| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 5.6% | -1.4% | -3% |
Alluvium's concentrated 21-position global equity fund returned -1.4% in EUR terms during Q2 2026, a quarter dominated by speculative semiconductor excess that the managers view with caution, quoting Benjamin Graham on temporary profit and ultimate loss. The fund initiated a new position in Copart, a car auction platform operating in a duopoly, after the stock fell more than 50% from its 2025 peak. Strong performers included Alphabet (up 24.4% on 22% revenue growth), Robert Half (up 23.5% as recruitment markets show recovery signs), and H&R Block (up 21.3% as AI enhances rather than replaces products). Cable broadband holdings suffered devastation, with Liberty Capital down 40.6% and Charter Communications down 34.1% on competitive pressures, though both trade at more than 20% earnings yields and significant discounts to valuation. Healthcare holdings HCA and McKesson fell despite solid fundamentals, prompting additional purchases. The managers reduced cash to a historically low 10.0% by identifying bottom-up opportunities, maintaining disciplined value-oriented positioning across AI scalers, structural franchises, quality operators, cyclical businesses, and deep value investments while acknowledging they lack courage to deploy more aggressively into cable despite compelling valuations.
The fund invests in a concentrated portfolio of 21 high-quality businesses trading at discounts to intrinsic value, organized into five buckets: AI Scalers leveraging legacy cash flows to capitalize on artificial intelligence (9.3% of portfolio), Structural Franchises with hard-to-replicate market infrastructure (30.4%), Good/Great Operators capturing market share in fragmented industries (27.2%), Cyclical Operators positioned for recovery (12.8%), and Deep Value cable broadband investments priced for obsolescence despite structural superiority (8.2%). The managers employ rigorous bottom-up analysis, maintain 10% cash for opportunistic deployment, and demonstrate willingness to add to positions when prices fall below valuations while trimming when regulatory limits are approached.
The managers maintain a disciplined bottom-up approach focused on identifying individual businesses trading at discounts to their valuations, as evidenced by reduced cash levels driven by specific opportunities rather than broad market views. They remain cautious about speculative excess in semiconductor and technology valuations while continuing to hold concentrated positions in businesses they view as structurally advantaged, including AI scalers with strong legacy cash flows, structural franchises with hard-to-replicate operations, and deep value cable broadband investments trading at significant discounts despite competitive headwinds. The tone reflects patient conviction in their holdings despite near-term volatility, with willingness to add selectively to positions when prices fall below valuations, though they acknowledge uncertainty in areas like cable broadband where they lack courage to deploy more aggressively despite compelling valuations.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 27 2026 | 2026 Q2 | AMZN, AN, BABA, CHTR, CPRT, DKS, GOOGL, GPI, HCA, HRB, LBRDK, LMT, LNR.TO, LYB, MA, MCK, RHI, RYAAY, UMG.AS, V | AI, Broadband, Concentration, cyclicals, deep value, healthcare, Quality, value | - | Alluvium's concentrated value fund returned -1.4% in Q2 2026 amid speculative semiconductor excess the managers explicitly reject. The fund initiated Copart after a 50% decline and added to healthcare and cable broadband positions trading below valuations. Strong performance from Alphabet, Robert Half, and H&R Block was offset by cable devastation despite 20%+ earnings yields. Cash reduced to 10% on bottom-up opportunities across 21 high-quality holdings. |
| Apr 21 2026 | 2026 Q1 | AMZN, AN, BABA, CHTR, DKS, GOOGL, GPI, HCA, HRB, LBRDK, LMT, LNR.TO, LYB, MA, MCK, RYA.L, UMG.AS, V | AI, Concentration, defense, Geopolitical, healthcare, technology, value | AMZN | Concentrated value fund navigated Q1 2026 geopolitical turmoil and AI disruption with -1.7% decline. Benefited from energy supply disruptions via LyondellBasell and defense spending via Lockheed Martin. Added Amazon position while reducing Alphabet. Increased stakes in beaten-down quality names like Visa and Mastercard. Managers concerned about systemic risks despite market recovery to new highs. |
| Jan 23 2026 | 2025 Q4 | 005930.KS, AN, BABA, CHTR, DKS, GOOGL, GPI, HCA, HRB, LBRDA, LNR.TO, LYB, MCK, RHI, RYAAY, THO, UMG.AS, V | AI, Airlines, global, healthcare, technology, underperformance, value | - | Alluvium's concentrated value fund struggled in Q4 2025 with -1.1% returns despite Alphabet's AI-driven surge. Major positions Charter Communications and Liberty Broadband declined sharply on competitive pressures while Ryanair delivered strong performance as the largest holding. The managers maintain their disciplined value approach but acknowledge timing challenges in current market conditions. |
| Aug 7 2025 | 2025 Q2 | 005930.KS, AEM, AN, BABA, CHTR, CPRI, DKS, FL, GOOGL, GPI, HCA, LBRDK, LNR.TO, LYB, MA, MCK, RHI, RYAAY, THO, V | Airlines, Auto Dealers, Market Exuberance, Plastics, tariffs, value |
DKS LNR CN AN GPI THO LBRDA RHI LYB BABA |
Alluvium's value-focused global fund declined 0.1% in EUR terms amid market exuberance in growth stocks. Strong performance from Ryanair, Linamar, and Liberty Broadband offset weakness in Robert Half and LyondellBasell. The managers maintain conviction in their approach, viewing their portfolio companies as increasingly attractive relative to an overvalued broader market trading at elevated multiples. |
| Mar 31 2025 | 2025 Q1 | 005930.KS, AEM, AN, BABA, CHTR, CPRI, DKS, GOOGL, HCA, HRB, LBRDK, LMR.TO, LMT, LYB, MCK, PAG1.L, RHI, RYAAY, THO, UMG.AS, V | global, healthcare, tariffs, technology, uncertainty, value |
BABA MCK RHI THO |
Alluvium outperformed during Trump's market sell-off with strong healthcare and AI-driven gains offset by tariff-sensitive cyclical weakness. The fund holds 18.9% cash, waiting for policy clarity before deployment. Managers view unprecedented tariff uncertainty as making strategic planning impossible, preferring defensive positioning until trade policy stabilizes and creates clearer investment opportunities. |
| Jan 31 2025 | 2024 Q4 | 005930.KS, AN, BABA, CHTR, DKS, GOOGL, GPI, HCA, HRB, LMT, LNR.TO, LYB, MA, MCK, RYAAY, THO, V | Airlines, Automotive, healthcare, payments, policy, technology, Trump, value | - | Alluvium delivered 11.9% returns in 2024 despite Q4 challenges including the costly Capri Holdings exit. Trump policy uncertainty pressured healthcare and defense holdings while payment processors and airlines performed well. The fund maintains 20 concentrated positions with rising cash levels, staying disciplined on valuation despite growth stock outperformance. |
| Sep 30 2024 | 2024 Q3 | 005930.KS, BABA, CPRI, DKS, GOOGL, GPI, HCA, HRB, LBRDK, LMT, LNR.TO, LYB, MCK, MU, RYAAY, THO, UMG.AS, V | active management, capital preservation, Concentrated Portfolio, Global Equities, long-term, Quality, Value Investing |
V LMT |
Alluvium delivered 4.3% returns in Q3 2024, benefiting from China stimulus driving Alibaba up 56% and successful new investments in quality names Visa and Lockheed Martin. The fund continues its evolution toward higher-quality businesses while maintaining disciplined valuation approach. With 19 concentrated holdings and 15.3% cash, the manager balances selectivity with opportunity recognition in elevated markets. |
| Jul 21 2024 | 2024 Q2 | AEM, AN, CPRI, DKS, GOOGL, GPI, HCA, HRB, LBRDK, LNR.TO, LYB, MCK, RGS.AX, RHI, RYAAY, THO, UMG.AS | AI, Airlines, Auto Dealers, Buybacks, Concentration, global, gold, value | - | Alluvium's concentrated value fund fell 2.3% as AI euphoria drove markets higher, creating bubble-like conditions the managers compare to dot-com era. Strong performers included Alphabet and H&R Block, while Capri and Ryanair disappointed. The fund added auto dealership exposure and maintains 15.3% cash, positioning for opportunities as high-growth valuations stretch further from fundamentals. |
| May 9 2024 | 2024 Q1 | CRAWA, FRAG.MX, FTLF, GTX, HERDEZ.MX, HMM.TO, MCB.L, MRC, NLOP, SCAB.ST, SENEA, TLN | Buybacks, Europe, Hotels, Mexico, small caps, value |
MCB.L SCAB.ST HERDEZ.MX FRAGUA.MX |
Alluvial Fund's 6.3% Q1 return reflects successful portfolio repositioning from disappointing P10 Inc. into undervalued European and Mexican opportunities. New holdings McBride and Scandic Hotels trade at significant discounts despite strong fundamentals, while existing positions like Garrett Motion and Crawford United deliver strong results and shareholder returns through buybacks and operational improvements. |
| Jan 14 2024 | 2023 Q4 | 005930.KS, AEM, BABA, CPRI, DKS, GOOGL, HCA, HRB, LBRDK, LNR.TO, LYB, MCK, MU, NST.AX, RMS.AX, RYAAY, THO, UMG.AS, WBA | Cash, Consolidation, Cyclical, Diversified, global, Quality, value | - | Alluvium delivered solid Q4 returns while maintaining 19.6% cash for future opportunities. Gold miners rebounded strongly on falling rates, Dick's Sporting became the top position after strong results, and the fund initiated auto dealer exposure. Despite selling profitable Micron position, the concentrated portfolio of 19 undervalued holdings trades at significant discount to expensive markets. |
| Sep 30 2023 | 2023 Q3 | 005930.KS, AEM, CPRI, DKS, GOOGL, HCA, HRB, LBRDK, LNR.TO, LUV, LYB, MCK, MU, NST.AX, ROG.SW, RRL.AX, RYA.L, THO, UMG.AS, WBA | Concentration, global, Gold Miners, healthcare, retail, value | - | Alluvium's concentrated value strategy outperformed in Q3 2023 despite market headwinds, driven by Capri's takeover premium and strong results from H&R Block and Universal Music. The managers maintained discipline, exiting underperforming positions while adding to quality names at attractive valuations, ending with 16.5% cash for future opportunities. |
| Jun 30 2023 | 2023 Q2 | 005930.KS, AEM, BABA, CPRI, DKS, GOOGL, HCA, HRB, LBRDK, LNR.TO, LUV, LYB, MCK, MU, NST.AX, RRL.AX, RYA.L, THO, UMG.AS, WBA | AI, Airlines, Concentration, global, gold, healthcare, value | RYA.L | Alluvium's value-focused global fund underperformed in Q2 2023 by avoiding AI euphoria in overvalued tech giants. Strong performance from Thor, McKesson, and HCA offset weakness in Capri, Alibaba, and gold miners. Managers increased positions in beaten-down names while trimming winners, maintaining 22 concentrated holdings at attractive valuations despite recent headwinds. |
| Mar 31 2023 | 2023 Q1 | BABA, CHTR, CPRI, DKS, GOOGL, HCA, HRB, LBRDK, LEA, LNR.TO, LUV, MCK, MU, RHI, ROG.SW, RYA.L, THO, UMG.AS, WBA, WFG.TO | Airlines, Cyclical, global, healthcare, Recovery, technology, value | LBRDK | Alluvium Global Fund returned 4.0% in Q1 2023, outperforming markets amid banking turmoil. The fund owns cash-generating businesses independent of capital markets, avoiding financials entirely. Top performers included Ryanair benefiting from travel recovery and Dick's Sporting showing structural improvements. New position Liberty Broadband provides cable infrastructure exposure. Managers expect continued volatility but remain cautiously optimistic. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIThe fund holds three major AI scalers (Alphabet, Alibaba, Amazon) representing 9.3% of the portfolio. These companies are spending heavily on AI infrastructure and cloud services, with Alphabet posting 22% revenue growth and increasing capital expenditure to USD 190 billion. Alibaba's results focused on AI investments, though free cash flow turned negative due to capital expenses. The managers view these businesses as best positioned to capitalize on AI while their legacy businesses generate strong cash flows. |
Cloud Data Centers Enterprise Software Semiconductors |
Semiconductor CycleThe quarter was dominated by an explosive semiconductor rally, with Micron, Intel, and SK Hynix all tripling in price. The MSCI AC World Information Technology Index returned 39.1% in EUR terms, with more than 80% of the MSCI World Index return attributable to semiconductor and tech businesses. The managers explicitly compare this to speculative excess, quoting Benjamin Graham on temporary profit and ultimate loss for speculators. |
Semiconductors Memory Speculation Volatility | |
BroadbandCable broadband businesses experienced devastation during the quarter. Liberty Capital fell 40.6%, while Charter Communications and Liberty Broadband fell 34.1% and 33.7% respectively. The market is concerned about flat average revenue per user and continual loss of internet customers due to competition from fixed wireless and Starlink. Despite these headwinds, the managers note Charter's physical networks remain structurally superior and the stocks trade at earnings yields exceeding 20%, though they lack courage to continue buying aggressively. |
Telecom Infrastructure Wireless Telecom Satellite Broadband Value | |
Auto AftermarketThe fund initiated a new position in Copart, a car wrecker turned auction platform that has grown to sell over 4 million cars annually. The business operates in a duopoly serving insurance companies for total loss vehicles. The managers see a balancing act between declining accident rates from autonomous driving and increasing total loss classifications from higher repair costs. After falling more than 50% from its May 2025 peak, the stock now trades at a discount to their valuation, providing a rare opportunity to invest in a high-quality business. |
Auto Insurance Marketplaces Quality | |
HealthcareThe fund's two healthcare holdings had poor share price performance despite solid fundamentals. HCA Healthcare fell 17.5% following first quarter results, likely due to lower respiratory volumes from a mild flu season, though management reaffirmed 2026 guidance. McKesson fell 12.6% despite reporting full-year results in line with expectations and providing strong guidance with 13-16% long term growth expectations. Both stocks trade below the managers' valuations, prompting additional purchases. |
Hospitals Medical Distribution PBMs | |
PlasticsLyondellBasell gave back much of the prior quarter's 88.3% return, falling 34.0%. The managers are amazed by the market's response to the Iraq war ceasefire, with expectations that commodity markets have normalized despite ongoing attacks in the Strait of Hormuz. Management expects higher prices to be sustained, but polyethylene and polypropylene prices have since fallen around 15%. The stock now trades below the managers' valuation at 2.1% of the fund. |
Petrochemicals Commodity Chemicals Oil | |
| 2026 Q1 |
AIAI euphoria drove market returns but created a SAASpocalypse with rapid devaluation of traditional SaaS stocks. Anthropic's open source release caused significant disruption. Manager expresses concern about AI's hidden risks, manipulation capabilities, and lack of adequate caution in adoption. |
SaaS Anthropic Automation Software Technology |
DefenseUS and Israeli bombing of Iran created geopolitical tensions and war conditions. Defense contractors like Lockheed Martin benefited significantly from increased conflict. Manager views this as creating economic consequences and market volatility. |
Lockheed Military Conflict Iran Geopolitical | |
OilIran's seizure of Strait of Hormuz disrupted global oil supply, causing price spikes that hurt airlines like Ryanair but benefited petrochemical companies like LyondellBasell. Manager sees this as highlighting global economy's vulnerability to critical infrastructure disruptions. |
Hormuz Petrochemicals Energy Supply Disruption | |
PaymentsVisa and Mastercard showed strong business performance with mid-teens earnings growth and 20-25% growth in Value Added Services, but share prices fell significantly. Manager increased positions as valuations became more attractive despite the disconnect between performance and price. |
Visa Mastercard Processing Growth Valuation | |
| 2025 Q4 |
AIAlphabet's Gemini AI gained massive traction with 650m monthly users in 6 months, driving $2 trillion in market value addition. Questions remain about efficiency gains and which AI products will prevail long-term. |
Artificial Intelligence Alphabet Gemini TPU |
AirlinesRyanair delivered strong performance with 19.6% quarterly return and 58.3% annual return. Earlier aircraft deliveries and upgraded traffic expectations strengthen competitive positioning under quality management. |
Ryanair Aircraft Traffic Competitive | |
BroadbandCharter Communications and Liberty Broadband suffered significant declines of 24% and 23% respectively, down almost 50% for the year. Despite tough competitive environment, managers believe Charter's offering will eventually prevail. |
Charter Liberty Internet Competition | |
GoldManagers sold gold mining positions too early, missing substantial gains as gold reached $4,900 per ounce. Regis Resources multiplied 4.5x and Northern Star doubled after being sold in 2024. |
Gold Miners Regis Northern Star Selling | |
SemiconductorsSold semiconductor positions including Micron and Samsung too early, missing significant gains. Micron now trades at 3.5x the average selling price, representing substantial foregone returns. |
Micron Samsung Memory Selling | |
| 2025 Q2 |
ValueThe fund focuses on solid businesses generating reliable cash flows trading at cheap to fair value multiples, contrasting with the broader market's focus on growth and speculative investments. Most fund holdings trade at forward P/E multiples between 10-18 times versus S&P 500 at 23 times and Nasdaq at 30.5 times. |
Valuation Cash Flow Multiples Earnings Discount |
Auto DealersBoth Autonation and Group 1 Automotive performed well, up 22.7% and 14.5% respectively. These businesses continued their progression from cheap investments to more fairly priced levels while still remaining far from expensive, together accounting for 7.6% of the fund. |
Automotive Retail Dealerships Used Cars Valuation | |
AirlinesRyanair was up 29.0% and became the fund's largest position at 7.9%. The company continues strengthening its low-cost position despite Boeing delivery delays, announced engine maintenance facilities, share buybacks, dividend increases, and MSCI inclusion. |
Budget Airlines Low Cost Europe Travel Boeing | |
PlasticsLyondellBasell continues struggling in the tough plastics market, down 15.7%. The company is divesting problematic assets to improve margins and cash flows, with management shutting down loss-making operations and contributing funds to rid itself of European assets. |
Chemicals Petrochemicals Margins Restructuring Europe | |
| 2025 Q1 |
Trade PolicyTrump's tariff policies are creating significant uncertainty across portfolio companies, with managers unable to make investment plans due to constantly changing directives. Canadian companies like Linamar are particularly exposed, while broader implications affect auto dealers, recreational vehicle producers, and other businesses with international supply chains. |
Tariffs Canada Manufacturing Supply Chain Uncertainty |
AIAlibaba is rapidly expanding its cloud and AI operations with management seeing no end to growth, as AI revenues have doubled for six consecutive quarters. The company is ramping up capital spending significantly to accommodate demand that is well above expectations. |
Cloud Infrastructure Revenue Growth Capital Spending | |
HealthcareHealthcare holdings performed well with McKesson upgrading guidance and expanding into ophthalmology alongside oncology, while HCA Healthcare recovered from previous quarter's weakness with management providing positive 2025 guidance above estimates. |
Drug Distribution Hospitals Guidance Acquisitions | |
| 2024 Q4 |
ValueThe fund maintains a value-oriented approach, seeking businesses trading below intrinsic value. The manager discusses the long-term performance divergence between growth and value stocks, noting that growth has outperformed value significantly over recent years but maintains their disciplined value philosophy regardless of market trends. |
Value Intrinsic Value Valuation Discount Premium |
PaymentsThe fund holds positions in both Visa and Mastercard, viewing them as having negligible differences in investment merits. The manager considers both deserving positions in the portfolio and manages their combined weighting to maintain maximum portfolio flexibility while accessing steady cash flow streams from payment processing. |
Payments Credit Cards Processing Cash Flow Networks | |
AirlinesRyanair represents the fund's airline exposure, with the manager increasingly positive despite growth setbacks from Boeing delivery delays. The airline's lowest cost position is strengthening, and the manager upgraded their analysis based on greater contribution from auxiliary spending and share buybacks. |
Airlines Travel Cost Position Delivery Delays Buybacks | |
HealthcareThe fund holds HCA Healthcare and McKesson, representing hospital operations and drug distribution respectively. HCA faced significant pressure from potential policy changes under the Trump administration regarding medical insurance subsidies, while McKesson recovered with management upgrading guidance. |
Healthcare Hospitals Drug Distribution Policy Risk Subsidies | |
Auto DealersThe fund holds both Group 1 Automotive and Autonation, with Group 1 continuing stellar performance through UK acquisition integration. The manager actively manages the relative weightings between these two auto dealer positions based on their trading premiums to valuation. |
Auto Dealers Automotive Acquisitions Integration Margins | |
| 2024 Q3 |
PaymentsThe fund initiated a new position in Visa, recognizing the value of high-quality payment network businesses. Visa and Mastercard operate essential open-loop payment systems with insurmountable barriers to entry, benefiting from digital payment growth trends including e-commerce, mobile payments, and emerging market adoption. |
Digital Payments Network Effects Transaction Processing Fintech Emerging Markets |
DefenseAdded Lockheed Martin as a new investment, a defense contractor that reported impressive results with strong backlog and upgraded full-year guidance. The position grew 25.8% during the quarter as the defense sector benefited from increased spending trends. |
Defense Contractors Military Spending Aerospace Government Contracts Backlog | |
ChinaChina announced a massive stimulus package worth around one trillion USD or 6% of GDP, involving rate cuts, mortgage support, and equity market support. This drove significant outperformance in Chinese holdings like Alibaba, which surged 56% during the quarter. |
Stimulus Monetary Policy Economic Support Equity Markets Government Intervention | |
QualityThe fund has evolved its investment process to focus increasingly on quality businesses, loosening traditional cheapness requirements while tightening quality criteria. This shift led to recognizing the value of high-quality businesses like Visa and Mastercard that were previously considered too expensive. |
Investment Process Business Quality Returns on Capital Valuation Approach Screening Criteria | |
| 2024 Q2 |
AIThe manager draws parallels between current AI euphoria and the dot-com bubble, noting Nvidia's eight-fold price increase over two years and its 25x forecast revenue multiple. They suggest Alphabet's 20.8% return was driven more by AI sentiment than fundamentals. The manager warns that AI-driven valuations may be unsustainable, citing historical examples of tech bubble collapses. |
Nvidia Alphabet Bubble Valuations Technology |
Gold MinersThe fund holds positions in both Agnico Eagle Mines (up 11.4%) and Regis Resources (down 12.9%) despite gold price gains of 4.2%. Regis faced weather-related disruptions but maintained guidance and announced underground projects adding 25% production from 2027. The manager revised long-term assumptions but maintains positions based on management quality and growth prospects despite valuation disparities. |
Agnico Eagle Regis Resources Production Weather Underground | |
Auto DealersThe manager increased exposure to auto dealerships by adding Autonation alongside existing Group 1 Automotive position. Both companies were impacted by a CDK Global cyberattack that shut down systems across 15,000 dealers, forcing manual operations. Despite this disruption, the manager sees attractive economics in the sector and maintains conviction in the dealership model. |
Autonation Group 1 CDK Global Cyberattack Franchises | |
AirlinesRyanair fell 22.3% despite solid results, with growth constrained by Boeing delivery delays. The manager notes strong demand, competitor capacity issues from Pratt & Whitney engine problems, and industry consolidation supporting fares. Management demonstrated confidence through EUR 700m buyback and dividend initiation, prompting the manager to increase the position. |
Ryanair Boeing Delays Buyback Dividend | |
BuybacksMultiple portfolio companies initiated or expanded share repurchase programs during the quarter. Ryanair announced a EUR 700m buyback alongside its first dividend, while Alphabet continued its existing repurchase program. The manager views these capital return programs as signs of management confidence and attractive capital allocation. |
Share Repurchase Capital Return Management Confidence Allocation | |
| 2024 Q1 |
HotelsScandic Hotels operates 280 hotels with 58,000 rooms in Scandinavia using a variable lease model that reduces operating leverage compared to traditional hotel companies. The company has recovered to record revenues and profits post-COVID while maintaining lower leverage than historically, yet trades below pre-COVID highs offering a double-digit free cash flow yield. |
Hotels Travel Scandinavia Variable Leases Recovery |
ValueMultiple holdings demonstrate deep value characteristics including McBride trading at 4.4x EBITDA, Hammond Manufacturing at 6.4x earnings, and MRC Global at 5x operating cash flow. The manager emphasizes finding solid companies trading at multi-year lows, particularly in overlooked markets like London-listed small-caps. |
Value Low Multiples Undervalued Small Caps Contrarian | |
MexicoLong-term bullish on Mexico due to positive demographics, growing middle class, and reshoring benefits as US manufacturers reduce China dependency. Investments include Grupo Herdez, a consumer goods manufacturer trading at 11x earnings, and Corporativo Fragua, a pharmacy chain growing revenues 14% annually. |
Mexico Onshoring Demographics Consumer Emerging Markets | |
BuybacksGarrett Motion announced plans to use nearly all 2024 free cash flow for share repurchases and immediately bought back 10 million shares for $90 million. The company continues harvesting cash flows from turbochargers while transitioning to electric vehicle equipment manufacturing. |
Buybacks Capital Return Cash Flow Shareholder Returns Auto Parts | |
| 2023 Q4 |
Gold MinersGold miners rebounded strongly as falling long-term interest rates reduced the opportunity cost of owning gold. Regis Resources gained 46.3% and Northern Star 32.0%, with Agnico Eagle also performing well at 18.6%. The fund completed its divestment of Northern Star after a 2.6-year holding period that returned 18.5%. |
Gold Mining Interest Rates Opportunity Cost Divestment |
Auto DealersThe fund initiated a new investment in the US auto dealership industry after extensive research. Despite cyclical margin pressures from pandemic highs, the dealer model remains entrenched by regulation and essential to the automotive ecosystem. The fragmented industry offers consolidation opportunities for well-capitalized players with manufacturer relationships. |
Auto Retail Consolidation Fragmentation Regulation Margins | |
Semiconductor CycleMicron reported smaller than expected losses as memory chip demand recovered and prices increased, with sequential margin expansion expected through 2024. However, the fund sold its position as investment criteria evolved toward higher quality, less cyclical businesses, despite the positive outlook and 24.8% quarterly return. |
Memory Cyclical Margins Demand Recovery Quality | |
| 2023 Q3 |
ValueThe fund maintains a value-oriented approach, buying companies trading below their intrinsic valuations. The managers discuss specific valuation assessments for holdings like Capri, HCA Healthcare, and Dick's Sporting, making buy/sell decisions based on price versus value considerations. |
Valuation Intrinsic Value Price Discovery Undervalued Premium |
HealthcareHealthcare represents a significant portion of the portfolio with holdings in HCA Healthcare, McKesson, and previously Walgreens and Roche. The managers discuss the sector's performance dynamics and their selective approach to healthcare investments. |
Hospitals Medical Distribution Pharmaceuticals Healthcare Services PBMs | |
Gold MinersThe fund holds Australian gold mining companies Regis Resources and Northern Star, plus Agnico Eagle. Gold mining stocks now account for 7.5% of fund assets after underperforming during the quarter with declines of 18.6% and 12.2% respectively. |
Gold Mining Precious Metals Australian Miners Commodity Exposure | |
RetailThe portfolio includes retail exposure through Dick's Sporting Goods and previously Walgreens. Dick's faced challenges with inventory write-downs and theft issues, leading to revised guidance, though management remains optimistic about growth initiatives. |
Sporting Goods Retail Operations Inventory Management Store Formats Consumer Spending | |
| 2023 Q2 |
AirlinesEuropean airline consolidation accelerating post-pandemic with weaker carriers collapsing while efficient operators like Ryanair gain market share. Ryanair ordered 300 new Boeing aircraft for delivery 2027-2033, targeting 300m passengers annually by 2034 with improved cost advantages from newer, more efficient planes. |
Consolidation Market Share Efficiency Capacity |
AIArtificial intelligence euphoria driving massive outperformance in tech behemoths, with the largest seven companies providing majority of index returns. Fund benefited modestly through Alphabet and semiconductor holdings Samsung and Micron, though managers question sustainability of current AI valuations. |
Euphoria Valuations Semiconductors Technology | |
Gold MinersGold mining companies underperformed despite macro uncertainty, with Regis Resources disappointing on production and costs while Northern Star approved major mill expansion. Managers reduced gold exposure from 11.3% to 8.6% of portfolio, selling into strength early in quarter. |
Production Costs Expansion Underperformance | |
| 2023 Q1 |
AirlinesRyanair was the Fund's best performer over the quarter, up 21.9%. Now operating above pre-Covid levels, management's bold purchase of additional Boeing Max aircraft during the pandemic is proving prescient. Given strong traffic recovery and pricing, Ryanair raised its full year profit guidance by 25%. |
Travel Recovery Pricing Aircraft |
Semiconductor CycleHardware manufacturers Micron and Samsung posted strong returns over the March quarter, up 20.7% and 16.4% respectively. The semiconductor companies experienced expected tough times given industry cyclicality, but showed signs of recovery from the tech selloff of 2022. |
Cyclical Recovery Memory Hardware | |
Sporting GoodsDick's Sporting continues delivering strong results with the business structurally reset at higher margins post-pandemic. Management demonstrated confidence by meaningfully increasing the dividend to $4.00 per year from $1.10 pre-pandemic. The company has delivered 38.8% annual EPS growth over 3 years and trades at an earnings yield of 10.6%. |
Margins Dividends Growth Retail | |
BroadbandLiberty Broadband provides exposure to Charter Communications, which owns cable infrastructure serving 55 million households. Cable networks are being repurposed for high-speed internet delivery as traditional TV declines. Charter announced a $5.5 billion network upgrade commitment over three years to provide speeds approaching fiber levels. |
Infrastructure Internet Upgrade Utility |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Apr 21, 2026 | Fund Letters | Alluvium Global Fund | AMZN | Amazon | Internet Retail | Internet & Direct Marketing Retail | Bull | NASDAQ | AI, AWS, Cloud computing, e-commerce, Flywheel Effect, growth, Logistics, technology platform | Login |
| Aug 7, 2025 | Fund Letters | Stuart Pearce | DKS | Dick's Sporting Goods, Inc. | Consumer Discretionary | Specialty Stores | Bull | NYSE | acquisition, retail, Returns, synergies, valuation | Login |
| Aug 7, 2025 | Fund Letters | Stuart Pearce | LNR CN | Linamar Corporation | Consumer Discretionary | Auto Parts & Equipment | Bull | TSX | Auto parts, Autos, Free Cash Flow, Reshoring, tariffs | Login |
| Aug 7, 2025 | Fund Letters | Stuart Pearce | AN | AutoNation, Inc. | Consumer Discretionary | Specialty Stores | Bull | NYSE | Auto retail, cash flow, Cyclicals, Re-rating, valuation | Login |
| Aug 7, 2025 | Fund Letters | Stuart Pearce | GPI | Group 1 Automotive, Inc. | Consumer Discretionary | Specialty Stores | Bull | NYSE | Auto dealers, capital allocation, diversification, Mid-cycle, Re-rating | Login |
| Aug 7, 2025 | Fund Letters | Stuart Pearce | THO | Thor Industries, Inc. | Consumer Discretionary | Leisure Products | Bull | NYSE | buybacks, Cycle, Free Cash Flow, Leisure, RVs | Login |
| Aug 7, 2025 | Fund Letters | Stuart Pearce | LBRDA | Liberty Broadband Corporation | Communication Services | Cable & Satellite | Bull | NASDAQ | cable, consolidation, discount, synergies, Tracking stock | Login |
| Aug 7, 2025 | Fund Letters | Stuart Pearce | RHI | Robert Half Inc. | Industrials | Human Resource & Employment Services | Bull | NYSE | Cycle, Downturn, Employment, Staffing, valuation | Login |
| Aug 7, 2025 | Fund Letters | Stuart Pearce | LYB | LyondellBasell Industries N.V. | Materials | Commodity Chemicals | Bull | NYSE | asset sales, Chemicals, Free Cash Flow, Margins, restructuring | Login |
| Aug 7, 2025 | Fund Letters | Stuart Pearce | BABA | Alibaba Group Holding Limited | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | NYSE | buybacks, China, cloud, diversification, e-commerce | Login |
| Mar 1, 2025 | Fund Letters | Alluvium Global Fund | BABA | Alibaba Group Holding Limited | Consumer Discretionary | Internet & Direct Marketing Retail | Neutral | NYSE | Artificial Intelligence, capital expenditure, China, Cloud computing, e-commerce, Government Relations, infrastructure, Technology Platforms | Login |
| Mar 1, 2025 | Fund Letters | Alluvium Global Fund | MCK | McKesson Corporation | Health Care | Health Care Distributors | Neutral | NYSE | Acquisitions, defensive, EPS growth, Healthcare Distribution, Oncology, Ophthalmology, pharmaceuticals, Portfolio Rationalization | Login |
| Mar 1, 2025 | Fund Letters | Alluvium Global Fund | RHI | Robert Half Inc. | Industrials | Human Resource & Employment Services | Bull | NYSE | Business Confidence, Cyclical, Earnings Trough, Recruitment, Staffing Services, turnaround, Value | Login |
| Mar 1, 2025 | Fund Letters | Alluvium Global Fund | THO | Thor Industries, Inc. | Consumer Discretionary | Leisure Products | Bull | NYSE | cash generation, consumer confidence, Cyclical, Recreational Vehicles, RVs, tariffs, Through-Cycle Earnings, Value | Login |
| Sep 30, 2024 | Fund Letters | Alluvium Global Fund | V | Visa Inc. | Information Technology | Data Processing & Outsourced Services | Bull | NYSE | asset-light, digital payments, e-commerce, Emerging markets, Fintech, Global, Mobile payments, network effects, Payments, recurring revenue | Login |
| Sep 30, 2024 | Fund Letters | Alluvium Global Fund | LMT | Lockheed Martin Corporation | Industrials | Aerospace & Defense | Bull | NYSE | Aerospace, backlog, Contractor, Defense, Defense spending, geopolitical, government contracts | Login |
| Mar 31, 2024 | Fund Letters | Alluvium Global Fund | MCB.L | McBride plc | Consumer Staples | Household Products | Bull | London Stock Exchange | Cleaning Products, consumer staples, Europe, household products, Margin recovery, Private-label, turnaround, UK, Value | Login |
| Mar 31, 2024 | Fund Letters | Alluvium Global Fund | SCAB.ST | Scandic Hotels Group AB | Consumer Discretionary | Hotels, Restaurants & Leisure | Bull | Nasdaq Stockholm | Business Travel, Convertible Overhang, Europe, hospitality, Hotels, Mid-market, recovery, Scandinavia, variable leases | Login |
| Mar 31, 2024 | Fund Letters | Alluvium Global Fund | HERDEZ.MX | Grupo Herdez | Consumer Staples | Food Products | Bull | Mexican Stock Exchange | Condiments, consumer staples, Emerging markets, Family-owned, Food Products, Mexico, Nearshoring, Value | Login |
| Mar 31, 2024 | Fund Letters | Alluvium Global Fund | FRAGUA.MX | Corporativo Fragua | Consumer Staples | Food & Staples Retailing | Bull | Mexican Stock Exchange | Emerging markets, growth, healthcare, illiquid, Mexico, net cash, Pharmacies, retail, store expansion | Login |
| Jul 11, 2023 | Fund Letters | Alluvium Global Fund | RYA.L | Ryanair Holdings plc | Industrials | Airlines | Bull | London Stock Exchange | Cost leadership, European Airlines, fleet-expansion, industry consolidation, market share gains, operational efficiency, Short-Haul Travel, Ultra Low-Cost Carrier | Login |
| Mar 31, 2023 | Fund Letters | Alluvium Global Fund | LBRDK | Liberty Broadband Corporation | Communication Services | Cable & Satellite | Bull | NASDAQ | broadband, Cable Infrastructure, Charter Communications, infrastructure, internet services, John Malone, Pricing power, telecommunications, Utility-like, Value | Login |
| TICKER | COMMENTARY |
|---|---|
| CPRT | Once again, the most significant and interesting news for investors is a new position we initiated. On this occasion, it is Copart, the car wrecker turned auction platform (down 15.1% over the quarter). Copart has grown from a small single auto salvage yard in Vallejo, California in 1982 to a car auction technology platform selling over 4 million cars per year, predominantly on behalf of large insurance companies. We were alerted to this business by our quantitative screen - where it appeared a compelling opportunity (ten year sales growth of 17.4% and 19.1% profit growth, negligible debt, and mid 30's returns on invested capital), so we explored the business in greater depth. Our synopsis: It is a top notch business operating in a duopoly, but with little scope for domestic growth significant enough to move the needle. Most of Copart's revenue stems from its services to insurance companies for selling their vehicles which they classify to be 'total losses'. So, when it comes to analysing the long term viability of its business, we think there are two key considerations. There is the likely growth rate of automobile accidents. We expect this to gradually decline as a result of increased adoption of autonomous driving, which is known to have lower crash rates than human-driven vehicles. Then there is the proportion of future collisions that are likely to result in cars being classified as 'total losses'. We expect this will continue its long term upward trend (driven by increased technology and high repair costs). The balancing of these factors, to a large extent, represents the risk vs reward equation associated with investing in this business. Copart's share price compounded at over 22% per annum from its IPO (in March 1994) to its peak in mid May 2025. It has since fallen by more than 50%. We think this is largely due to the market's concerns regarding consumers opting out or downgrading their insurance, and the belief that this trend is likely to continue. Whilst we acknowledge this is a risk, we believe this to be more cyclical rather than structural in nature. And so the falling share price has provided us with a rare opportunity to invest in the type of high quality business that we look for at a discount to our valuation. |
| GOOGL | Alphabet was the Fund's strongest performer over the quarter, up 24.4%. There's little to add from our last report, except that its 22% revenue growth exceeded our expectations, and it seems it can't keep up with demand, hence it has increased, yet again (and somewhat worryingly) its capital expenditure to budget (to USD 190b) and expects further increases next year. |
| RHI | We last wrote about Robert Half (up 23.5%) in our December report, where we mentioned that hindsight suggests our purchasing during price descents in May, August and October were mistakes. This remains the case - but less so. Our expectation that the recruitment / outplacement market will slowly recover, appears, going by Robert Half's recent results, to be bearing fruit. And management remain cautiously optimistic. We did not trade the stock. The Fund's position is now 2.7%. |
| HRB | Last quarter we mentioned in regard to H&R Block, the tax agents, that a 'SAASpocalypse' did not necessarily apply across the board, and that there was a mispricing opportunity so we bought more. Somewhat ironically, during its results call in early May, management stated that rather than AI replacing its products, it is using AI to build better products which are being well received. After returning 21.3% during the quarter, it now accounts for 4.6% of the Fund. Although it is now trading at a more respectable price, H&R Block achieves high returns on its capital, and trades at double digit cash flow and earnings yields. In no way do we see it as expensive. |
| UMG.AS | Universal Music, the music owner and producer, returned 11.7%. As we wrote last quarter, we could not make sense of the sell-off and we bought a meaningful amount. In April Universal received an offer from Bill Ackman's Pershing Capital. It was really a restructuring proposal involving selling its stake in Spotify, increasing its debt (and maintaining it at a higher level), buying back shares, listing on the New York Stock Exchange, appointing new Board members (including a Chairman), and improving its investor relations. Although Universal rejected the proposal it seems to have prompted action (including divesting part of its Spotify stake), and the catalyst for this quarter's performance. It remains a large Fund position at 7.8%. |
| LNR.TO | The share price of Linamar, the industrial manufacturer, was up 17.0%, but not without volatility. On 15 April the Linamar share price fell 12.6% as the market suddenly seemed convinced that US tariff changes (implemented a few days earlier) would have a devastating effect on its business. After studying the tariff changes, and considering management's reassurance (that the effect would be marginal - to the extent that it maintained its 2026 outlook), we bought some shares the day after. Not long after it rebounded and accounted for more than 5% of the Fund. We are not usually traders, but a combination of price vs value analysis, and regulatory requirements led us to sell some of our holding, and it now represents 4.2% of the Fund. |
| RYAAY | Similarly with Ryanair (up 14.6%) its share price was faltering and we added to our position, but it since bounced back to account for more than 10% of the Fund, so in this case we were forced to sell a little. It now accounts for 9.9% of the Fund. |
| DKS | A few other investments, not yet mentioned, which posted double digit share price returns over the quarter were Dick's Sporting, the retailer (up 15.0%). |
| AMZN | A few other investments, not yet mentioned, which posted double digit share price returns over the quarter were Amazon (up 14.4%). |
| V | A few other investments, not yet mentioned, which posted double digit share price returns over the quarter were Visa (up 13.7%). |
| CHTR | Charter Communications and its tracking stock Liberty Broadband fell 34.1% and 33.7% following the release of Charter's results in April. It seems the market is understandably concerned with the average revenue per user (ARPU) being flat, and the continual loss of internet customers. Competition is intense from both fixed wireless providers and low earth orbit satellite (Starlink). Compared to Charter's cables, these are higher cost and more capacity constrained. Charter's flat ARPU is the result of its decision to provide a demonstrably better offering at a low price - so why is it losing so many internet customers? We do not know the answer. We do know though that it is growing its mobile subscribers at a much faster rate than it is losing its internet customers, and more than half of its residential customers subscribe to more than one product. We also see positives stemming from the pending Cox acquisition, and indeed management increased expected synergies by 60%. It seems to us that the broader market has extrapolated current conditions to perpetuity. Then again, the broader market is also subscribing significant value to unprofitable AI companies, many users of which are not paying for these AI features, yet, on the other hand, those same users are paying recurring fees for their internet connections. Ironically, one such AI company (Grok.ai) is housed within SpaceX, whose only profitable business is Starlink - that provides internet services! Charter trades at a price that translates to an earnings yield and a free cash flow yield of more than 20%, and at less than half our valuation. The combined positions account for 4.8% of the Fund. We are torn on this one. Ordinarily we would buy more, and we have been, but the news is not improving and we lack the requisite courage to continue buying. |
| LBRDK | Charter Communications and its tracking stock Liberty Broadband fell 34.1% and 33.7% following the release of Charter's results in April. It seems the market is understandably concerned with the average revenue per user (ARPU) being flat, and the continual loss of internet customers. Competition is intense from both fixed wireless providers and low earth orbit satellite (Starlink). Compared to Charter's cables, these are higher cost and more capacity constrained. Charter's flat ARPU is the result of its decision to provide a demonstrably better offering at a low price - so why is it losing so many internet customers? We do not know the answer. We do know though that it is growing its mobile subscribers at a much faster rate than it is losing its internet customers, and more than half of its residential customers subscribe to more than one product. We also see positives stemming from the pending Cox acquisition, and indeed management increased expected synergies by 60%. It seems to us that the broader market has extrapolated current conditions to perpetuity. Charter trades at a price that translates to an earnings yield and a free cash flow yield of more than 20%, and at less than half our valuation. The combined positions account for 4.8% of the Fund. |
| LYB | LyondellBasell, the plastics producer gave back some of that 88.3% return of last quarter, and fell 34.0%. We are continually amazed by the market's response to the war in Iraq. It seems that this so called 'ceasefire' (the one where Iran keeps attacking ships in the Strait of Hormuz and the US keeps bombing) has led to expectations that all is well for the affected commodity markets. Management provided results in early May, and reported expectations that the higher prices will be sustained for some time. That makes sense to us. But since then, Polyethylene and Polypropylene prices, for example, have fallen by around 15%. After we sold around two thirds of our holding during the March quarter, we ceased as the price fell to levels below our valuation. It currently accounts for 2.1% of the Fund and we are comfortable with maintaining this position. |
| BABA | Alibaba was down 21.3%. Its results were all about AI, and how its investments are paying off, and management's confidence to make further investments. So the only disappointing news (if you can call it that), was that free cash is being chewed up by capital expenses to the point where it has become negative. The results were generally well received. Share price fluctuations are par for the course, especially for Alibaba. We are not fussed. As a consequence of the falling share price, its maintainable earnings yield (on our numbers) has increased to 7.7% and it is trading at a circa 30% discount to our valuation. The Fund's current position is 2.6%. |
| HCA | Our two healthcare companies had a poor quarter (in terms of share price performance, not business fundamentals). HCA Healthcare, the hospital operator, fell 17.5%. The share price fell 8.8% immediately following its first quarter results (despite management reaffirming its 2026 guidance). We suspect this is a (over) reaction to poorer than expected respiratory volumes due to a mild flu season. With the shares trading at a discount to our valuation we bought a little more to bring the Fund's position to 6.4%. |
| MCK | McKesson, the drug distributor (down 12.6%), reported its full year results which were perfectly in-line with our expectations. Management provided strong guidance for its next year's earnings, and reiterated its 13%-16% long term growth expectations. After feeding the numbers through our model, our valuation increased by 18%, and with the share price trading below it, we bought a little more such that it accounts for 6.8% of the Fund. |
| LMT | Lockheed Martin, the defence contractor, reversed some of its March quarter's share price gain by falling 15.1%. Its first quarter results were mildly disappointing, and together with the tempering war, this probably led to the poor performance. It trades in-line with our valuation, and we intend to maintain the Fund's current position of 2.5%. |
| GPI | Group 1 Automotive, (down 11.8%) reported results without too many surprises, however servicing and parts revenue was affected in the US by poor weather. It also announced significant job cuts (nearly 700) across its US operations. We spoke of our concerns with this business (misjudged UK acquisition, high debt level) last quarter, and we started to implement a complete divestment. We only achieved the sale of a small portion before the share price fell to an unacceptable level. It accounts for 2.3% of the Fund. |
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