| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 15.8% | 3% | 3% |
Alluvial Fund returned 3.0% in Q1 2026 against flat benchmarks, navigating market volatility from the Iran War while maintaining focus on deeply undervalued small-cap securities. The fund's defensive positioning in staple foods, cleaning products, and communications provided protection during geopolitical uncertainty. Key wins included Peakstone Realty Trust's acquisition by Brookfield at $21 per share, validating the unpopular real estate theme that has worked well for the fund. McDermott International continues its turnaround with 38% EBITDA growth in 2025 despite Middle East disruptions, while McBride successfully passes through price increases and expands via acquisition. Challenges emerged at FitLife Brands due to Amazon algorithm changes affecting legacy product visibility. The manager views recent small-cap exuberance as premature but remains positioned to capitalize on opportunities, holding cash for deployment if geopolitical strife continues. The strategy of investing in boring, overlooked businesses with predictable cash flows continues to drive long-term outperformance versus benchmarks.
Alluvial Fund focuses on investing in unpopular, overlooked, and misunderstood small-cap securities trading at deep discounts to fair value, with a preference for boring businesses with predictable cash flows that provide essential products and services.
The manager expects that if the worst of the Iran conflict is behind us, market enthusiasm will eventually extend to the sleepier names in the portfolio. If more strife lies ahead, the fund has cash to take advantage of opportunities. The manager remains focused on buying deeply undervalued securities and having faith that the market will eventually recognize their value, whether it takes weeks or years.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 28 2026 | 2026 Q1 | EACO, FTLF, GMS.L, MCB.L, MDR, PKST, TALEN, ZEGN.L | Consumer Staples, distressed, energy, Geopolitical, real estate, small caps, turnaround, value |
EACO FTLF MCD GMS.L |
Alluvial Fund delivered 3.0% returns in Q1 2026 despite Iran War volatility, benefiting from defensive positioning and the Peakstone REIT acquisition. The manager sees recent small-cap euphoria as premature but remains focused on deeply undervalued securities with predictable cash flows, holding cash for opportunities while continuing the successful strategy of investing in unpopular, overlooked businesses. |
| Feb 2 2026 | 2025 Q4 | CRAW, EAC, FTLF, GTX, IFOS, MBR.L, MDR, NLOP, SLVM, TLN | Buybacks, dividends, Europe, industrials, materials, small caps, Telecommunications, value |
ZEG LN CRAWA GTX MCB LN NLOP SLVM MCDIF |
Alluvial Fund achieved 41.2% returns in 2025 through value investing in defensive companies like telecommunications, industrials, and materials rather than chasing AI trends. Major wins included Zegona's successful Vodafone Spain turnaround and Crawford United's 7x acquisition exit. The manager maintains conviction in deeply undervalued, quality companies while expanding into new opportunities like phosphate fertilizers and paper manufacturing. |
| Oct 22 2025 | 2025 Q3 | CRAWA, EACO, FLTB, GTX, MAA, RGTI, SENEA, TLN | Communications, contrarian, Europe, REITs, small caps, value |
ZEG LN FTLF MCB LN NLOP CBL ZEG LN FTLF MCB LN NLOP CBL |
Alluvial Fund posted strong Q3 returns of 15.5% by focusing on undervalued companies with tangible assets versus speculative market darlings. Largest holding Zegona Communications executing successful fiber asset sales with more upside expected. Portfolio includes out-of-favor REITs trading at attractive valuations and Expert Markets securities offering high yields. Manager emphasizes downside protection through fundamental value investing. |
| Jul 27 2025 | 2025 Q2 | CBL, CUC, FITB, GTX, MCB.L, MCEM, NEWP.MI, NLOP, PKST, SENEA, SRC.L, TLN, WISH, ZEGN.L | energy, Europe, Food, real estate, small caps, special situations, value |
TLNE ZEG LN MCB LN SENEA SRC LN NLOP PKST CBL WISH |
Alluvial Fund posted 8.5% Q2 returns and 15.6% year-to-date by focusing on deeply undervalued, cash-generating businesses. Major contributor Talen Energy secured long-term Amazon datacenter contract while commercial real estate holdings progress through restructuring. Added European food consolidator NewPrinces and lime producer SigmaRoc. Increasing special situations allocation given market speculation. |
| Apr 21 2025 | 2025 Q1 | AAPL, CBL, CUWI, FTLF, GOOG, GTX, MCEM, SENEA, TLN | international, materials, real estate, small caps, Trade Policy, value |
ZEG.L MCB.L NLOP |
Alluvial Fund gained 6.5% in Q1 while small-cap benchmarks fell sharply, driven by strong performance from UK holdings Zegona Communications and McBride. The fund maintains low tariff exposure through international diversification and continues executing value strategies in discounted commercial real estate and cement companies, positioning for long-term outperformance amid US policy uncertainty. |
| Jan 24 2025 | 2024 Q4 | CBL, CRAWA, CSOL, FITB, GTX, MCB.L, MRC, NLOP, SENEA, TITC.AT, TLN, UBAL, ZEGN.L | Buybacks, Cement, Commercial real estate, international, small caps, value |
NLOP ZEG.L MCB.L TITC.AT CBL |
Alluvial Fund delivered 16.4% returns in 2024 through disciplined value investing in small-cap securities. Portfolio concentrated in deeply discounted holdings like Net Lease Office Properties liquidation and new cement/commercial real estate positions. Multiple companies executing shareholder-friendly capital allocation. Manager maintains patient, diversified approach targeting quality businesses with strong balance sheets trading below intrinsic value. |
| Oct 29 2024 | 2024 Q3 | BAHN.ST, CRAWA, FTLF, MCB.L, MRC, RWWI, TLN, UNID.MI, ZEG.L | Commercial real estate, Europe, international, small caps, Turnarounds, value |
ZEG.L BAHN.ST |
Alluvial Fund's value-focused approach targets boring, profitable companies in overlooked European markets. New holdings Zegona Communications and Bahnhof AB exemplify the strategy of finding undervalued businesses with strong fundamentals. The portfolio is positioned for European market revaluation and commercial real estate recovery, with patient capital deployed across cash-generating companies led by well-incentivized management teams. |
| Jul 24 2024 | 2024 Q2 | CRAWA, FLFB, GTX, MCB.L, MRC, RWWI, SCCO, SENEA, SXP.TO, TLN, UBNC | Community Banks, Micro Cap, real estate, small caps, special situations, Turnarounds, value |
NLOP MCB.L TLN UBNC SENEA SXP.TO |
Alluvial Fund gained 3.9% in Q2 while small-cap benchmarks declined, bringing YTD returns to 10.4%. Manager maintains conviction in small-cap value despite five years of underperformance, citing historical precedent for cycle reversals. Portfolio concentrated in deeply discounted companies like Net Lease Office Properties and McBride trading at significant discounts to intrinsic value. |
| May 14 2024 | 2024 Q1 | CRAWA, FRAG.MX, FTLF, GTX, HERDEZ.MX, HMM.TO, MCB.L, MRC, NLOP, SCAB.ST, SENEA, TLN, UNI.MI | Buybacks, Europe, Hotels, Mexico, small caps, value |
MCB.L SCAB.ST |
Alluvial Fund outperformed in Q1 with 6.3% returns, selling P10 Inc. and adding European value plays McBride and Scandic Hotels plus Mexican growth stories. Strong performance from existing holdings including Garrett Motion's aggressive buybacks and Crawford United's industrial strength. Fund closing to new investors while maintaining focus on undervalued small-caps with revaluation catalysts. |
| Jan 25 2024 | 2023 Q4 | CRAWA, FITL, LGT.TO, MRC, NLOP, SENEA | banks, REITs, small caps, special situations, Spin-Offs, value |
NLOP FTLF CRAWA AMRC |
Alluvial delivered strong 2023 returns through disciplined value investing in small-cap special situations. The fund capitalizes on spin-offs like NLOP, undervalued community banks, and companies with active buyback programs. Manager maintains conviction in cash-generating businesses at deep discounts while avoiding speculative investments despite renewed market enthusiasm for high-multiple growth stocks. |
| Oct 24 2023 | 2023 Q3 | FTLF, HMM.TO, LGT.B.TO, MCEM, PX, SENEA, TLN | Data centers, interest rates, nuclear, small caps, special situations, value |
MCEM ATLN.L HMM.TO SENEA |
Alluvial Fund outperformed dramatically in Q3 despite a 1.1% decline, beating small-cap benchmarks by 400-700 basis points. Rising interest rates are creating opportunities in high-quality, debt-free small companies trading at attractive valuations. New investments include nuclear power company Talen Energy and cement producer Monarch Cement, both offering compelling risk-adjusted returns in defensive business models. |
| Jul 15 2023 | 2023 Q2 | CRAWA, EACO, FTLF, HPS.TO, LGT.TO, PREQ, PX, RWWI, SXP.TO, UNI.MI | Canada, industrials, infrastructure, Logistics, Microcap, small caps, value | LGT.TO | Alluvial Fund outperformed with 9.0% Q2 returns by focusing on small, profitable companies at reasonable valuations while avoiding hyper-growth stocks at extreme multiples. Key positions include Logistec Corp entering sales process and infrastructure beneficiaries Hammond Power and Preformed Line Products. Manager maintains conviction in small-cap value despite market preference for growth. |
| Apr 25 2023 | 2023 Q1 | EACO, GTX, HPS.TO, PCOM, PX, SUM.TO | Banking, Canada, Liquidations, Poland, small cap, special situations, value |
HPS.TO AMPX UNI.MI EACO SKYT |
Alluvial Fund gained 3.6% in Q1 despite banking volatility, outperforming small-cap indices. Manager sees exceptional value opportunities in overlooked small-caps, adding Canadian transformer manufacturer Hammond Power Solutions benefiting from electrification trends. Special situations and liquidations contributed positively. Community bank holdings weathered crisis well while regional banks struggled. Disciplined approach continues targeting quality at deep discounts. |
| Oct 1 2023 | 2022 Q4 | 6KF GR, FTLF, GTXAP, JOB, PX, RVIC, SUMXF, UD IM | - | - | |
| Oct 10 2022 | 2022 Q3 | BFC, CBOBA, GTX, HRBR, JOB, PX, UBAB, UD IM | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
Commercial Real EstateThe fund has profited from unpopular real estate investments, particularly Peakstone Realty Trust which was acquired by Brookfield for $21 per share. Other holdings like Net Lease Office Properties and CBL & Associates have delivered excellent returns. The manager believes the post-Covid distressed commercial real estate cycle has largely played out. |
REIT Industrial Office Distressed Liquidation |
EnergyThe Iran War has created volatility in energy markets and affected portfolio holdings like McDermott International and Gulf Marine Services. McDermott expects EBITDA growth despite Middle East disruptions, while Gulf Marine Services saw vessels evacuated from Qatari waters but the manager views this as a temporary headwind creating buying opportunities. |
Oil Gas Middle East Geopolitical Offshore | |
Consumer StaplesHoldings in staple foods, cleaning products, and communications are viewed as protective during economic stress. McBride plc, a producer of soaps and detergents, has been successful in passing on price increases and announced an acquisition of Eurotab to expand operations and improve margins. |
Defensive Pricing Power Necessities Resilient Margins | |
E-commerceFitLife Brands faced challenges when Amazon's algorithm changes reduced visibility for legacy products, causing an 18% decline in cash contribution. However, the company's Irwin Naturals acquisition is building online sales successfully, reaching $800,000 in monthly sales by March. |
Amazon Algorithm Online Sales Digital Platform | |
| 2025 Q4 |
OilOil represents the cheapest major asset class globally, trading at near-record lows relative to gold despite balanced fundamentals. The closure of the Straits of Hormuz has created the largest supply shock in industry history, with 20 million barrels per day disrupted. Non-OPEC supply growth is slowing dramatically, with U.S. shale production plateauing outside the Permian Basin. |
Crude Oil Brent WTI Shale OPEC |
Natural GasNatural gas ranks in the 99.5th percentile of historical undervaluation relative to equities. U.S. production growth has concentrated entirely in the Permian Basin, with other shale regions declining. Once the Permian's current gas production surge runs its course, supply growth should plateau and eventually decline, setting the stage for materially higher prices. |
Henry Hub LNG Shale Gas Permian | |
SilverSilver surged 51% in Q4 and over 140% for the year, staging a dramatic catch-up rally relative to gold. This magnitude of silver outperformance has historically marked important turning points, suggesting a sell signal for precious metals in the short term. The rally parallels previous episodes in 1973, 1979, 2011, and 2020 that preceded corrections. |
Silver Gold Ratio Precious Metals | |
Platinum Group MetalsPGMs continued their powerful advance with platinum and palladium each surging 28% in Q4. Policy reversals in both the U.S. and Europe are unwinding the aggressive push toward electric vehicles, supporting longer-term demand for internal combustion engines and auto-catalysts. The bearish narrative built on rapid EV adoption is being rewritten. |
Platinum Palladium Auto Catalysts ICE | |
CopperCopper gained 17% in Q4 and 41% for the year, but the market has moved back into surplus as reflected in rising exchange inventories. Inventories now exceed 1.2 million tonnes, levels last seen in 2003 when copper traded below $0.90 per pound. The firm has shifted from short-term bullish to bearish on copper. |
Copper Base Metals Inventories | |
CommoditiesThe commodity bull market has barely begun, with most commodities still 46% below historical nominal peaks and 73% below real peaks when adjusted for inflation. Commodities trade near the lowest levels relative to equities in over a century, suggesting the cycle is in early innings rather than late stages. |
Commodity Cycle Capital Cycle Valuation | |
UraniumUranium demand is surging while meeting a fragile supply base, creating fundamental tightness in the market. The theme represents one of the key supply-demand imbalances in the commodity complex, though uranium prices were largely unchanged in Q4. |
Uranium Nuclear Supply Demand | |
| 2025 Q3 |
ValueManager emphasizes investing in companies with durable cash flows, valuable assets, and healthy balance sheets rather than speculative companies without revenue. Contrasts Rigetti Computing trading at 2,000x revenue with Mid-America Apartment Communities owning tangible apartments producing real cash flows. |
Assets Cash Flow Balance Sheet Undervalued Tangible |
Real EstateFund maintains 11% allocation to REITs in out-of-favor sectors including Net Lease Office Properties and CBL. Manager sees value in office properties despite sentiment challenges, with Net Lease trading at 18% cap rate and $87 per square foot. |
REITs Office Cap Rate Property Sales Malls | |
CommunicationsLargest position Zegona Communications executing successful asset sales of fiber optic networks, crystallizing value and enabling special dividends. Manager sees 50%+ upside despite strong performance as company focuses on operational improvements and potential additional asset sales. |
Fiber Asset Sales Telecom Infrastructure Networks | |
| 2025 Q2 |
Data CentersTalen Energy announced a major agreement with Amazon to provide 1,920 megawatts of nuclear power to Amazon datacenters through 2042, providing highly valuable long-term earnings stream. The company is shifting from merchant power production toward providing clean energy to datacenters on long-term contracts, with investors valuing shares more like a quasi-regulated utility. |
Nuclear Power Amazon Contracts Utilities |
Commercial Real EstateOut-of-favor commercial real estate continues as a portfolio theme with Net Lease Office Properties eliminating corporate debt and poised to return capital, PeakStone Realty transitioning to industrial outdoor storage REIT, and CBL Properties reducing leverage. The manager sees significant value in these distressed real estate situations. |
REITs Office Industrial Leverage Value | |
FoodNewPrinces is becoming a pan-European leader in branded foods through acquisitions of small food divisions from larger companies like Kraft Heinz. Seneca Foods represents boring yet profitable canned food operations with normalized balance sheet after reducing borrowings by $259 million following harvest cycles. |
Acquisitions Brands Canned Europe Consolidation | |
ValueThe fund focuses on deeply undervalued securities well off the radar of most investors, including basic businesses with predictable cash flows and strong balance sheets. The manager emphasizes buying boring and little-known yet highly profitable companies trading at attractive valuations. |
Undervalued Cash Flow Balance Sheet Boring Profitable | |
| 2025 Q1 |
Commercial Real EstateThe fund continues to execute well in deeply discounted real estate across struggling sectors including office properties and malls. Net Lease Office Properties is marketing buildings for sale including the Binoculars Building leased to Google through 2030, while Peakstone Realty is diversifying into industrial properties. CBL properties is improving its mall portfolio by selling marginal assets and reinvesting in stronger properties. |
Office Malls Industrial Net Lease Asset Sales |
CementThe cement industry has been a major contributor to recent returns with four different producers in different regions. Titan Cement successfully listed its American operations and plans to return proceeds as special dividend, while Monarch Cement pushed through an 8% price increase in January. Both companies still trade at substantial discounts to fair value despite pricing power and good utilization expected for years due to underinvestment following the Financial Crisis. |
Pricing Power Construction Materials Underinvestment Utilization | |
Trade PolicyThe chaotic approach to tariffs is toxic to the business environment as rules change weekly or daily, causing businesses to minimize discretionary spending until stability prevails. The fund has low direct exposure to tariffs with many companies having no US presence or using little US products in supply chains, though some companies like Garrett Motion and FitLife Brands may face challenges if EU and China tariffs are not resolved. |
Tariffs Supply Chain Economic Isolationism Business Environment Uncertainty | |
ValueThe manager demonstrates a value approach by buying deeply discounted assets in out-of-favor sectors, believing every asset has its price. Examples include UK companies like McBride trading at only 6x operating income despite strong fundamentals, and real estate holdings offering cash flow yields north of 20% while trading at significant discounts to net asset value. |
Discount Undervalued Out-of-favor Cash Flow Yield Net Asset Value | |
| 2024 Q4 |
Commercial Real EstateManager holds Net Lease Office Properties in ongoing liquidation, CBL & Associates Properties as mall operator recovery play, and views these as expressions of long-term commercial property recovery theme. Despite office market headwinds and interest rate challenges, expects value realization through asset sales and improving sentiment. |
Office Malls REITs Liquidation Recovery |
ValuePortfolio concentrated in deeply discounted securities trading below intrinsic value estimates. Manager emphasizes buying quality small companies with illiquid shares at attractive valuations, citing examples like Crawford United generating 20% ROE while trading at single-digit P/E multiples. |
Discount Intrinsic Value Illiquid Quality ROE | |
CementNew position in Titan Cement International SA reflects ongoing cement theme. Manager notes wave of infrastructure investment and underinvestment in domestic capacity creating favorable conditions for US cement producers, while European cement companies trade at significant discounts. |
Infrastructure Capacity Valuation Europe US | |
BuybacksMultiple holdings actively repurchasing shares including Garrett Motion dedicating nearly all free cash flow to repurchases and United Bancorporation negotiating creative share buyback from employee plan. Manager views buybacks as value-creating catalyst for undervalued positions. |
Share Count Free Cash Flow Accretive Treasury Value Creation | |
| 2024 Q3 |
Commercial Real EstateManager believes commercial real estate isn't dead despite market pessimism. While future office demand may be permanently lower due to technological and demographic changes, the market is overreacting to the pace of change. Marginal buildings will be demolished or repurposed, lease rates will decline, markets will stabilize, and buildings will become financeable again. |
Office REITs Distressed Recovery Valuation |
ValuePortfolio focuses on finding cheap securities trading below intrinsic value. Manager emphasizes investing in boring, profitable companies with strong cash generation that are overlooked by the market. European markets remain modestly valued compared to expensive US markets, creating opportunities for patient value investors. |
Undervalued Intrinsic Value Discount Cheap Overlooked | |
EuropeLarge allocation to non-US markets, particularly Europe, where companies remain modestly valued while US markets trade at extreme valuations. European economy's stock market cap to GDP ratio hasn't changed much since 2014, while US has doubled from 115% to over 200%. Manager expects the valuation gap to eventually narrow. |
European Markets Valuation Gap International Undervalued Opportunity | |
| 2024 Q2 |
Small CapsManager discusses the prolonged underperformance of small-cap stocks versus large-cap peers, noting small-caps have delivered total returns nearly 50% behind the S&P 500 over the last 5 years. He draws historical parallels to 1995-1999 when large-caps crushed small-caps, followed by small-cap outperformance from 2000-2004. The manager suggests questioning consensus when investors exclaim Why invest in anything else about an asset class. |
Value Outperformance Cycles Consensus Opportunity |
ValueThe portfolio demonstrates classic value investing with holdings trading at significant discounts to intrinsic value. Net Lease Office Properties trades at a 17.9% cap rate and $90 per square foot, described as just plain dirt cheap. McBride trades at only 5.4x trailing operating income and 4.4x EBITDA despite strong fundamentals. United Bancorporation trades at 5.7x trailing earnings and 80% of adjusted tangible book value. |
Discount Cheap Undervalued Cap Rate Multiples | |
TurnaroundsMcBride represents a turnaround story well into its recovery from losses caused by inflationary pressures and supply chain challenges. The company has restored profitability through cost-cutting measures and is generating significant cash flow to reduce debt and resume dividends. Talen Energy is described as one of those too-rare cases where everything goes according to plan in its transformation. |
Recovery Restructuring Profitability Cost Cutting Transformation | |
Community BanksThe manager maintains a collection of various banks, mainly ECIP recipients, which are quietly having a good year. He emphasizes that community banks really are a different kind of animal compared to regional banks that faced depositor flight concerns in 2023. United Bancorporation of Alabama has excelled in developing specialty loan offerings and grant-subsidized business lines, resulting in record earnings and return on equity. |
ECIP Specialty Lending ROE Deposits Regional | |
Real EstateNet Lease Office Properties remains the largest holding as it actively winds down through property sales and debt reduction. The company sold five properties and surrendered two to lenders, using proceeds to reduce term loan by $138 million and mezzanine debt by $22 million. Since going public, NLOP has reduced its term loan and mezzanine debt by 47% to $243 million, leaving it modestly levered and highly cash-generating. |
Liquidation Debt Reduction Office Cap Rate Wind Down | |
| 2024 Q1 |
ValueManager focuses on undervalued opportunities across multiple holdings including McBride trading at 4.4x EBITDA, Scandic Hotels offering double-digit free cash flow yield, and Hammond Manufacturing at 6.4x earnings. Portfolio emphasizes companies trading below intrinsic value with clear catalysts for revaluation. |
Undervalued Discount Bargain Cheap Mispriced |
HotelsNew position in Scandic Hotels represents recovery play in Nordic hotel market. Company operates 280 hotels with variable lease structure reducing operating leverage. Post-COVID revenues at record highs while shares trade below pre-pandemic levels, offering attractive entry point. |
Hospitality Travel Recovery Nordic Leisure | |
MexicoLong-term bullish on Mexico due to positive demographics, growing middle class, and reshoring benefits as US manufacturers reduce China dependency. Invested in Grupo Herdez consumer goods and Corporativo Fragua pharmacy chain as exposure to domestic consumption growth. |
Emerging Markets Demographics Reshoring Consumption Growth | |
BuybacksMultiple portfolio companies actively returning capital through share repurchases. Garrett Motion used nearly all 2024 free cash flow to buy back 10 million shares for $90 million. Hammond Manufacturing also benefiting from capital return programs. |
Capital Return Repurchases Shareholder Returns Cash Flow Value Creation | |
| 2023 Q4 |
Commercial Real EstateManager invested heavily in Net Lease Office Properties (NLOP), a spin-off REIT designed to liquidate office assets. Despite office market pressures from work-from-home policies, NLOP trades at significant discount to conservative asset values and has built-in liquidation catalyst. |
Office REIT Liquidation Spin-off Asset Sales |
Community BanksFund holds various community banks trading at extremely attractive valuations, many with price-to-earnings multiples under 5 and less than 60% of tangible book value. Manager sees value in illiquid bank shares as long as underlying institutions maintain strong lending standards. |
Banks Illiquid Book Value Dividends Acquisition | |
BuybacksMultiple portfolio companies engaged in share repurchases including Crawford United authorizing buyback of 8.5% of shares outstanding, Seneca Foods reducing shares by 6%, and LICT repurchasing 8.6% over three years. Manager views buybacks at low multiples as excellent capital allocation. |
Share Repurchase Capital Allocation Valuation Management | |
| 2023 Q3 |
NuclearTalen Energy owns the Susquehanna Steam Electric Station, a two-unit nuclear power plant with 2.5 gigawatts of capacity. The Inflation Reduction Act provides supports and subsidies for nuclear power production, creating a de-risked business model for Talen. Nuclear plants could be desirable assets for larger regulated utilities looking to expand their renewables fleets. |
Nuclear Utilities Energy Transition Inflation Reduction Act Power Generation |
Data CentersTalen has a 95% stake in a new data center being built adjacent to the Susquehanna plant. There is strong interest in data centers powered by renewable energy sources. Hammond Manufacturing produces enclosures, cabinets, and racks for electrical applications that have seen great growth in demand thanks to the boom in data center construction. |
Data Centers Renewable Energy Electrical Equipment Infrastructure | |
Small CapsThe fund focuses on small-cap and micro-cap stocks, which have experienced significant underperformance. The Russell 2000 is 25% lower than its June 2021 peak and the Russell Micro-Cap Index is off 40%. The manager views this as creating opportunities in high-quality holdings at attractive valuations. |
Small Caps Value Market Dislocation Opportunity | |
RatesInterest rates are the driving force behind the re-evaluation of small-cap stocks. Now that cash earns a safe 5%, risky investments have lost their appeal. The repricing of maturing debt capital will be a headwind for companies that must access meaningful external capital. Rising rates also impacted the Logistec sale price. |
Interest Rates Cost of Capital Funding Environment Valuation | |
| 2023 Q2 |
Small CapsManager focuses on the smallest and least known profitable companies that are insufficiently researched, finding best opportunities in companies that remain tethered to reality beneath the several dozen companies that dominate financial media attention. The fund specializes in tiny opportunities and maintains this flexibility despite growing to $40 million in assets. |
Microcap Value Research |
LogisticsLogistec operates terminals at dozens of ports in Eastern Canada and the US, described as a great business with strong pricing power and consistent demand. The company has been profitable for 50+ years and is undergoing a sales process with expected value of $90+ per share versus current $65. |
Ports Terminals Infrastructure | |
Infrastructure SpendingHammond Power Solutions benefits from a wave of spending on infrastructure build-out and electrification that will continue for years. Preformed Line Products also benefits from the nation racing to upgrade power grids and expand broadband internet access, making it an auspicious time for the company. |
Electrification Power Grid | |
ValueManager sees no shortage of bargains in companies that remain tethered to reality, particularly in the smallest and least known firms. The fund finds companies trading at 6-7 times sustainable free cash flow while growth stocks trade at extreme multiples like 15x revenue for C3.ai. |
Bargains Undervalued Cash Flow | |
| 2023 Q1 |
Small CapsSmall company shares remain out-of-favor compared to large companies. The gulf between securities' trading prices and intrinsic values is as large as the manager has ever observed. Despite good Q4 2022 earnings, market reaction was muted. |
Small Cap Value Micro Cap |
Regional BanksBanking crisis caused 25% drop in regional banking index. Manager believes regional banks have the toughest path forward compared to mega-banks or community banks. Expects large banks and community banks to benefit from deposit flows leaving regional banks. |
Regional Banks Banking Credit Stress | |
Community BanksManager holds four well-capitalized community banks that received ECIP capital, making them some of the nation's best-capitalized banks. Believes community banks can build personal relationships and sticky deposit bases, and will capture surprising deposit flows. |
Community Banks Banking ECIP | |
Energy TransitionDemand for transformers has exploded as electrification of the world economy accelerates. Hammond Power Solutions runs factories at full capacity but cannot keep pace with orders, planning $40 million capacity investment. |
Electrification Transformers Grid Upgrade | |
PolandPolish securities offer some of the world's best valuations. Holdings include growing companies trading at attractive multiples. Market is volatile and prone to periods where mood overshadows results, but buying quality at great prices works given time. |
Poland Value Emerging Markets |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Sep 30, 2023 | Fund Letters | Alluvial Capital Management | MCEM | Monarch Cement Company | Materials | Construction Materials | Bull | NASDAQ | Cement, Cyclical, debt-free, dividend, family-controlled, infrastructure, materials, Value | Login |
| Sep 30, 2023 | Fund Letters | Alluvial Capital Management | ATLN.L | Talen Energy Corp | Utilities | Independent Power and Renewable Electricity Producers | Bull | OTC | clean energy, data center, Inflation Reduction Act, Nuclear, Post-Bankruptcy, Power generation, restructuring, utilities | Login |
| Sep 30, 2023 | Fund Letters | Alluvial Capital Management | HMM.TO | Hammond Manufacturing Corp | Industrials | Electrical Equipment | Bull | TSX | Canadian, Currency Hedge, data centers, electrical equipment, Electrification, Industrial, infrastructure, Value | Login |
| Sep 30, 2023 | Fund Letters | Alluvial Capital Management | SENEA | Seneca Foods | Consumer Staples | Packaged Foods | Bull | NASDAQ | Canned Vegetables, consumer staples, deep value, defensive, Food Processing, LIFO accounting, market structure, Share Buybacks | Login |
| Jun 30, 2023 | Fund Letters | Alluvial Capital Management | LGT.TO | Logistec Corporation | Industrials | Marine Ports & Services | Bull | Toronto Stock Exchange | Canada, Catalyst, environmental services, infrastructure, Marine Terminals, Port Operations, sale process, Special Situation, Value | Login |
| Jun 30, 2023 | Fund Letters | Alluvial Capital Management | - | Mechanics Bank of Richmond | Financials | Regional Banks | Bull | Expert Market (OTC) | acquisition target, banking, Catalyst, Expert Market, Ford Financial, illiquid, regional bank, Special Situation, Value | Login |
| Apr 28, 2026 | Fund Letters | Alluvial Capital Management | EACO | EACO Corp. | Electronics & Computer Distribution | Trading Companies & Distributors | Bull | - | Distributor, Electrical Components, Fasteners, growth, Industrial, OTC, turnaround, Value | Login |
| Apr 28, 2026 | Fund Letters | Alluvial Capital Management | FTLF | FitLife Brands Inc. | Packaged Foods | Personal Products | Neutral | NASDAQ | acquisition, Amazon, consumer staples, e-commerce, leverage, Nutritional Supplements, Sports Nutrition, turnaround | Login |
| Apr 28, 2026 | Fund Letters | Alluvial Capital Management | MCD | McDermott International Ltd. | Restaurants | Oil, Gas & Consumable Fuels | Bull | - | Bankruptcy, construction, EBITDA, energy, engineering, Middle East, Offshore, Refinancing, turnaround | Login |
| Apr 28, 2026 | Fund Letters | Alluvial Capital Management | GMS.L | Gulf Marine Services PLC | Oil & Gas Equipment & Services | Oil, Gas & Consumable Fuels | Bull | New York Stock Exchange | deleveraging, geopolitical, London-listed, Middle East, Offshore, Oil & Gas, renewable energy, Support Vessels, Value | Login |
| Feb 2, 2026 | Fund Letters | Dave Waters | ZEG LN | Zegona Communications plc | Communication Services | Telecom Services | Bull | New York Stock Exchange | asset sales, buybacks, capital returns, deleveraging, Telecom-Turnaround | Login |
| Feb 2, 2026 | Fund Letters | Dave Waters | CRAWA | Crawford United Corporation | Industrials | Industrial Conglomerates | Bull | New York Stock Exchange | conglomerate discount, Hidden-Assets, Industrials, M&A, valuation upside | Login |
| Feb 2, 2026 | Fund Letters | Dave Waters | GTX | Garrett Motion Inc. | Consumer Discretionary | Auto Parts | Bull | NASDAQ | Auto parts, buybacks, capital allocation, Ev-Transition, Free Cash Flow | Login |
| Feb 2, 2026 | Fund Letters | Dave Waters | MCB LN | McBride plc | Consumer Staples | Household Products | Bull | New York Stock Exchange | balance sheet, buybacks, consumer staples, dividends, valuation gap | Login |
| Feb 2, 2026 | Fund Letters | Dave Waters | NLOP | Net Lease Office Properties | Real Estate | Office REITs | Bull | New York Stock Exchange | Cap rates, capital returns, Liquidation, NAV discount, Property-Dispositions | Login |
| Feb 2, 2026 | Fund Letters | Dave Waters | SLVM | Sylvamo Corporation | Materials | Paper & Forest Products | Bull | New York Stock Exchange | Capacity-Reduction, Cyclicals, Free Cash Flow, industry consolidation, Paper | Login |
| Feb 2, 2026 | Fund Letters | Dave Waters | MCDIF | McDermott International Ltd. | Industrials | Engineering & Construction | Bull | Dubai Financial Market | backlog growth, energy infrastructure, operating leverage, Refinancing, turnaround | Login |
| Oct 22, 2025 | Fund Letters | Dave Waters | ZEG LN | Zegona Communications | Communication Services | Wireless Telecommunication Services | Bull | NYSE | asset sales, deleveraging, Fiber, monetization, Multiple arbitrage, Re-rating, Special dividend | Login |
| Oct 22, 2025 | Fund Letters | Dave Waters | FTLF | FitLife Brands | Consumer Staples | Personal Products | Bull | NASDAQ | acquisition, brand portfolio, consolidation, Distribution, Execution, Free Cash Flow, Roll-up | Login |
| Oct 22, 2025 | Fund Letters | Dave Waters | MCB LN | McBride plc | Financials | Household Products | Bull | NYSE | dividend, Europe, Margins, Private-label, rerating, takeover, valuation | Login |
| Oct 22, 2025 | Fund Letters | Dave Waters | NLOP | Net Lease Office Properties | Real Estate | Office REIT | Bull | NYSE | asset sales, cap rate, deleveraging, Dispositions, NAV discount, Office, REIT | Login |
| Oct 22, 2025 | Fund Letters | Dave Waters | CBL | CBL & Associates Properties | Real Estate | Retail REIT | Bull | NYSE | deleveraging, Distributions, FFO, Float, Malls, Refinancing, Retail real estate | Login |
| Oct 22, 2025 | Fund Letters | Dave Waters | ZEG LN | Zegona Communications | Communication Services | Wireless Telecommunication Services | Bull | NYSE | asset sales, deleveraging, Fiber, monetization, Multiple arbitrage, Re-rating, Special dividend | Login |
| Oct 22, 2025 | Fund Letters | Dave Waters | FTLF | FitLife Brands | Consumer Staples | Personal Products | Bull | NASDAQ | acquisition, brand portfolio, consolidation, Distribution, Execution, Free Cash Flow, Roll-up | Login |
| Oct 22, 2025 | Fund Letters | Dave Waters | MCB LN | McBride plc | Financials | Household Products | Bull | NYSE | dividend, Europe, Margins, Private-label, rerating, takeover, valuation | Login |
| Oct 22, 2025 | Fund Letters | Dave Waters | NLOP | Net Lease Office Properties | Real Estate | Office REIT | Bull | NYSE | asset sales, cap rate, deleveraging, Dispositions, NAV discount, Office, REIT | Login |
| Oct 22, 2025 | Fund Letters | Dave Waters | CBL | CBL & Associates Properties | Real Estate | Retail REIT | Bull | NYSE | deleveraging, Distributions, FFO, Float, Malls, Refinancing, Retail real estate | Login |
| Jul 27, 2025 | Fund Letters | Dave Waters | TLNE | Talen Energy, Corp. | Other | Independent Power Producers & Energy Traders | Bull | - | Contracts, data centers, Free Cash Flow, Nuclear, utilities | Login |
| Jul 27, 2025 | Fund Letters | Dave Waters | ZEG LN | Zegona Communications plc | Communication Services | Integrated Telecommunication Services | Bull | NYSE | cash flow, corporate actions, Fiber, restructuring, Telecom | Login |
| Jul 27, 2025 | Fund Letters | Dave Waters | MCB LN | McBride plc | Financials | Household Products | Bull | NYSE | Automation, Detergents, dividends, Margins, Private-label | Login |
| Jul 27, 2025 | Fund Letters | Dave Waters | SENEA | Seneca Foods, Corp. | Consumer Staples | Packaged Foods & Meats | Bull | NASDAQ | agriculture, Canned food, consolidation, deleveraging, working capital | Login |
| Jul 27, 2025 | Fund Letters | Dave Waters | SRC LN | SigmaRoc plc | Materials | Construction Materials | Bull | NYSE | Acquisitions, construction, infrastructure, Lime, Pricing power | Login |
| Jul 27, 2025 | Fund Letters | Dave Waters | NLOP | Net Lease Office Properties | Real Estate | Office REITs | Bull | NYSE | asset sales, cap rate, Liquidation, Office, REIT | Login |
| Jul 27, 2025 | Fund Letters | Dave Waters | PKST | PeakStone Realty Trust | Real Estate | Industrial REITs | Bull | NYSE | deleveraging, Free Cash Flow, Industrial, net asset value, REIT | Login |
| Jul 27, 2025 | Fund Letters | Dave Waters | CBL | CBL & Associates Properties, Inc. | Real Estate | Retail REITs | Bull | NYSE | leverage, Malls, Refinancing, Retail real estate, Turnarounds | Login |
| Jul 27, 2025 | Fund Letters | Dave Waters | WISH | ContextLogic, Inc. | Materials | Internet & Direct Marketing Retail | Bull | - | acquisition, cash, downside protection, NOLs, Special situations | Login |
| Mar 31, 2025 | Fund Letters | Alluvial Capital Management | ZEG.L | Zegona Communications plc | Communication Services | Integrated Telecommunication Services | Bull | London Stock Exchange | Asset Sale, capital return, deleveraging, Fiber Optic, leveraged buyout, Spain, telecommunications, turnaround | Login |
| Mar 31, 2025 | Fund Letters | Alluvial Capital Management | MCB.L | McBride plc | Consumer Staples | Household Products | Bull | London Stock Exchange | consumer staples, defensive, dividend, household products, Institutional Selling, low valuation, UK, Value | Login |
| Mar 31, 2025 | Fund Letters | Alluvial Capital Management | NLOP | Net Lease Office Properties | Real Estate | Office REITs | Bull | NASDAQ | asset sales, Cash distribution, deleveraging, Google Tenant, Liquidation Strategy, NAV discount, Office REIT, Real Estate | Login |
| Dec 31, 2024 | Fund Letters | Alluvial Capital Management | NLOP | Net Lease Office Properties | Real Estate | Office REITs | Bull | NASDAQ | asset sales, Cash distribution, debt reduction, Liquidation, Net Lease, office properties, Real Estate, REIT | Login |
| Dec 31, 2024 | Fund Letters | Alluvial Capital Management | ZEG.L | Zegona Communications plc | Communication Services | Integrated Telecommunication Services | Bull | London Stock Exchange | Asset Sale, debt reduction, Fiber Optics, LBO, Shareholder Distribution, Spain, telecommunications, turnaround | Login |
| Dec 31, 2024 | Fund Letters | Alluvial Capital Management | MCB.L | McBride plc | Consumer Staples | Household Products | Bull | London Stock Exchange | consumer staples, debt reduction, defensive, household products, Private-label, Trade-down, turnaround, UK | Login |
| Dec 31, 2024 | Fund Letters | Alluvial Capital Management | TITC.AT | Titan Cement International SA | Materials | Construction Materials | Bull | Athens Stock Exchange | Cement, EBITDA multiple, Greece, infrastructure, IPO, materials, US operations, valuation arbitrage | Login |
| Dec 31, 2024 | Fund Letters | Alluvial Capital Management | CBL | CBL & Associates Properties, Inc. | Real Estate | Retail REITs | Bull | NYSE | Asset Consolidation, Bankruptcy Recovery, debt reduction, downside protection, Malls, Real Estate, REIT, retail properties | Login |
| Sep 30, 2024 | Fund Letters | Alluvial Capital Management | ZEG.L | Zegona Communications plc | Communication Services | Integrated Telecommunication Services | Bull | London Stock Exchange | Cost Reduction, Fiber networks, infrastructure, leveraged buyout, margin expansion, Operational Improvement, Spain, telecommunications, turnaround | Login |
| Sep 30, 2024 | Fund Letters | Alluvial Capital Management | BAHN.ST | Bahnhof AB | Communication Services | Internet Services & Infrastructure | Bull | Stockholm Stock Exchange | asset-light, capital efficiency, High Growth, Internet Service Provider, negative working capital, Nordic Expansion, recurring revenue, Sweden | Login |
| Jun 30, 2024 | Fund Letters | Alluvial Capital Management | NLOP | Net Lease Office Properties | Real Estate | Office REITs | Bull | NASDAQ | asset sales, cap rate, debt reduction, Liquidation, office properties, Real Estate, REIT, Value | Login |
| Jun 30, 2024 | Fund Letters | Alluvial Capital Management | MCB.L | McBride Plc | Consumer Staples | Household Products | Bull | London Stock Exchange | cash generation, consumer staples, cost-cutting, debt reduction, EBITDA, Private-label, turnaround, UK | Login |
| Jun 30, 2024 | Fund Letters | Alluvial Capital Management | TLN | Talen Energy | Utilities | Independent Power and Renewable Electricity Producers | Bull | NASDAQ | asset sales, capital allocation, energy, Low-Carbon, M&A Target, Nuclear Power, Share Buybacks, utilities | Login |
| Jun 30, 2024 | Fund Letters | Alluvial Capital Management | UBNC | United Bancorporation of Alabama | Financials | Regional Banks | Bull | OTC | Alabama, community bank, Grant Subsidized, regional bank, ROE, Specialty lending, tangible book, Value | Login |
| Jun 30, 2024 | Fund Letters | Alluvial Capital Management | SENEA | Seneca Foods | Consumer Staples | Packaged Foods | Bull | NASDAQ | Canned Vegetables, Capacity utilization, consumer staples, Free Cash Flow, industry consolidation, manufacturing, Packaged Foods | Login |
| Jun 30, 2024 | Fund Letters | Alluvial Capital Management | SXP.TO | Supremex | Materials | Paper & Forest Products | Bull | Toronto Stock Exchange | Canada, Cyclical, Envelopes, Free Cash Flow, Packaging, Share Buybacks, Trough Earnings, Value | Login |
| Mar 31, 2024 | Fund Letters | Alluvial Capital Management | MCB.L | McBride plc | Consumer Staples | Household Products | Bull | London Stock Exchange | consumer staples, deleveraging, Europe, household products, margin expansion, Private-label, turnaround, Value | Login |
| Mar 31, 2024 | Fund Letters | Alluvial Capital Management | SCAB.ST | Scandic Hotels Group AB | Consumer Discretionary | Hotels, Restaurants & Leisure | Bull | Nasdaq Stockholm | asset-light, Convertible Overhang, Europe, Hotels, Mid-market, Scandinavia, Travel Recovery, variable leases | Login |
| Mar 31, 2023 | Fund Letters | Alluvial Capital Management | HPS.TO | Hammond Power Solutions Inc. | Industrials | Electrical Equipment | Bull | TSX | Canadian, capacity expansion, debt-free, electrical equipment, Electrification, growth, Industrial, manufacturing, Transformers, Value | Login |
| Mar 31, 2023 | Fund Letters | Alluvial Capital Management | AMPX | P10 Inc. | Financials | Asset Management & Custody Banks | Bull | NYSE | alternative assets, asset management, AUM growth, private equity, recurring revenue, Share Buybacks, Value | Login |
| Mar 31, 2023 | Fund Letters | Alluvial Capital Management | UNI.MI | Unidata S.p.A. | Communication Services | Alternative Carriers | Bull | Borsa Italiana | acquisition, broadband, essential services, Fiber Optic, infrastructure, Italian, telecommunications, Undersea Cable, Value | Login |
| Mar 31, 2023 | Fund Letters | Alluvial Capital Management | EACO | EACO Corp. | Industrials | Trading Companies & Distributors | Bull | OTC | Electrical Components, Essential Products, Fasteners, growth, Industrial distribution, margin expansion, Sales Force, Value | Login |
| Mar 31, 2023 | Fund Letters | Alluvial Capital Management | SKYT | Skytop Lodge Corp. | Consumer Discretionary | Hotels, Resorts & Cruise Lines | Bull | OTC | Asset Play, cash flow, Historic Property, Hotel, Poconos, Real Estate, Resort, Tourism, Value | Login |
| Dec 31, 2023 | Fund Letters | Alluvial Capital Management | NLOP | Net Lease Office Properties | Real Estate | Office REITs | Bull | NYSE | asset sales, contrarian, debt reduction, Liquidation, Office, Real Estate, REIT, spin-off, Value | Login |
| Dec 31, 2023 | Fund Letters | Alluvial Capital Management | FTLF | FitLife Brands | Consumer Staples | Personal Products | Bull | OTCQB | acquisition, Bankruptcy, consumer staples, e-commerce, Nutrition, Roll-up, supplements, turnaround | Login |
| Dec 31, 2023 | Fund Letters | Alluvial Capital Management | CRAWA | Crawford United Corp. | Industrials | Industrial Machinery | Bull | OTCQX | acquisition, Aerospace, capital allocation, Industrial, manufacturing, Share Buyback, Value | Login |
| Dec 31, 2023 | Fund Letters | Alluvial Capital Management | AMRC | MRC Global Inc. | Energy | Oil & Gas Equipment & Services | Bull | NYSE | activist, Distribution, energy, Industrial, Oil & Gas, Sale Candidate, Special Situation, utilities | Login |
| TICKER | COMMENTARY |
|---|---|
| ZEGN.L | This section would not be complete without an update on our largest portfolio holding, Zegona Communications, whose shares have performed quite well year-to-date as the company executes a large share buyback. Following the sale of its fiber-optic networks, Zegona's focus is on driving revenue growth and margin improvement, as well as monetizing the remaining non-core assets. Rumors of a potential tie-up with Telefonica continue to circulate, but I do not expect a sale of Vodafone Spain in the short term. Despite the run-up, Zegona shares continue to trade at a discount to other European telecoms. I still see significant upside as operational improvements implemented in 2024 and 2025 become visible in operating results. Simply for purposes of risk management, we have sold some Zegona shares this month. As much as we love the opportunity, we cannot responsibly allow it to grow to be 20% or more of the portfolio. |
| MDR | Our other Mc-investment, McDermott International, is making good progress in its turnaround. McDermott is an energy engineering and construction firm with a long and storied history, but plenty of recent struggles. After entering bankruptcy in early 2020, McDermott emerged into the teeth of the Covid era with its deeply depressed oil prices and activity. Things were tough, but the company muddled through by selling assets, finishing up unprofitable contracts, and building toward a profitable future. 2025 was a great year for McDermott. The company reported EBITDA up 38% from 2024, strong cash flow, and good backlog development. And now, Iran. Not a pleasant environment for an oil & gas contractor with extensive operations in the Middle East. Fortunately, McDermott believes that disruptions and delays due to the war will be temporary and still expects a successful 2026. McDermott expects adjusted EBITDA to rise 21% this year to $520 million at a 6.5% margin. By year-end, the legacy fixed-price projects that proved so troublesome will be all but a memory, comprising only 1.4% of backlog. By 2028, McDermott hopes to produce EBITDA of $701 million at an 8% margin. On today's enterprise value of around $2 billion, the 2028 business plan would result in an EV/EBITDA multiple of 2.9x. |
| MCB.L | McBride plc., our British producer of soaps, detergents, and laundry powders, is thriving. The company announced it has been little affected by the war, noting that consumers keep right on buying necessities like laundry detergent under nearly any circumstances. McBride indicated it has been successful in passing on price increases, relieving the market's worries over input cost pressures. Earlier this month, McBride announced its intent to acquire Eurotab, a continental manufacturer of tablet format cleaning products like dishwasher tabs. The acquisition will relieve production bottlenecks, open new geographic markets, and increase earnings per share and margins by 2027. Shares responded well to the trading update and proposed acquisition but still trade at an extremely modest multiple of earnings and cash flow. |
| EACO | EACO Corp., a distributor of electrical components and fasteners, has been a quiet powerhouse for Alluvial Fund since we first bought shares several years ago. In fiscal 2019, EACO produced revenue of $221 million and operating income of $13 million. For the twelve trailing months, EACO's revenue has grown to $463 million. On the strength of improved margins and scale, operating income has grown to $49 million. EACO shares are up sixfold from our earliest purchases, but the company's valuation remains modest at 8.6x trailing operating income. We plan to hold our shares indefinitely, believing the company will eventually seek a higher profile through a share offering and a listing on a major exchange, or sell to a larger industrial distributor. Despite this success, Alluvial Fund brought a shareholder derivative lawsuit against EACO's board and CEO last year. Why? Simply put, we believed that the company overpaid for a warehouse it purchased from its CEO and majority shareholder. After much negotiation, our hardworking attorneys have achieved a proposed settlement that, if approved, will result in all EACO minority shareholders receiving a payment. |
| GMS.L | We recently took a position in Gulf Marine Services PLC, a London-listed owner of 15 self-elevating, self-propelled support vessels. These SESVs support all manner of offshore activity in the oil & gas and renewable energy sectors. Gulf Marine's fleet is one of the industry's youngest, and is chartered to a blue-chip roster of national oil companies and energy giants, mostly in the Middle East. To be clear, we did not buy Gulf Marine Services for its fleet. While good quality, there is nothing particularly unique about these vessels. We bought Gulf Marine Services because its shares trade at a giant discount to fair value thanks to the company's small size, strange listing status (London-listed, Abu Dhabi-based, operates in US Dollars), and checkered past. When hostilities broke out, Gulf Marine Services was forced to evacuate four of its SESVs operating in Qatari waters. Fearful that the company's vessels would be idled for months on end, investors sent GMS shares down 35% from their February peak. I see this decline as an opportunity to buy GMS shares while they are discounted due a headwind that while serious, will not be permanent. At under GBp 18 per share, the market is valuing GMS at an enterprise value of $430 million. |
| FTLF | Fourth quarter 2025 earnings reports from our portfolio holdings were very solid, with one notable exception. FitLife Brands reported disappointing figures, indicating challenges with legacy brands online sales had continued from the third quarter into the fourth. Essentially, changes to the Amazon product search algorithm directed fewer potential buyers to FitLife's legacy products. Also, sales and margins for the company's MusclePharm products were negatively affected by high whey protein prices. It all added up to a rough quarter, with cash contribution (gross profit less advertising expenses) from legacy products down 18% year-over-year. There is a bright spot. The company's August 2025 acquisition of Irwin Naturals is performing quite well, showing growth and generating cash well in excess of acquisition-related debt service costs. FitLife's troubles have caused its share price to tumble, reaching the mid-$9s as I write. FitLife shares do belong in the penalty box, but I think the market reaction is excessive. Even assuming a further 15% decrease in legacy brands cash contribution, I have the company at about 8.5x 2026 cash earnings. |
| PKST | In February, Alluvial Fund holding Peakstone Realty Trust agreed to be acquired by Brookfield Asset Management for $21 per share. While we were not counting on an acquisition for our Peakstone thesis to play out, we are very happy to sell our shares at an attractive price! Peakstone is a good example of an idea from a theme that has worked quite well for Alluvial: unpopular real estate. When we bought our Peakstone shares, I could have named half a dozen reasons not to: the trust owned an ungainly mix of offices and industrial properties, a combination that appealed to just about nobody; corporate overhead expenses were excessive, a legacy of the trust's past as a much larger operation and as a private REIT; it was small, with a market capitalization of less than $500 million. However, Peakstone was changing rapidly. The office portfolio was shrinking quickly, with sale proceeds being deployed into additional industrial assets. I expected that as the New Peakstone strategy played out, the market would revalue the trust from an 11% cap rate to something more in the realm of 7%. I am pleased that Brookfield accelerated that process for us. |
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