cyclical, Defense, DOGE Impact, Government Contractor, Space Services, Value | Login |
| Mar 1, 2025 | Fund Letters | Cove Street Capital Small Cap Value Fund | LGTY | Logility Inc. | Software & Services | Software | Bull | NASDAQ | activist, dual-class structure, Governance, small-cap, Software, supply chain management, takeover target | Login |
| Sep 30, 2024 | Fund Letters | Cove Street Capital Small Cap Value Fund | OUT | Outfront Media | Communication Services | Advertising | Bull | NYSE | Billboards, deleveraging, Digital Conversion, dividend yield, Outdoor Advertising, REIT, Transit Advertising, turnaround | Login |
| Sep 30, 2024 | Fund Letters | Cove Street Capital Small Cap Value Fund | CLMB | Climb Global Solutions | Information Technology | Technology Distributors | Bull | NASDAQ | Acquisitions, cybersecurity, data center, Emerging Software, growth, IT distribution, Software, technology | Login |
| Sep 30, 2024 | Fund Letters | Cove Street Capital Small Cap Value Fund | RDVT | Red Violet | Information Technology | Data Processing & Outsourced Services | Bull | NASDAQ | AML, Cloud-First, Collections, Data Analytics, enterprise, government contracts, Identity Data, KYC, Marketing Services | Login |
| Jun 30, 2024 | Fund Letters | Cove Street Capital Small Cap Value Fund | SSP | E.W. Scripps Company | Communication Services | Broadcasting | Bull | NASDAQ | Asset Sale, broadcasting, Catalyst, leverage, media, undervalued, Value | Login |
| Jun 30, 2024 | Fund Letters | Cove Street Capital Small Cap Value Fund | CMP | Compass Minerals International Inc | Materials | Fertilizers & Agricultural Chemicals | Bull | NYSE | asset value, Fertilizer, materials, Salt, strategic interest, turnaround, Weather | Login |
| Jun 30, 2024 | Fund Letters | Cove Street Capital Small Cap Value Fund | VSAT | Viasat Inc | Communication Services | Alternative Carriers | Bull | NASDAQ | asset value, Catalyst, Competition, Defense, Satellite, Space, turnaround | Login |
| Jun 30, 2024 | Fund Letters | Cove Street Capital Small Cap Value Fund | KBR | KBR Inc | Industrials | Construction & Engineering | Bull | NYSE | cash generation, Defense, engineering, government contracts, Margins, transformation | Login |
| Jun 30, 2024 | Fund Letters | Cove Street Capital Small Cap Value Fund | AAP | Advance Auto Parts Inc | Consumer Discretionary | Automotive Retail | Bull | NYSE | aftermarket, automotive, Management Change, retail, turnaround, Value | Login |
| Jun 30, 2024 | Fund Letters | Cove Street Capital Small Cap Value Fund | CLVT | Clarivate Plc | Industrials | Research & Consulting Services | Bull | NYSE | Aggregation, Data Services, high margins, Ip, life sciences, research, turnaround | Login |
| Jun 30, 2024 | Fund Letters | Cove Street Capital Small Cap Value Fund | RDVT | Red Violet Inc | Industrials | Research & Consulting Services | Bull | NASDAQ | AML, cloud, Data Services, enterprise, growth, Identity, KYC | Login |
| Mar 31, 2024 | Fund Letters | Cove Street Capital Small Cap Value Fund | PKE | Park Aerospace | Industrials | Aerospace & Defense | Bull | NYSE | A320neo, Aerospace, asset-light, Composite Materials, GE Aviation, manufacturing, operating leverage | Login |
| Mar 31, 2024 | Fund Letters | Cove Street Capital Small Cap Value Fund | TBRG | TruBridge | Health Care | Health Care Technology | Bull | NASDAQ | cross-selling, Electronic Health Records, Healthcare IT, Outsourcing, Revenue Cycle Management, Rural Hospitals, turnaround | Login |
| Mar 31, 2024 | Fund Letters | Cove Street Capital Small Cap Value Fund | RDVT | Red Violet | Information Technology | Application Software | Bull | NASDAQ | acquisition target, Background Checks, Cloud software, high margins, Identity Verification, Proven Management, SaaS | Login |
| Sep 30, 2023 | Fund Letters | Cove Street Capital Small Cap Value Fund | VSAT | Viasat Inc | Communication Services | Satellite Telecommunications | Bull | NASDAQ | broadband, Cyclical, Satellite, Space, strategic value, telecommunications, turnaround | Login |
| Sep 30, 2023 | Fund Letters | Cove Street Capital Small Cap Value Fund | IAC | IAC Inc | Communication Services | Interactive Media & Services | Bull | NASDAQ | conglomerate, Digital platforms, Interactive Media, Sum-of-parts, technology, turnaround, Value | Login |
| Sep 30, 2023 | Fund Letters | Cove Street Capital Small Cap Value Fund | SSP | E.W. Scripps Company | Communication Services | Broadcasting | Bull | NASDAQ | advertising, broadcasting, cash generation, Cyclical, debt reduction, media, Television, Value | Login |
| Sep 30, 2023 | Fund Letters | Cove Street Capital Small Cap Value Fund | DLHC | DLH Holdings Corp | Industrials | Research & Consulting Services | Bull | NASDAQ | acquisition target, asset-light, Consulting, cybersecurity, Federal contracts, Government Services, healthcare | Login |
| Sep 30, 2023 | Fund Letters | Cove Street Capital Small Cap Value Fund | AMSWA | American Software Inc | Information Technology | Application Software | Bull | NASDAQ | acquisition target, B2C, Catalyst, Governance, Logistics, SaaS, Software, supply chain | Login |
| TICKER | COMMENTARY |
|---|---|
| AMZN | One company we own that we think has unique positioning to benefit from both the infrastructure and application layers is Amazon. Amazon's logistical prowess is one of the foremost moats in business today and it can and will be enhanced with AI. The company will do this in multiple ways, with better orchestration of its logistics assets and underlying cargo, as well as the buildout of more capable, sophisticated and robust robotics. Amazon is singularly well positioned to dominate the coordination layer, with AI's help, across its entire logistics network. |
| CLVT | High margin, high return, high FCF. New and competent management took over from SPAC clowns. Interesting ownership - PE, Exor, NY activist all of whom have been sandblasted over past 2 years with costs north of 6. Will shortly announce the sale of 1/3 of business at double digit multiple – CLVT now 6.5 as a whole. Simplify, take debt down a full turn enabling monster equity repurchase. Crushed by the AI trade. I think this is a representative clip that is not just applicable to CLVT - but many software moats at large. Their IP product is a better - IQVIA is #2. And there 2 other business lines fit the same closed moat concept. |
| CSCO | It took Cisco, the leading provider of internet equipment and briefly the world's most valuable company, a quarter of a century and another technology bubble to regain its peak. |
| MA | The enduring appeal of card payments is their universality. Consumers trust that Visa and Mastercard will be accepted globally. After more than 20 years of litigation, Visa and Mastercard agreed to yet another settlement that gives merchants greater flexibility |
| MSFT | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| SAP | We trimmed SAP SE. |
| V | There were companies there such as Visa, which we own, as well as many we do not, and which would not likely be appropriate for this mandate. |
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