| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Adestella returned 10.1% net in 2025, with long book gains of 12.7% partially offset by 2.6% short losses. International holdings led with 7.6% contribution versus 2.5% domestic. Top contributors included Nebius Group, which more than doubled on data center GPU demand and added over 3% to returns, Power Solutions International, which tripled on data center power demand before being exited, and Bel Fuse, which tripled on multiple expansion despite modest EBITDA growth. Detractors included Par Technology on restaurant software pessimism, RXO on freight market weakness and automation disruption, and LifeMD on guidance cuts. Manager maintains small-cap bias despite decade of underperformance, with median portfolio market cap of $2-5B. Current positioning emphasizes AI infrastructure through Dell as largest holding, betting on enterprise migration from cloud APIs to on-premise servers for cost efficiency. Portfolio also overweight aerospace aftermarket suppliers and select software companies with systems-of-record moats. Net exposure remains 90% with gross at 115%. Manager acknowledges factor concentration risks and maintains valuation discipline while awaiting mean reversion in small-cap performance.
Adestella maintains a small-cap biased, valuation-disciplined approach focused on identifying mispriced situations where business quality and growth prospects warrant higher multiples, with current emphasis on AI infrastructure beneficiaries through derivative plays like Dell's enterprise server business and aerospace aftermarket suppliers benefiting from aircraft service life extensions.
Manager acknowledges difficult backdrop for small-cap value strategy but maintains process discipline, expecting mean reversion after decade of large-cap outperformance. Sees continued opportunities in AI infrastructure buildout through derivative plays and selective software positions protected from disruption. Remains patient on valuation discipline while monitoring factor exposures more closely to avoid unintended concentration risks.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 1 2026 | 2026 Q2 | AIR, ATRO, BELF.B, DELL, ISSC, LFMD, NBIS, OKTA, PAR, PSIX, RXO, SMCI, TOST | aerospace, AI, Data centers, industrials, small caps, software, valuation, value |
NBIS PSIX BELF.B PAR RXO LFMD DELL TOST OKTA |
Adestella returned 10.1% in 2025 led by AI infrastructure plays Nebius and Power Solutions. Manager maintains small-cap value discipline despite decade of underperformance, currently concentrated in Dell on enterprise AI server thesis and aerospace aftermarket suppliers. Initiated software positions in Toast and Okta as AI-disruption-resistant systems of record. Net exposure 90%, awaiting small-cap mean reversion while managing factor concentration risks. |
| Jun 13 2025 | 2025 Q1 | NAGE | Biotechnology, international, Supplements, tariffs, technology, Wellness | NAGE | Adestella declined 11.9% in Q1 2025 due to tariff concerns despite solid earnings, with international holdings outperforming but unable to offset domestic losses. Markets recovered in Q2 as rhetoric moderated. The manager focuses on investment processes, highlighting new position NAGE, a profitable NAD+ supplement company targeting the growing wellness and aging market. |
| Mar 1 2025 | 2024 Q4 | NBIS, PSIX, TWLO | Inflection, software, technology, turnaround, value | - | Adestella targets inflection opportunities where sustainable business changes create value gaps. Twilio exemplifies this - down 70% over four years despite 4x revenue growth, the cloud communications leader has pivoted from cash burning to profitable operations under new management. Trading at 4x sales versus historical 40x peak, with $3B guided free cash flow through 2027, it offers compelling risk-adjusted upside. |
| Mar 31 2025 | 2024 Q4 | NBIS, PSIX, TWLO | Inflection, software, technology, turnaround, value | TWLO | Adestella targets inflection opportunities where sustainable business changes create value gaps. Twilio exemplifies this - down 70% over four years despite 4x revenue growth, the cloud communications leader has pivoted from cash burning to profitable operations under new management. Trading at 4x sales versus historical 40x peak, with $3B guided free cash flow through 2027, it offers compelling risk-adjusted upside. |
| Dec 31 2024 | 2024 Q3 | EVO.ST, FOUR, NBIS, PRKS, PSIX, UFPT | AI, edge, international, small caps, Structural Advantages, value |
PSIX EVO.ST NBIS |
Adestella leverages structural advantages of small size to target under-the-radar opportunities in small-cap and international markets. Despite Q3 underperformance due to sector allocation, the fund maintains conviction in quality holdings like Evolution Gaming and AI-infrastructure play Nebius Group. Manager expects eventual reversal of large-cap dominance to benefit concentrated value approach. |
| Aug 31 2024 | 2024 Q2 | MGRC, PRKS, WSC | Entertainment, Industrial Services, M&A, Recovery, small caps, value |
PRKS WSC |
Adestella lost 3.5% in Q2 as small-caps underperformed, but used weakness to add positions. The fund highlighted two new holdings: United Parks & Resorts, a theme park operator recovering from past challenges and trading at a discount despite superior metrics, and Willscot Mobile Mini, a temporary space provider with compelling unit economics and M&A opportunities. |
| Jun 30 2024 | 2024 Q1 | FOUR | Long/Short, payments, Portfolio Management, small cap, value | FOUR | Adestella delivered 12% returns in Q1 despite small-cap headwinds through disciplined portfolio management and selective stock picking. The fund's systematic approach to position sizing and risk management, combined with concentrated bets like Shift4 Payments offering 35-50% upside and sale catalyst potential, positions it well for eventual factor rotation from large-cap dominance to small-cap outperformance. |
| Mar 1 2024 | 2023 Q4 | HRI, URI | Construction Equipment, Equipment Rental, Long/Short, small caps, value | - | Small-cap value fund gained 3.2% in Q4 but lagged mega-cap rally due to underweight tech/financials positioning. New position in equipment rental company Herc Holdings offers 30% IRR potential through rental penetration gains and operational improvements. Manager sees early signs of small-cap recovery and views potential rate cuts as positive catalyst. |
| Mar 31 2024 | 2023 Q4 | HRI, URI | Construction Equipment, Equipment Rental, Long/Short, small caps, value | HRI | Small-cap value fund gained 3.2% in Q4 but lagged mega-cap rally due to underweight tech/financials positioning. New position in equipment rental company Herc Holdings offers 30% IRR potential through rental penetration gains and operational improvements. Manager sees early signs of small-cap recovery and views potential rate cuts as positive catalyst. |
| Dec 1 2023 | 2023 Q3 | RRR | Benchmarks, Casinos, Long/Short, Nevada, small cap, value | - | Small-cap value manager returned 1.1% in Q3 through long/short strategy, adding Red Rock Resorts position. Red Rock benefits from Las Vegas locals gaming market growth and regulatory moat, with new Durango casino providing near-term catalyst. Manager maintains conviction in out-of-favor names despite index concentration favoring mega-caps, expecting broader market participation ahead. |
| Dec 31 2023 | 2023 Q3 | RRR | Benchmarks, Casinos, Long/Short, Nevada, small cap, value | AEO|ASH|ASUR|AZZ|DCO|FA|FBIN|GHM|LEU|NSP|RRR|UTZ | Small-cap value manager returned 1.1% in Q3 through long/short strategy, adding Red Rock Resorts position. Red Rock benefits from Las Vegas locals gaming market growth and regulatory moat, with new Durango casino providing near-term catalyst. Manager maintains conviction in out-of-favor names despite index concentration favoring mega-caps, expecting broader market participation ahead. |
| Sep 1 2023 | 2023 Q2 | MYRG, PWR, UFPT | Energy Transition, healthcare, infrastructure, Medical Devices, small caps, value | - | Adestella gained 6.7% in Q2 while avoiding AI-driven mega-caps. The fund added two small-cap positions crossing institutional size thresholds: UFP Technologies, a medical device manufacturer targeting 25% IRR potential, and MYR Group, an electrical contractor benefiting from infrastructure spending and energy transition. Both offer attractive fundamentals with potential flow-driven re-rating catalysts. |
| Sep 30 2023 | 2023 Q2 | MYRG, PWR, UFPT | Energy Transition, healthcare, infrastructure, Medical Devices, small caps, value |
UFPT MYRG |
Adestella gained 6.7% in Q2 while avoiding AI-driven mega-caps. The fund added two small-cap positions crossing institutional size thresholds: UFP Technologies, a medical device manufacturer targeting 25% IRR potential, and MYR Group, an electrical contractor benefiting from infrastructure spending and energy transition. Both offer attractive fundamentals with potential flow-driven re-rating catalysts. |
| Jun 1 2023 | 2023 Q1 | SDI.L, VRLA.PA | AI, Europe, Glass, Instruments, international, small caps, value | - | Adestella focuses on undervalued European small-caps with strong cash generation, avoiding AI hype. International positions outperformed domestic for first time despite prolonged US market dominance. Portfolio includes SDI Group scientific instruments rollup and Verallia glass packaging at compressed multiples. Manager expects boring companies to eventually be rewarded when market concentration normalizes. |
| Jun 30 2023 | 2023 Q1 | SDI.L, VRLA.PA | AI, Europe, Glass, Instruments, international, small caps, value |
SDI.L VRLA.PA |
Adestella focuses on undervalued European small-caps with strong cash generation, avoiding AI hype. International positions outperformed domestic for first time despite prolonged US market dominance. Portfolio includes SDI Group scientific instruments rollup and Verallia glass packaging at compressed multiples. Manager expects boring companies to eventually be rewarded when market concentration normalizes. |
| Mar 28 2023 | 2022 Q4 | DASH, DKNG, FC, OTLY, SNOW | - | - | |
| Dec 16 2022 | 2022 Q3 | EVO SS, TRMR, XPO | - | - | |
| Sep 7 2022 | 2022 Q2 | - | - | - | |
| Jun 2 2022 | 2022 Q1 | INMD, SIG, XPO | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIAI infrastructure buildout drove strongest contributors in 2025, with data center demand for GPU compute clusters surging. Manager sees shift from cloud API usage to on-premise enterprise AI servers as companies seek cost efficiency, creating multi-year tailwind for Dell's AI-optimized server business. Agentic AI driving exponential token demand while subsidies end, forcing enterprises to move workloads in-house using open models. |
Data Centers Enterprise Software Semiconductors Cloud Servers |
Data CentersData center power requirements created surge in demand for power generation equipment in 2025. Manager holds positions in electricity grid and natural gas plant engineering and construction companies as derivative plays on data center buildout. Power Solutions International benefited from rapid data center growth before demand shifted to more robust long-term power solutions. |
Energy Transition Grid Upgrade Infrastructure Spending Power Equipment | |
Small CapsManager maintains small-cap bias with median portfolio market value of $2-5B despite decade of underperformance. Large caps returned 314% cumulatively since 2015 versus 139% for small caps, winning 10 of last 11 years. Manager acknowledges swimming against the tide but insists on maintaining process discipline and waiting for mean reversion rather than chasing mega-cap momentum. |
Value Quality Market Cap | |
SoftwareSoftware companies unfairly punished by vibe-coding fears created opportunities to purchase shares at attractive prices. Manager initiated positions in Toast and Okta, which are protected from AI disruption because they serve as systems of record handling mission-critical functions with proprietary data. These companies own transaction-level data and centralize access management that cannot be easily replicated. |
SaaS Enterprise Software Cybersecurity Payments | |
AerospaceIndustry dynamics favorable to manufacturers, particularly in duopolistic widebody segment. Boeing production challenges and gradual ramp constraints at both Boeing and Airbus, combined with growing global air traffic, forcing airlines to keep planes in service longer. This drives increased aftermarket demand for avionics upgrades and passenger experience improvements. Manager overweight industrials across aerospace value chain. |
Defense Aviation Services Industrial Machinery | |
ValuationBel Fuse position demonstrated importance of valuation discipline, tripling despite only 40% EBITDA growth as multiple expanded from 6x to 20x trailing EBITDA. Manager emphasizes maintaining satisfactory relationship between price and value as core process element. Willing to exit positions when valuations reach full value to redeploy into superior risk-reward opportunities. |
Value Quality Earnings | |
| 2025 Q1 |
BiotechnologyDetailed analysis of Niagen Bioscience (NAGE), a NAD+ supplement company focused on healthy aging and longevity. The company has achieved recent profitability and operates in the growing wellness market targeting aging demographics. Strong brand awareness with Tru Niagen as a leading Amazon supplement. |
NAD Supplements Aging Wellness Longevity |
| 2024 Q4 |
CloudTwilio operates as a cloud communication services provider through its CPaaS platform. The company has undergone significant operational restructuring to shift from growth-at-any-cost to profitability focus, with new CEO implementing cost reductions and capital return programs. |
CPaaS Communication SaaS Restructuring Profitability |
ValueManager identifies inflection point opportunities where companies trade below fair value due to temporary issues. Twilio represents this approach - down 70% over 4 years, trading at 4x EV/S versus 40x at peak, same price as 2019 but with 4x revenue. |
Inflection Undervalued Turnaround Valuation Recovery | |
| 2024 Q4 |
CloudTwilio operates as a cloud communication services provider through its CPaaS platform. The company has undergone significant operational restructuring to shift from growth-at-any-cost to profitability focus, with new CEO implementing cost reductions and capital return programs. |
CPaaS Communication SaaS Restructuring Profitability |
ValueManager identifies inflection point opportunities where companies trade below fair value due to temporary issues. Twilio represents this approach - down 70% over 4 years, trading at 4x EV/S versus 40x at peak, same price as 2019 but with 4x revenue. |
Inflection Undervalued Turnaround Valuation Recovery | |
| 2024 Q3 |
Small CapsManager emphasizes structural advantages of targeting under-the-radar small-cap opportunities, noting that while large-caps have outperformed for nearly two decades, cheaper valuations and longer compounding runways historically led smaller firms to superior performance over 80+ years prior to 2007. Current portfolio includes sub-$500M companies like Power Solutions International trading at attractive multiples. |
Small Cap Valuations Compounding Under-the-radar |
AIDiscussion centers on AI as both opportunity and competitive threat. Manager notes AI models may soon outperform sophisticated qualitative investors, while highlighting investment in Nebius Group, an AI-infrastructure company benefiting from insatiable demand for AI stories at reasonable prices. |
AI Infrastructure Machine Learning Technology Disruption | |
ValueFund pursues value investing across geographies and asset classes, seeking companies with superior valuations or growth prospects. Examples include Evolution Gaming trading below US market multiples despite high quality, and Power Solutions International at 7x trailing earnings with secular tailwinds. |
Valuation Undervalued Quality Multiples | |
| 2024 Q2 |
Theme ParksUnited Parks & Resorts operates theme parks including Busch Gardens and SeaWorld. The company is finally turning the corner after years of challenges from the Blackfish documentary and pandemic impacts. Despite similar growth and superior profitability metrics to leisure industry competitors, PRKS trades at a discount to peers. |
Entertainment Leisure Tourism Recovery Valuation |
Industrial ServicesWillscot Mobile Mini Holdings provides temporary space solutions with compelling unit economics generating 25-30% lifetime IRRs. The company has an established M&A playbook, having completed 30+ deals since 2017 while delivering 10% ROIC expansion and 14% EBITDA margin expansion. |
Rentals Equipment M&A Recurring Revenue Infrastructure | |
| 2024 Q1 |
PaymentsShift4 Payments represents a compelling investment opportunity trading at 9.5-10x EBITDA despite 25%+ organic growth. The company has grown payment volume and revenue by double-digits every year for 24 years and operates across restaurant, hospitality, and sports & entertainment verticals with strong competitive moats. |
Payment Processing SaaS Restaurant Technology Sports Entertainment Hospitality |
| 2023 Q4 |
Construction EquipmentHeavy machinery industrials benefit from infrastructure investment and housing shortfalls. Rental equipment providers gain from continued share gains in rental penetration, which has increased consistently but remains below levels seen in other developed countries. |
Equipment Rental Infrastructure Construction Rental Penetration Heavy Machinery |
| 2023 Q4 |
Construction EquipmentHeavy machinery industrials benefit from infrastructure investment and housing shortfalls. Rental equipment providers gain from continued share gains in rental penetration, which has increased consistently but remains below levels seen in other developed countries. |
Equipment Rental Infrastructure Construction Rental Penetration Heavy Machinery |
| 2023 Q3 |
CasinosRed Rock Resorts operates casino and entertainment properties in the Las Vegas locals market, which has structural advantages over the Strip including less competition and higher gaming margins. The company benefits from Nevada's rapid population growth driven by California migration and favorable tax environment. |
Gaming Nevada Population Growth Locals Market Entertainment |
| 2023 Q3 |
CasinosRed Rock Resorts operates casino and entertainment properties in the Las Vegas locals market, which has structural advantages over the Strip including less competition and higher gaming margins. The company benefits from Nevada's rapid population growth driven by California migration and favorable tax environment. |
Gaming Nevada Population Growth Locals Market Entertainment |
| 2023 Q2 |
Infrastructure SpendingMYR Group benefits from the Infrastructure Investment and Jobs Act's $73B investment in electric grid and energy infrastructure. The company's backlog has reached record levels as initial disbursements begin flowing. Both T&D and C&I divisions stand to benefit from significant funding for public works projects. |
IIJA Grid Utilities Construction Electrical |
Energy TransitionMYR Group is positioned to benefit from grid decarbonization and utility-scale solar projects. The DOE estimates US transmission systems need 57% capacity growth by 2035 to meet clean energy targets. Supply chain constraints for solar are easing while tax credits from the Inflation Reduction Act incentivize investment. |
Solar Grid Decarbonization Transmission Clean Energy | |
Medical DevicesUFP Technologies derives 85% of sales from single-use medical devices and sterile packaging solutions. The global medical device market is forecast to grow 5.5% through the decade. UFPT serves 25 of the 30 largest medical device manufacturers and sees opportunity for further penetration of its client base. |
MedTech Healthcare Single-use Packaging Growth | |
| 2023 Q2 |
Infrastructure SpendingMYR Group benefits from the Infrastructure Investment and Jobs Act's $73B investment in electric grid and energy infrastructure. The company's backlog has reached record levels as initial disbursements begin flowing. Both T&D and C&I divisions stand to benefit from significant funding for public works projects. |
IIJA Grid Utilities Construction Electrical |
Energy TransitionMYR Group is positioned to benefit from grid decarbonization and utility-scale solar projects. The DOE estimates US transmission systems need 57% capacity growth by 2035 to meet clean energy targets. Supply chain constraints for solar are easing while tax credits from the Inflation Reduction Act incentivize investment. |
Solar Grid Decarbonization Transmission Clean Energy | |
Medical DevicesUFP Technologies derives 85% of sales from single-use medical devices and sterile packaging solutions. The global medical device market is forecast to grow 5.5% through the decade. UFPT serves 25 of the 30 largest medical device manufacturers and sees opportunity for further penetration of its client base. |
MedTech Healthcare Single-use Packaging Growth | |
| 2023 Q1 |
EuropeManager believes international markets, particularly Europe, offer better risk-reward despite recent underperformance. European energy prices expected to move higher with volatility, but many companies have limited exposure to such inputs. Focus on cash-generative companies that can withstand higher interest rates. |
European Markets Valuation Gap Energy Prices Cash Generation Interest Rates |
ValuePortfolio tilted toward value opportunities with focus on companies trading at discounted multiples. SDI Group trading at less than 20x earnings down from 41x peak. Verallia at 6x EBITDA represents significant discount to peer Vidrala at 11x. |
Discounted Multiples Earnings Compression Peer Comparison Valuation Gap | |
AIRecent AI craze has created new trillion-dollar club member and unleashed investor animal spirits. Tech comprising 7 of 8 largest S&P components has propped up indices despite zero net contribution from rank-and-file constituents. Manager avoiding chasing AI winners after they've become behemoths. |
Artificial Intelligence Tech Concentration Market Leadership FOMO | |
| 2023 Q1 |
EuropeManager believes international markets, particularly Europe, offer better risk-reward despite recent underperformance. European energy prices expected to move higher with volatility, but many companies have limited exposure to such inputs. Focus on cash-generative companies that can withstand higher interest rates. |
European Markets Valuation Gap Energy Prices Cash Generation Interest Rates |
ValuePortfolio tilted toward value opportunities with focus on companies trading at discounted multiples. SDI Group trading at less than 20x earnings down from 41x peak. Verallia at 6x EBITDA represents significant discount to peer Vidrala at 11x. |
Discounted Multiples Earnings Compression Peer Comparison Valuation Gap | |
AIRecent AI craze has created new trillion-dollar club member and unleashed investor animal spirits. Tech comprising 7 of 8 largest S&P components has propped up indices despite zero net contribution from rank-and-file constituents. Manager avoiding chasing AI winners after they've become behemoths. |
Artificial Intelligence Tech Concentration Market Leadership FOMO |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 1, 2026 | Fund Letters | Adestella Investment Management | NBIS | Nebius Group | Internet Content & Information | IT Services | Bull | NASDAQ | AI infrastructure, autonomous vehicles, cloud infrastructure, data centers, Equity, GPU Compute, growth, hyperscaler, technology conglomerate | Login |
| Jul 1, 2026 | Fund Letters | Adestella Investment Management | PSIX | Power Solutions International | Specialty Industrial Machinery | Industrial Machinery | Neutral | NASDAQ | Cyclical, Data-Center Power, Engine Manufacturing, Equity, index inclusion, industrial machinery, uplisting, Value | Login |
| Jul 1, 2026 | Fund Letters | Adestella Investment Management | BELF.B | Bel Fuse | Other | Electronic Components | Neutral | NASDAQ | connectivity solutions, Electronic Components, Equity, high-ROIC, manufacturing, multiple expansion, Value | Login |
| Jul 1, 2026 | Fund Letters | Adestella Investment Management | PAR | Par Technology | Software - Application | Application Software | Bear | New York Stock Exchange | capital allocation, Equity, Payments, Point of Sale, Quick service restaurants, restaurant software, SaaS, turnaround | Login |
| Jul 1, 2026 | Fund Letters | Adestella Investment Management | RXO | RXO | Trucking | Air Freight & Logistics | Bear | New York Stock Exchange | Automation Risk, Cyclical, Equity, Freight Brokerage, Logistics, margin compression, Merger Integration, Trucking | Login |
| Jul 1, 2026 | Fund Letters | Adestella Investment Management | LFMD | LifeMD | Health Information Services | Health Care Technology | Bear | NASDAQ | Equity, GLP-1, growth, Healthcare services, Management Credibility, small-cap, telehealth, weight management | Login |
| Jul 1, 2026 | Fund Letters | Adestella Investment Management | DELL | Dell Technologies | Computer Hardware | Technology Hardware, Storage & Peripherals | Bull | New York Stock Exchange | AI servers, capital return, Data center infrastructure, Enterprise hardware, Equity, insider ownership, large-cap, On-Premise Computing, secular growth, technology hardware | Login |
| Jul 1, 2026 | Fund Letters | Adestella Investment Management | TOST | Toast | Software - Infrastructure | Application Software | Bull | New York Stock Exchange | AI-Resistant, Equity, Mission-Critical, Payments, Point of Sale, proprietary data, restaurant software, SaaS, System of Record | Login |
| Jul 1, 2026 | Fund Letters | Adestella Investment Management | OKTA | Okta | Software - Infrastructure | Systems Software | Bull | NASDAQ | AI-Resistant, Authentication, cybersecurity, Enterprise software, Equity, identity management, Mission-Critical, proprietary data, SaaS, System of Record | Login |
| Jun 1, 2025 | Fund Letters | Adestella Investment Management | NAGE | Niagen Bioscience | Health Care | Biotechnology | Bull | NASDAQ | Anti-Aging, biotechnology, direct-to-consumer, growth, Healthy Aging, Longevity, M&A Target, NAD+, Pharmaceutical-Grade, profitability inflection, supplements, Wellness | Login |
| Mar 1, 2025 | Fund Letters | Adestella Investment Management | TWLO | Twilio Inc. | Information Technology | Application Software | Bull | NYSE | activist, API, cloud communications, Cpaas, Free Cash Flow, Inflection, profitability, SaaS, Software, turnaround | Login |
| Dec 1, 2024 | Fund Letters | Adestella Investment Management | PSIX | Power Solutions International | Industrials | Industrial Machinery | Bull | NASDAQ | Engine, Industrial, margin expansion, OTC, Power systems, secular tailwinds, small-cap, Under-the-radar, Value | Login |
| Dec 1, 2024 | Fund Letters | Adestella Investment Management | EVO.ST | Evolution Gaming | Communication Services | Interactive Media & Services | Bull | Stockholm Stock Exchange | European, Gaming, High quality, International, live casino, Long-term holding, Mean Reversion, valuation discount | Login |
| Dec 1, 2024 | Fund Letters | Adestella Investment Management | NBIS | Nebius Group | Information Technology | IT Services | Bull | NASDAQ | AI infrastructure, Discount to comps, Early access, Index exclusion, Misunderstood situation, rapid growth, Russian divestiture, spinoff | Login |
| Aug 1, 2024 | Fund Letters | Adestella Investment Management | PRKS | United Parks & Resorts | Consumer Discretionary | Leisure Facilities | Bull | NYSE | Attendance Recovery, entertainment, Fixed Costs, international expansion, Pricing power, private equity, real estate development, theme parks, turnaround, Value | Login |
| Aug 1, 2024 | Fund Letters | Adestella Investment Management | WSC | Willscot Mobile Mini Holdings | Industrials | Trading Companies & Distributors | Bull | NASDAQ | Equipment Rental, Free Cash Flow, GDP growth, infrastructure, M&A Consolidation, Modular Offices, recurring revenue, Temporary Space, Unit economics, value-added services | Login |
| Jun 1, 2024 | Fund Letters | Adestella Investment Management | FOUR | Shift4 Payments | Information Technology | Data Processing & Outsourced Services | Bull | NYSE | Catalyst, founder-led, hospitality, M&A, payment processing, POS Systems, Restaurant technology, Roll-up Strategy, SaaS, sports entertainment, Value | Login |
| Mar 1, 2024 | Fund Letters | Adestella Investment Management | HRI | Herc Holdings | Industrials | Trading Companies & Distributors | Bull | NYSE | capital allocation, consolidation, Equipment Rental, heavy machinery, Industrial, infrastructure, M&A, specialty equipment, turnaround, Value | Login |
| Dec 1, 2023 | Fund Letters | Adestella Investment Management | AEO|ASH|ASUR|AZZ|DCO|FA|FBIN|GHM|LEU|NSP|RRR|UTZ | Red Rock Resorts | Consumer Discretionary | Casinos & Gaming | Bull | NASDAQ | California Migration, Casinos, development pipeline, Equity, Free Cash Flow, Gaming, Las Vegas, Locals Market, Nevada, Population growth, Real Estate, Regulatory Moat | Login |
| Sep 1, 2023 | Fund Letters | Adestella Investment Management | UFPT | UFP Technologies | Health Care Equipment & Supplies | Health Care Equipment | Bull | NASDAQ | Family-owned Business, growth, Healthcare Equipment, Medical devices, Medtech, OEM Integration, secular growth, Single-Use Products, small-cap, Sterile Packaging | Login |
| Sep 1, 2023 | Fund Letters | Adestella Investment Management | MYRG | MYR Group | Capital Goods | Electrical Components & Equipment | Bull | NASDAQ | clean energy, data centers, Electrical Construction, Government Spending, Grid Infrastructure, infrastructure investment, secular growth, solar projects, Transmission Distribution, utilities | Login |
| Jun 1, 2023 | Fund Letters | Adestella Investment Management | SDI.L | SDI Group | Health Care Equipment & Services | Health Care Equipment | Bull | AIM | cash generation, Industrial Equipment, life sciences, M&A, Niche markets, Rollup, scientific instruments, UK, Value | Login |
| Jun 1, 2023 | Fund Letters | Adestella Investment Management | VRLA.PA | Verallia | Materials | Containers & Packaging | Bull | Euronext Paris | Beverages, consolidation, defensive, Europe, Glass packaging, premium products, Pricing power, Spirits, Value, Wine | Login |
| TICKER | COMMENTARY |
|---|---|
| NBIS | Nebius, our tech conglomerate with a focus on data center operations, more than doubled in 2025 on strong rental demand for its massive GPU compute clusters. In total it added more than 3% to the Fund, making it the largest contributor of 2025. After multiple ARR guidance hikes in the first half of the year, the company signed a breakthrough $17.4 B deal with Microsoft in September that effectively sold out all of its near-term capacity and confirmed its position as a Tier 1 hyperscaler. A month later, autonomous vehicle subsidiary Avride announced a deal with Uber, further validating its contribution to the firm's SOTP equity value. While we trimmed our position multiple times as the stock drifted upwards, strong operational performance has earned NBIS a continued place in the portfolio. |
| PSIX | Power Solutions manufactures engines across a variety of fuel types and displacement levels. The company experienced a surge of demand in 2025 from the rapid growth of data centers and their attendant power requirements. At the time of our purchase, the stock traded for about 8x 2025 earnings despite reporting 100%+ EPS growth and experiencing a massive expansion of its investor base via a Nasdaq uplisting and subsequent index inclusions. We exited the position this spring after it became clear that this growth was more cyclical than structural; data center operators are now looking for more robust long-term solutions for power as opposed to ones (like PSIX's generators) that can quickly come online, and the shareholder base expansion story had played out. While we did not manage to time our sales perfectly, our weighted average sale price was roughly 2.5x our cost basis. |
| BELF.B | Bel Fuse, an electronic component manufacturer, was a rather straightforward valuation play. We purchased our shares in the fall of 2023 based on the simple thesis that the quality of the business (industry-leading margins and returns on capital) and the outlook for its end markets warranted a higher multiple than 6x trailing EBITDA. The market eventually agreed with us, and by the time of our final sale, the trailing multiple was north of 20x. Thus, despite 'only' 40% cumulative EBITDA growth over our holding period, we exited the position with a triple, once again underscoring the importance of valuation discipline in an investment process. While in hindsight we exited too early, I don't feel bad about redirecting capital into superior risk-reward opportunities when the whims of Mr. Market present the opportunity. |
| PAR | Par was our biggest detractor of the year. We entered the year with high hopes that the transition to a pure-play restaurant software business and cleaner investment story would provide a catalyst for the rerating of shares. The shares did rerate, but not in the direction we wanted. Delays in the expansion of its Burger King POS rollout, a general pessimism in the software and payments spaces, and a lack of notable new deal announcements weighed on the shares. I would like to add on the weakness here, as I think the company's installed solutions are unlikely to be disintermediated; however, a series of questionable capital allocation decisions in recent months has kept me from pulling the trigger. I also am wary of thesis creep, and it now seems like the company has put all its eggs in the basket of signing a massive operator instead of putting its head down and adding a few smaller logos to maintain business momentum and generate interim cash flow. This is risky, to say the least, and not the bet we intended to make when we first purchased shares. At this point, we still hold our shares for the optionality of an announcement that would flip the currently horrible investor sentiment, but I must admit our patience is waning here. |
| RXO | Freight brokerage company RXO, another longtime holding, had a dismal year as a prolonged merger integration and persistent weakness in the freight market led to a steady decline in earnings revisions throughout the year. I misjudged the extent to which RXO was at the mercy of spot market spreads, and management's excuses for the poor performance rang hollow given reported results at peer companies. I also think that there is a material risk of structural margin compression across the industry as brokers see their traditional matching and coordination roles upended by new automation capabilities. Accordingly, we exited the position at a loss to recycle the capital into superior risk-reward opportunities. |
| LFMD | LifeMD is a small-cap telehealth company that caught our attention in the spring 2025. Our thesis was that the shares were trading at an attractive price given LFMD's inflecting profitability and robust growth outlook from its weight-management business following the proliferation of GLP-1s. Unfortunately, in the late summer management significantly cut its revenue and profit guidance just months after having raised them in its previous release. This development quickly destroyed our confidence in the market opportunity and financial targets we had initially underwrote (if management was so far offsides just three months out, we certainly couldn't project eighteen months out), so we decided to take the tax loss and move on. |
| DELL | Dell (DELL) is currently our largest holding. While most famous for their personal computers, Dell today is driven by a thriving Infrastructure Solutions Group (ISG) offering servers and networking products. Unsurprisingly, it has been a large beneficiary of AI compute trends, and its share price performance has reflected that. However, recent industry developments leave us confident that there is still substantial further upside from here. In recent years, companies like OpenAI and Anthropic were willing to subsidize these in a land grab for new users. However, as they both get closer to potential IPOs, the pressure to show improving profitability has made them materially less generous in recent months. At the same time these companies are more closely matching costs to usage, the demand for tokens is rising exponentially as focus has shifted away from chatbot-style AI to agentic AI that can orchestrate multi-step processes without needing prompting at every step. The potential productivity gains and cost savings from these workflow automations are clearly attractive to a wide range of companies (including ours). The problem is that these agents use a lot of tokens, leading to ballooning API invoices and forcing multiple prominent firms to rethink their AI spend plans. As the initial euphoria from the newfound capabilities wanes, efficiency considerations will take over. To leverage AI tools without breaking the bank, companies will adopt more efficient processes that consume fewer valuable tokens. We think a large part of the solution will be moving certain workloads that don't require frontier models in-house and to the edge. Many routine processes can be effectively handled by open models, which offer 90% of the performance at 13% of the cost and continue to improve at a rapid clip. Many large enterprises running the numbers will find they can save a significant amount within a year or two by using their own hardware as opposed to receiving an API bill every month. When they reach that conclusion, AI-optimized servers such as Dell's become an important component of capex budgets – a trend we've already seen begin in recent quarters. It's a bit of a full circle moment. A decade ago, enterprises migrated everything to the cloud and software was king; now, companies are re-adding on-prem capability and hardware reigns supreme. In FY 2026 (ending Jan. 2026), the ISG segment grew 40% and generated $61 B of sales, with $9 B coming from its AI-optimized servers. For the current fiscal year, the optimized servers alone are expected to generate $50 B in sales. Even with the growth drag from its PC segment, the company is forecasting 23-26% overall sales and earnings growth this fiscal year. Dell did indeed raise its guidance (far beyond my expectations), which was well received by the market, but even after updating the numerators and denominators for recent weeks, we think there is further upside to be had. We are now paying 22x earnings and 14x EBITDA, which is still cheap if we're correct about the runway still remaining the next few years. Insider alignment (founder Michael Dell is still the CEO and controls over 40% of the equity), a robust capital return program ($20 B buyback authorization with consistent execution), and a potential tailwind from recent legal issues regarding their largest AI server competitor, Super Micro Computer (SMCI), make the setup even more compelling. |
| TOST | Two of our current favorites are Toast (TOST) and Okta (OKTA). These companies each have two characteristics that protect them from spun-up homegrown solutions: they serve as systems of record that handle mission critical business functions, and they tend to work with proprietary data that cannot be easily replicated or substituted. Toast runs mission critical restaurant operations end-to-end: POS, payments, labor, & ordering. Inherent friction in restaurant industry from high labor turnover (frequent training / onboarding) makes industry well suited for standardized solutions. Toast owns transaction-level data: orders, tips, refunds, etc. and sees valuable guest loyalty data tied to repeat visits and spending patterns. |
| OKTA | Two of our current favorites are Toast (TOST) and Okta (OKTA). These companies each have two characteristics that protect them from spun-up homegrown solutions: they serve as systems of record that handle mission critical business functions, and they tend to work with proprietary data that cannot be easily replicated or substituted. Okta centralizes login, MFA, provisioning, and access policy across company apps and is the source of truth for employee permissions. Okta captures login, device, MFA, and access telemetry across entire organization and collects behavior and risk signals unique to its platform footprint. |
| AIR | Industry dynamics are currently favorable to manufacturers, particularly in the duopolistic widebody segment. One of the two players, Boeing, has had a long series of production challenges, and its deliveries are still below 2018 levels. While they and fellow duopoly member Airbus will of course continue to ramp up production, the costs and complexities of airplane assembly lines prevent anything more than gradual increases. In the meantime, global air traffic demand continues to grow. This dynamic has forced airlines to keep planes in service longer, which in turn drives increased demand for aftermarket products and services. These include upgrades both to avionics (such as shifting from manual to electronic circuit breakers) and to the passenger experience (premium cabin configurations, improved in-flight entertainment systems, etc.). Our favorite ways to play these trends are currently AAR Corp (AIR), Astronics (ATRO), and Innovative Aerosystems (ISSC). |
| ATRO | Industry dynamics are currently favorable to manufacturers, particularly in the duopolistic widebody segment. One of the two players, Boeing, has had a long series of production challenges, and its deliveries are still below 2018 levels. While they and fellow duopoly member Airbus will of course continue to ramp up production, the costs and complexities of airplane assembly lines prevent anything more than gradual increases. In the meantime, global air traffic demand continues to grow. This dynamic has forced airlines to keep planes in service longer, which in turn drives increased demand for aftermarket products and services. These include upgrades both to avionics (such as shifting from manual to electronic circuit breakers) and to the passenger experience (premium cabin configurations, improved in-flight entertainment systems, etc.). Our favorite ways to play these trends are currently AAR Corp (AIR), Astronics (ATRO), and Innovative Aerosystems (ISSC). |
| ISSC | Industry dynamics are currently favorable to manufacturers, particularly in the duopolistic widebody segment. One of the two players, Boeing, has had a long series of production challenges, and its deliveries are still below 2018 levels. While they and fellow duopoly member Airbus will of course continue to ramp up production, the costs and complexities of airplane assembly lines prevent anything more than gradual increases. In the meantime, global air traffic demand continues to grow. This dynamic has forced airlines to keep planes in service longer, which in turn drives increased demand for aftermarket products and services. These include upgrades both to avionics (such as shifting from manual to electronic circuit breakers) and to the passenger experience (premium cabin configurations, improved in-flight entertainment systems, etc.). Our favorite ways to play these trends are currently AAR Corp (AIR), Astronics (ATRO), and Innovative Aerosystems (ISSC). |
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