| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 37.4% | 0% | 10.9% |
| 2025 | 2024 |
|---|---|
| 10.9% | 32.4% |
Smoak Capital returned 10.9% net in 2025, underperforming the S&P 500's 17.9% return due to minimal AI exposure and defensive positioning amid elevated valuations. The manager emphasizes value investing with a growth component, particularly targeting small and micro-cap opportunities in international markets. Top performer PHI Group, a helicopter operator trading at 3x EV/EBITDA versus peers at 8x, exemplifies the strategy. Tobila Systems, a Japanese fraud prevention company, represents the core thesis with its B2B segment growing 50%+ annually while trading at 4.5x EV/FCF. Japanese accounting standards obscure the company's superior cash generation from upfront license payments. Medical Facilities continues asset sales and buybacks at attractive valuations. The fund hired its first employee and closed to new investors. Since inception in 2018, the fund has generated 37.4% annualized returns versus 14.9% for the S&P 500, turning $100,000 into over $1 million. The manager maintains conviction in long-term outperformance through patient, process-oriented investing.
Focus on undervalued small and micro-cap companies with growth potential, particularly in international markets where accounting standards may obscure true earnings power and cash generation capabilities.
Manager expresses confidence that portfolio returns will continue to exceed the broader market over the long-term with patience, focus, and a process-oriented mindset.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 16 2026 | 2025 Q4 | 4441.T, DR.TO | cybersecurity, Defensive, growth, Japan, small caps, value |
4441 JP DR CN |
Smoak Capital's value-focused approach targets undervalued small-caps with growth potential, particularly in international markets. Despite underperforming in 2025 due to defensive positioning and minimal AI exposure, the fund has delivered exceptional long-term returns of 37.4% annualized since 2018. Key holdings like Tobila Systems demonstrate the strategy of finding mispriced growth companies trading at deep discounts. |
| Aug 15 2025 | 2025 Q2 | FILA.MI, IGR.L | capital efficiency, global, Japan, small caps, Trade Policy, value |
IGR LN FILA.MI IGR.L |
Smoak Capital outperformed with 10.6% net returns in H1 2025, driven by strong performance from Azeus. The manager is pivoting toward non-US markets, particularly Japan, where capital efficiency reforms are creating value opportunities. Trade policy uncertainty and valuation differences support this geographic shift. The value-focused approach continues targeting undervalued small-cap companies globally. |
| Feb 10 2025 | 2024 Q4 | FILA.MI, HD, NWL, QEPC, SWK | brands, consumer, M&A, small caps, Tools, turnaround, value |
FILA.MI QEPC |
Smoak Capital returned 32.4% in 2024 by targeting undervalued small companies experiencing transformational changes. Key holdings FILA and QEP trade at deep discounts to intrinsic value following corporate restructurings that improved underlying business quality. The strategy exploits pricing inefficiencies in underfollowed names where significant changes take time to be recognized by the broader market. |
| Jul 30 2024 | 2024 Q2 | LNF.TO | Canada, Capital Allocation, real estate, small caps, spinoffs, value | LNF.TO | Smoak Capital delivered 24.0% net returns in H1 2024, outperforming the S&P 500 by 870 basis points. Strong performance from FitLife, Azeus, and Medical Facilities drove results. New position Leon's Furniture offers compelling value at 11x earnings with hidden real estate worth potentially the entire market cap, catalyzed by planned REIT spinoff. |
| Jan 28 2024 | 2023 Q4 | FTLF, GWOX, HMM-A.TO | Banking, Education, Fitness, Manufacturing, small caps, value |
FTLF GWOX |
Smoak Capital targets undervalued small-caps trading under 10x earnings, leveraging size advantages to access underfollowed opportunities. Despite 2023's 14.9% return trailing the S&P 500 due to late-year macro divergence, the fund maintains strong conviction in holdings like Hammond Manufacturing at 5x earnings and Goodheart-Willcox at 3x FCF, expecting superior long-term returns versus expensive mega-caps. |
| Jul 30 2023 | 2023 Q2 | ASML, BWXT, CHTR, CMCSA, CRM, MA, META, MU, NOW, NVDA, V | AI, Enterprise Software, growth, nuclear, semiconductors, technology, Trade Policy | - | Despite strong 19% revenue and 21% EPS growth, the portfolio lagged in Q3 as AI concerns weighed on enterprise software holdings. Manager believes Trump's pro-growth policies create favorable environment for high-quality companies. Sold cable exposure due to subscriber weakness, added memory play Micron for AI data center demand. Nuclear power benefiting from AI-driven electricity needs. |
| Dec 31 2022 | 2022 Q4 | - | - | - | |
| Dec 31 2021 | 2021 Q4 | - | - | - | |
| Dec 31 2020 | 2020 Q4 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
CybersecurityCybersecurity companies are using AI in core algorithms to better identify anomalies and block malicious traffic. CrowdStrike is seeing reacceleration in growth with new Falcon Flex offering, while Netskope continues gaining SASE market share with strong competitive win rates. |
Security AI Detection Enterprise Cloud Protection |
JapanJapan offers tremendous value opportunities with one-third of companies trading below book value. Corporate governance reforms, record shareholder returns, and structural changes like unwinding cross-holdings are unlocking value. The investment opportunity is in early innings and could last several years. |
Corporate Governance Value Reforms Shareholder Returns Cross Holdings | |
ValueManager emphasizes investing in controlled companies trading at significant discounts to NAV, with European holding companies showing discounts of 30-68%. The strategy focuses on securities mispricing where real value exists, contrasting with overvalued technology stocks. |
Discounts NAV Mispricing Undervalued Controlled | |
| 2025 Q2 |
JapanCapital efficiency reforms and policies have continued to build momentum in Japan. Buybacks have more than doubled since 2022 and dividends are up over 70%. M&A has also picked up considerably. The manager is eager to continue researching small Japanese companies leading the way in capital efficiency improvements. |
Capital Efficiency Buybacks Dividends M&A Valuation |
Trade PolicyUnpredictable trade policy most likely contributed to capital flows shifting to Non-US countries and US dollar weakness. Tariff uncertainty created volatility and put extreme pressure on supply chains, particularly affecting companies with US operations. |
Tariffs Supply Chain Dollar Volatility Capital Flows | |
ValueThe manager is focused on finding undervalued opportunities, particularly given valuation differences between US and non-US markets. Several positions are described as trading at attractive valuations relative to their fundamentals. |
Undervalued Valuation Opportunity Fundamentals Mispriced | |
| 2024 Q4 |
ValueManager focuses on undervalued companies trading below intrinsic value, particularly small and underfollowed companies where significant changes create pricing inefficiencies. FILA trades at only 3.2x core EBITDA when assigning reasonable valuation to DOMS subsidiary. QEP trades at 4.5x EV/EBIT despite improved operations after divestitures. |
Undervalued Intrinsic Value Mispricing Deep Value Discount |
Small CapsStrategy explicitly targets small and underfollowed companies where significant changes are not quickly priced in by the market. Manager believes analysts and investors following larger companies price in changes much quicker, creating opportunities in smaller names. Two largest holdings fit this pattern of small companies experiencing transformational changes. |
Small Companies Underfollowed Inefficiency Mispricing Opportunity | |
ToolsQEP designs, manufactures, and distributes flooring installation tools with brands including QEP, Roberts, and Capitol. The tools business has strong underlying profitability with operating margins rising from 3% to over 10% after divesting underperforming floor covering operations. Hand and Power Tools industry has historical M&A activity with brands holding lasting value. |
Flooring Tools Installation Manufacturing Brands Profitability | |
| 2024 Q2 |
ValueManager focuses on finding stocks trading at significant discounts to fair value, citing Leon's Furniture at 11x earnings with substantial hidden real estate value. Emphasizes situations where businesses are widely misunderstood or overlooked by investors. |
Discount Undervalued Hidden Value Mispriced Fair Value |
Real EstateLeon's Furniture owns 5.6M sq ft of retail and industrial real estate held at cost, plus 40 acres near Toronto for residential development. Manager sees substantial value creation through REIT spinoff similar to Canadian Tire and Loblaws strategies. |
REIT Property Development Spinoff Unlock | |
| 2023 Q4 |
ValueThe fund focuses on finding good businesses trading at less than 10 times earnings, with holdings like Hammond Manufacturing at 5x earnings and Goodheart-Willcox at 3x EV/FCF. The manager believes these valuations provide significant upside potential compared to highly valued market segments. |
Value Earnings Discount Undervalued Cheap |
Small CapsThe fund's competitive advantage is its relatively small amount of capital and limited constraints, allowing it to venture into underfollowed and obscure opportunities. The portfolio consists of smaller, less liquid names that don't react as quickly to macro news as larger, more efficient markets. |
Small Caps Underfollowed Illiquid Obscure Niche | |
Data CentersHammond Manufacturing benefits from secular trends in cloud computing, infrastructure investment, and data center growth. Their racks and cabinets product category directly benefits from continuous growth in data center investments and cloud computing demand. |
Data Centers Cloud Infrastructure Racks Computing | |
| 2023 Q2 |
AIManager discusses the debate over whether AI will drive increased adoption of enterprise software or allow companies to bypass vendors with internal solutions. Believes platform companies like ServiceNow and Salesforce will be critical AI partners despite market skepticism. AI data center demand has added massive structural component to high bandwidth memory demand. |
Enterprise Software Data Centers Productivity Innovation Automation |
SemiconductorsASML maintains monopoly in highest-end lithography equipment essential for making semiconductors. EUV machines critical for high-end chips required for AI. Micron positioned to gain share in high bandwidth memory market with Vera Rubin launch. Memory market experiencing structural demand from AI data centers. |
Memory Lithography Foundries Equipment Cyclicality | |
NuclearBWX Technologies benefiting from massive growth in nuclear-related backlog, up 70% year-over-year. Nuclear power essential for meeting AI data center power demands and maintaining energy leadership. Trump administration taking all-of-the-above energy approach requiring nuclear as part of solution for 100 gigawatts of additional capacity needed. |
Power Generation Energy Infrastructure Backlog Small Modular Reactors Waste Storage | |
Trade PolicyTrump administration has rewritten international trade terms favoring US domestic production through tariffs implemented between April and September 2025. Tariffs have yet to materially impact consumer prices and have been absorbed in supply chain. Outstanding US-China trade deal remains unresolved with Nvidia caught in middle. |
Tariffs Manufacturing Supply Chain Geopolitical Investment |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Feb 16, 2026 | Fund Letters | Daniel Smoak | 4441 JP | Tobila Systems Inc. | Information Technology | Application Software | Bull | New York Stock Exchange | Fraud prevention, Free Cash Flow, Japan, Ltv/Cac, SaaS, undervalued | Login |
| Feb 16, 2026 | Fund Letters | Daniel Smoak | DR CN | Medical Facilities Corporation | Health Care | Health Care Facilities | Bull | New York Stock Exchange | asset sales, buybacks, Hospitals, shareholder yield, undervalued | Login |
| Aug 15, 2025 | Fund Letters | Daniel Smoak | IGR LN | IG Design Group plc | Consumer Discretionary | Commercial Services & Supplies | Bull | New York Stock Exchange | deep value, Gift Packaging, Liquidation, net cash, restructuring, turnaround | Login |
| Dec 31, 2024 | Fund Letters | Smoak Capital Management | FILA.MI | F.I.L.A. S.p.a. | Consumer Discretionary | Leisure Products | Bull | Borsa Italiana | art supplies, brand portfolio, debt reduction, dividend, EBITDA multiple, India, Italy, market leader, spin-off, stationery, Sum-of-parts, undervalued, Value | Login |
| Dec 31, 2024 | Fund Letters | Smoak Capital Management | QEPC | QEP Co., Inc. | Industrials | Industrial Machinery | Bull | OTCQX | capital allocation, Customer concentration, divestiture, dividend, Flooring, Home Depot, M&A Target, Management Change, margin expansion, Tools, turnaround, Value | Login |
| Jul 1, 2024 | Fund Letters | Smoak Capital Management | LNF.TO | Leon's Furniture | Consumer Discretionary | Home Furnishing Retail | Bull | TSX | Asset-Heavy, Canada, furniture retailer, Hidden-Assets, market leader, Real Estate, REIT Spinoff, Residential Development, Toronto, value unlock | Login |
| Dec 31, 2023 | Fund Letters | Smoak Capital Management | FTLF | FitLife Brands | Consumer Staples | Personal Products | Bull | NASDAQ | Acquisitions, Amazon, capital allocation, Distressed assets, e-commerce, EBITDA growth, Nutritional Supplements, Protein Products, turnaround, Wholesale Distribution | Login |
| Dec 31, 2023 | Fund Letters | Smoak Capital Management | - | Hammond Manufacturing | Industrials | Electrical Equipment | Bull | TSX | Canada, Cloud computing, data centers, electrical equipment, Electrification, infrastructure, manufacturing, Peer Comparison, real estate value, secular tailwinds | Login |
| Dec 31, 2023 | Fund Letters | Smoak Capital Management | GWOX | Goodheart-Willcox | Communication Services | Publishing | Bull | OTC | Career Technical Education, cash generation, Digital transformation, Edtech, Educational Publishing, GAAP Distortion, high margins, Niche markets, Pandemic Beneficiary, subscription revenue | Login |
| - | Fund Letters | Smoak Capital Management | FILA.MI | F.I.L.A. S.p.a. | Consumer Discretionary | Leisure Products | Bull | Borsa Italiana | Art Materials, Consumer Discretionary, dividend, Italy, manufacturing, stationery, strategic stake, Value | Login |
| - | Fund Letters | Smoak Capital Management | IGR.L | IG Design Group | Consumer Discretionary | Leisure Products | Neutral | London Stock Exchange | Consumer Discretionary, Corporate Governance, Craft Supplies, Gift Packaging, Liquidation, net cash, turnaround, UK | Login |
| TICKER | COMMENTARY |
|---|---|
| 4441.T | Tobila Systems is a Japanese company focused on fraud and spam call prevention. Tobila has successfully developed a new B2B growth engine that will accelerate revenue, profit, and free cash flow growth going forward yet amazingly trades at 4.5x EV/FCF with its B2B segment growing revenue over 50% per year. Japanese GAAP greatly understates the earnings power of the business due to long-term spam filtering license terms. Investors focused on reported earnings likely do not appreciate the transformation and cash generation of the B2B segment, which shows no signs of slowing. |
| DR.TO | Around three years ago, activist investors stepped in at Medical Facilities, as the prior management's acquisition strategy wasn't working. Jason Redman was appointed CEO with a mandate to divest non-core assets and then the four core surgical hospitals – two of which are best-in-class facilities whose value was buried within a broader hospital conglomerate. Jason and his team have now divested of all their non-core assets and sold two of their four surgical hospitals – with the sale of the final two most likely to happen in the near term. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||
