| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 30% | 21.6% |
Choice Equities Fund delivered exceptional performance in Q2 2025 with +30.0% net gains, bringing year-to-date returns to +21.6% versus -1.8% for the Russell 2000. The fund's concentrated approach capitalized on market volatility during a historic four-month round trip where the S&P 500 moved from February highs into bear market territory and back to new highs by June. Key drivers included MGNI, the largest position benefiting from the shift in advertiser budgets from linear TV to streaming, and CELH contributions. The portfolio maintains focus on six core holdings: BNED, CELH, GENI, MGNI, MOD, and PAR. GENI secured extended NFL and NCAA data rights deals providing revenue visibility, while MOD continues its transformation under CEO Brinker with strong data center cooling demand. Despite acknowledging risks from trade wars and earnings pressures, the manager sees an increasingly positive environment for earnings as fiscal policy turns supportive and geopolitical tensions potentially de-escalate. The concentrated strategy positions the fund to benefit from positive business developments across its high-conviction holdings.
Choice Equities Fund focuses on concentrated small-cap investing, capitalizing on market volatility to identify attractive price-to-value dislocations in companies with strong business fundamentals and clear growth catalysts.
Events of recent weeks have continued to point to an increasingly positive environment for earnings. These developments followed after much of the investment community lowered outlooks and took expectations and forward estimates down, setting up positive revisions to earnings growth and expectations from here. Despite this view remaining susceptible to becoming dated quickly given things changing quickly, the manager believes holdings offer an attractive blend of forward returns based on views of prices and values and likely developments of positive business outcomes.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 17 2025 | 2025 Q2 | BNED, CELH, GENI, MGNI, MOD, PAR, ROP, SRAD | Advertising, concentrated, gaming, growth, Manufacturing, small caps, technology, value |
GENI MGNI MOD GENI MGNI MOD |
Choice Equities Fund generated +30.0% Q2 returns through concentrated small-cap investing, capitalizing on market volatility to identify price-to-value dislocations. Key holdings MGNI and GENI drove performance with secular tailwinds in streaming advertising and sports betting data rights. Despite trade war risks, the manager sees improving earnings environment with supportive fiscal policy and geopolitical de-escalation setting up positive revisions. |
| May 12 2025 | 2025 Q1 | BNED, CELH, CROX, CZR, GENI, HAIN, MGNI, MOD, OEC, PAR | consumer, growth, small caps, tariffs, technology, volatility |
MGNI MOD CELH PAR CROX GENI BNED |
Small-cap growth fund outperformed during Q1 tariff-driven volatility through concentrated holdings in technology-enabled businesses. Magnite leads with Netflix partnership and Google antitrust tailwinds. New thermal management play Modine captures EV and data center growth. Successful VIX hedging added 600bps during market stress. Portfolio positioned for secular growth despite tariff headwinds. |
| Jan 27 2025 | 2024 Q4 | BNED, CROX, CZR, HEES, MGNI, PAR, URI | Buybacks, earnings, M&A, small caps, technology, value | - | Small-cap value manager sees hidden opportunities despite recent underperformance, validated by HEES 100% takeover premium. Portfolio includes PAR Technology, Magnite, and share-repurchasing names like CROX and CZR. New administration's pro-business stance should drive M&A activity and benefit overlooked small caps as earnings growth resumes after two down years. |
| Oct 24 2024 | 2024 Q3 | CROX, CZR, GENI, HAIN, MGNI, OEC, PAR | Advertising, gaming, Restaurants, small caps, technology, value |
CZR GENI HAIN |
Choice Equities declined 1.8% in Q3 but maintains strong long-term performance with 15% annualized returns since 2017. The fund targets undervalued small-caps benefiting from digitization, gaming growth, and infrastructure trends. Key positions include PAR Technology's restaurant software expansion and gaming plays Caesars and Genius Sports. Manager expects secular themes to continue driving long-term outperformance. |
| Jul 29 2024 | 2024 Q2 | AMZN, DIS, DISH, FOX, FUBO, GOOGL, HEES, META, MGNI, MSFT, NFLX, NVDA, OEC, PAR, ROKU, WBD | Ad Tech, AI, Concentration, small caps, Streaming, technology, value | MGNI | Choice Equities' concentrated small-cap strategy weathered Q2 market concentration but positions for broadening recovery. Key holding Magnite wins Netflix CTV advertising contract, validating streaming monetization thesis. Portfolio trades at attractive valuations with anticipated earnings acceleration as monetary policy loosens and profit growth broadens beyond mega-cap tech dominance. |
| May 10 2024 | 2024 Q1 | CROX, HEES, PAR, SHAK, URI | earnings growth, Equipment Rental, infrastructure, Restaurants, small caps, technology |
CROX SHAK PAR HEES |
Choice Equities outperformed with 14.2% Q1 gains by investing in small-cap companies benefiting from infrastructure spending and technology upgrades. Key holdings Crocs, Shake Shack, Par Technology, and H&E Equipment are executing operational improvements while positioned for secular growth tailwinds. Small caps are entering a new profit cycle with attractive valuations despite accelerating earnings expectations. |
| Jan 22 2024 | 2023 Q4 | BXC, CROX, MGNI, OEC, PAR, SHAK, STGW, WCC | Building Products, Buybacks, Restaurants, small caps, technology, value |
BXC IPAR |
Choice Equities underperformed in 2023 due to focus on value stocks while growth dominated. Manager added building products distributor Bluelinx and restaurant software provider Par Technology. Despite near-term challenges, maintains conviction in value approach given attractive small-cap valuations and emerging profit cycle as inflation fades. |
| Oct 31 2023 | 2023 Q3 | CROX, MGNI, OEC, PLCE, SHAK, STGW, WCC | Advertising, consumer, industrials, Restaurants, small caps, value | SHAK | Choice Equities targets small/mid-cap value opportunities while large-cap tech trades at historic highs. Portfolio includes quality industrials at single-digit multiples and consumer brands like Crocs at 7x earnings. Despite Q3 underperformance driven by advertising weakness at Magnite, the Russell 2000's 11.5x forward multiple represents historically attractive entry point for patient capital. |
| Jul 14 2023 | 2023 Q2 | AAPL, CELH, CROX, MGNI, OEC, PLCE, SITE, STGW, WCC | Advertising, Concentration, Russell 2000, small caps, valuation, value |
MGNI STGW PLCE |
Choice Equities delivered 8% Q2 returns while positioning for small-cap outperformance as valuation disparities reach historic extremes. Manager added advertising plays Magnite and Stagwell plus margin recovery story Children's Place. With Russell 2000 at 13.6x versus mega-cap tech at 30x, historical patterns suggest multi-year tailwinds ahead for concentrated small-cap value approach. |
| May 2 2023 | 2023 Q1 | CELH, CROX, EAT, KO, MNST, OEC, PEP, PZZA, SITE, WCC | Banking, Beverages, earnings, industrials, Restaurants, small caps, value |
CROX CELH |
Small cap value manager trails benchmarks in Q1 amid banking turmoil but maintains conviction in attractive valuations. Major new position in Celsius Holdings reflects belief in energy drink growth story, while core holdings in Crocs and industrials offer compelling value at single-digit earnings multiples. Economic uncertainty creates opportunity for patient capital. |
| Jan 30 2023 | 2022 Q4 | CROX | - | - | |
| Oct 27 2022 | 2022 Q3 | CROX, FARM, OEC, SITE, WCC | - | - | |
| Jul 22 2022 | 2022 Q2 | CROX, FARM, META, NFLX, OEC, SITE | Balance Sheets, concentrated, consumer, discount, small caps, value |
CROX SITE |
Choice Equities Fund posted losses of 17.4% in Q2 but manager Scott sees compelling multi-year setup. Small caps trade at 20-year relative lows while balance sheets across consumers, corporates, and banks are healthiest in decades. New positions in Crocs and SiteOne at attractive valuations. Concentrated value approach positioned to capitalize on market pessimism and valuation dislocations. |
| Apr 21 2022 | 2022 Q1 | AZEK, CBT, FARM, GMS, INVE, OEC, TA, TREX, WSO | Building Products, consumer, Industrial, inflation, rates, small caps, value |
INVE AZEK TA OEC |
Choice Equities suffered a brutal Q1 with concentrated small-cap value positions hammered by inflation and rate spikes. Key holdings Identiv, GMS, and Azek drove most losses as growth stocks and building products collapsed. Despite the pain, the manager sees significant value in single-digit multiple holdings with insider buying, adding new positions in TA and OEC while maintaining conviction in the bottoms-up approach. |
| Feb 5 2021 | 2021 Q4 | FARM, GMS, INVE, SPWH | Building Materials, retail, small cap, technology, value | SPWH | Choice Equities delivered 36.9% returns in 2020, marking five years of 27.9% annualized gains by focusing on overlooked small-cap opportunities. Current portfolio blends value names like Sportsman's Warehouse and GMS trading at single-digit multiples with growth positions like Identiv. Manager views recent market correction and value rotation as validation of strategy, remaining excited about prospects despite near-term inflation and monetary policy headwinds. |
| Nov 19 2021 | 2021 Q3 | FARM, GMS, INVE | Building Materials, Coffee, Concentration, small caps, value |
FARM INVE GMS |
Small cap value manager maintains concentrated approach despite Q3 headwinds, with FARM operational progress overshadowed by COVID impacts and new GMS position offering attractive wallboard distribution opportunity. Strong long-term track record continues with selective focus on undervalued opportunities while market shows bifurcation between speculative excess and reasonable valuations in quality names. |
| Aug 18 2021 | 2021 Q2 | CVS, FARM, INVE, SIC | Concentration, cybersecurity, RFID, small caps, technology, value | INVE | Choice Equities delivered strong Q2 performance through concentrated small-cap value investing, successfully exiting Select Interior Concepts and initiating new position in RFID technology leader Identiv. Despite mixed macro signals from delta variant and inflation concerns, manager maintains conviction in overlooked small companies trading at substantial discounts to intrinsic value with 20%+ return potential. |
| May 10 2021 | 2021 Q1 | BNED, FARM, HOME | Coffee, retail, small cap, special situations, turnaround, value |
BNED FARM |
Small-cap value fund delivered +29.2% Q1 returns through concentrated positions in undervalued companies. Exited Barnes & Noble Education after doubling, initiated Farmer Brothers coffee turnaround story. Portfolio maintains 17 concentrated positions with 70% net exposure via hedges. Manager bullish on consumer strength but cautious on extended valuations and inflation risks. |
| Feb 9 2021 | 2020 Q4 | APPS, BXC, CELH, CTRN, HOME, MGNI, PBI, SIC, TA, VVI | Advertising, E-Commerce, Reopening, small caps, Travel, value, volatility | - | Choice Equities delivered +76.3% annual returns through concentrated small cap investing during 2020's volatile conditions. Digital advertising leader Magnite and e-commerce beneficiary Pitney Bowes drove outperformance alongside value picks and reopening plays. The fund's 70-90% net exposure strategy balanced upside capture with downside protection. Manager sees continued opportunities in overlooked small caps despite tougher comparisons ahead. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q2 |
Sports BettingGENI secured extended NFL data rights deal through 2029 and exclusive NCAA data rights through 2032, providing visibility into data costs and enabling incremental revenues to flow through at attractive margins. Sports betting legalization in Brazil and pending U.S. states, plus growth in in-game betting where GENI generates higher take rates, creates ongoing revenue opportunities in a market growing at low-double digit rates. |
Sports Betting Data Rights Gaming In-game Betting Take Rates |
AdvertisingMGNI benefited from advertiser TV budgets shifting from traditional linear TV to CTV (streaming), reaching a critical equilibrium mark. Ad budgets remained largely intact despite economic concerns, with Netflix's advertising efforts gaining scale and the broader tide turning toward streaming advertising. |
CTV Streaming Linear TV Ad Budgets Netflix | |
Data CentersMOD's Climate Solutions segment benefits from durable demand for data center cooling products, supporting attractive topline growth that can be leveraged into mid-teens earnings growth in coming years as part of the company's transformation under CEO Neil Brinker. |
Data Center Cooling Climate Solutions Cooling Products | |
| 2025 Q1 |
Trade PolicyThe new administration implemented stunningly high tariffs on an astoundingly high number of imported goods at a breakneck pace, creating considerable market volatility and forcing companies into tariff-coping mechanisms and scenario planning. Markets declined significantly but recovered as the administration walked back from the highest announced tariff levels in pursuit of trade deals. |
Tariffs Trade Policy Volatility |
AdvertisingNetflix's ad-supported offering is growing with a goal to produce $9B of ad-generated revenues by 2030. Magnite serves as Netflix's exclusive supply-side platform provider, with this relationship alone potentially doubling Magnite's CTV revenues. The DOJ ruled Google acted as a monopoly in ad tech, which should bolster Magnite's competitive position. |
CTV Programmatic Netflix Google SSP | |
Data CentersModine has built leadership positions in manufacturing thermal management solutions for data centers, driven by growing need for digital transformation. The company focuses on selling the highest cost, most premium equipment that offers the lowest total cost of ownership for customers. |
Thermal Cooling Digital Infrastructure | |
Electric VehiclesModine has built leadership positions in manufacturing thermal management solutions for electric vehicles, with robust demand driven by the growing need for global electrification. The company expects to grow cash flows and earnings at a high teens rate sustainably over the next several years. |
Electrification Thermal EV Growth | |
BeveragesCelsius transitioned from high-growth beverage brand valuation to slow-growth consumer staple as sales growth softened due to inventory build and competitive response from Monster and Red Bull. The Alani Nu acquisition gives them 16% share of the energy drink market with attractive growth profile at cheap valuations. |
Energy Drinks Growth Acquisition | |
Sports BettingGenius Sports is executing as expected and should continue posting high teens topline growth and EBITDA margin expansion on the back of secular growth in online sports betting. The company operates in an emerging duopoly of sports betting data provision with Sportsrader. |
Gaming Data Digital Growth | |
| 2024 Q4 |
Small CapsManager focuses on investing down the cap scale in lower valuation multiples despite recent underperformance. Russell 2000 has begun demonstrating earnings growth again with attractive growth anticipated throughout the coming year, potentially driving broadening of returns across the marketplace. |
Russell 2000 Valuation Earnings Growth Market Cap Performance |
ValuePortfolio emphasizes lower-multiple, value-oriented securities despite recent underperformance versus growth stocks. The HEES acquisition at 100% premium validates the manager's view that significant value is hiding in plain sight in overlooked areas of the market. |
Valuation Multiples Undervalued Premium Discount | |
BuybacksMultiple holdings including CROX and CZR are actively repurchasing shares. CROX continues shrinking share count through steady repurchases at low-double digit free cash flow yield, while CZR has an active share repurchase plan supporting attractive valuations. |
Share Repurchase Share Count Free Cash Flow Capital Return | |
| 2024 Q3 |
GamingThe fund holds positions in Caesars Entertainment and Genius Sports, both operating in the entertainment, casino and gaming space. Caesars benefits from secular tailwinds in online sports betting and iGaming, while Genius has exclusive data rights deals with major leagues including the NFL and English Premier League. |
Sports Betting Casinos Entertainment iGaming Data Rights |
CloudPAR Technology continues winning new logos in enterprise restaurant arena for its unified digital commerce offering and is expanding into convenience stores. The company is positioned for 20% organic growth as restaurants and industries move to cloud-based software platforms. |
SaaS Enterprise Software Digital Commerce Restaurant Technology | |
AdvertisingMagnite operates in the digital advertising space and looks attractive on its own merits, though shares could become particularly interesting should industry anti-trust events break their way. The company remains well-positioned in its industry. |
Ad Tech Digital Advertising Programmatic | |
| 2024 Q2 |
AIAI enthusiasm morphed into an outright AI vortex during Q2, with possibilities around AI use cases and productivity enhancements captivating public imaginations and creating an arms race mentality in corporate boardrooms. Four large hyperscalers intend to spend approximately $200B this year on AI chips, with the market capitalizing these large capital flows and rewarding recipients like Nvidia with higher trading multiples. |
Artificial Intelligence Hyperscalers Productivity Chips Capital Spending |
StreamingStreaming is now the most dominant form of content consumption, commanding nearly 40% share across all channels. As consumers grow tired of multiple subscription fees, many are opting for ad-supported streaming models, with ads emerging as the dominant means of monetization for television of the future, potentially exceeding the linear TV ad market. |
Connected TV AVOD Programmatic Subscription Monetization | |
Ad TechThe programmatic advertising market shows strong growth potential, particularly in Connected TV where nearly three-quarters of advertising is done programmatically. Supply Path Optimization trends are driving consolidation, with advertisers preferring fewer, higher-quality platform relationships over numerous fragmented exchanges. |
Programmatic Supply Side Platform CTV Take Rates Consolidation | |
Small CapsRecent market activity shows renewed investor interest in small and mid cap stocks, which are anticipating accelerating earnings growth next year. This cohort offers attractive durable earnings growth and valuations, with the relative valuation disparity to large caps remaining exceptionally large by historical context. |
Valuation Disparity Earnings Growth Market Leadership Broadening | |
| 2024 Q1 |
Infrastructure SpendingThe Infrastructure Investment and Jobs Act allocates more than $1 trillion over ten years, complemented by the Inflation Reduction Act and CHIPS Act. Construction spending in manufacturing reached $225 billion in 2023, more than doubling the 2015 peak. This represents a threefold increase compared to historical infrastructure programs when adjusting for inflation. |
Infrastructure IIJA Construction Manufacturing Government |
RestaurantsRestaurant technology is experiencing long-running tailwinds driven by an upgrade cycle as mission critical equipment moves to the cloud. Par Technology's acquisitions position it as a one-stop shop for unified commerce offerings with broader addressable markets internationally and in adjacent products like payments and loyalty programs. |
Restaurant Technology Cloud POS Software | |
Small CapsSmall caps look set to begin a new profit cycle with earnings growth expected to resume in the coming quarter and accelerating through 2025. They trade at attractive relative and absolute valuations despite expectations for an accelerating profit cycle. |
Small Cap Earnings Valuations Profit Cycle Growth | |
| 2023 Q4 |
ValueManager focuses on low multiple stocks of quality businesses at discounted valuations. Despite challenging backdrop in 2023, continues to believe this approach offers best chance of outperforming over sustained periods. |
Value Cheap Discounted Multiple Quality |
Small CapsPortfolio primarily focused on small and mid-cap stocks which remain remarkably cheap by historical context. Manager notes seven years of lean performance for small caps versus large caps but sees opportunity ahead. |
Small Cap Russell 2000 Valuation Disparity Cheap | |
Building ProductsAdded Bluelinx Holdings as building products distributor with improved product mix shift from structural to specialty products, driving higher margins and EBITDA potential from 5% to 10%. |
Building Products Lumber Millwork Construction Distribution | |
| 2023 Q3 |
Small CapsManager emphasizes that small and mid-cap stocks have severely lagged larger peers and are now historically attractive. The Russell 2000 fell below pre-pandemic levels, with forward earnings multiple of S&P 600 at 11.5x, a level only seen three times since 1999. All prior instances produced double-digit annualized returns across multiple years. |
Russell 2000 Valuations Outperformance Historical Multiples |
ValuePortfolio holdings trade at attractive valuations with industrials at single-digit earnings multiples, Children's Place generating nearly half its market cap in cash with mid-20s free cash flow yield, and Crocs trading at approximately 7x earnings despite owning two billion-dollar shoe brands. Manager highlights the types of values available in today's market. |
Multiples Cash Flow Earnings Undervalued Opportunities | |
AdvertisingHoldings Magnite and Stagwell offer double-digit free cash flow yields and attractive growth prospects, both positioned to benefit from a pickup in advertising spend. Weakness in spending, particularly in Magnite's CTV vertical, appeared midsummer and persisted, but spending effects should reverse with upcoming political spending cycle. |
CTV Political Spending Recovery Growth | |
| 2023 Q2 |
Small CapsSmall caps significantly undervalued relative to large caps with Russell 2000 trading at 13.6x NTM PE versus 30x for mega-cap tech. Manager expects catch-up performance after 17-month streak of negative returns ended in June. Historical patterns suggest multi-year tailwinds when concentration unwinds. |
Russell 2000 Valuation Undervalued Concentration |
AdvertisingDigital advertising spending expected to increase with new portfolio additions Magnite and Stagwell positioned to benefit. Political spending over next year and half should provide additional tailwinds for ad-focused companies with strong digital capabilities. |
Digital Political CTV Marketing | |
ValueDramatic valuation differences across market cap sizes create opportunities. Manager focuses on bottoms-up stock selection in undervalued names while mega-caps trade at extreme multiples. Children's Place example shows potential for 2x normalized EPS if margins normalize. |
Undervalued Bottoms-up Normalized Margins | |
| 2023 Q1 |
Small CapsManager focuses on small cap stocks which continue to trade at attractive valuations versus larger peers, with small caps at more than twenty-year lows on many absolute and relative valuation metrics. The fund trails small cap benchmarks in the quarter but maintains focus on this segment. |
Small Cap Valuations Russell 2000 |
ValuePortfolio emphasizes companies with attractive valuations that already account for softening economic environment. Holdings like industrials trade at single digit multiples of growing earnings, representing substantial discounts to peers despite being more profitable. |
Valuations Discount Earnings | |
BeveragesMajor new position in Celsius Holdings represents belief in energy drink category growth and company's market share gains. Manager notes sugar water can be amazing business when it works, citing historical success of Coca-Cola, Pepsi and Monster as precedents. |
Energy Drinks Distribution Growth | |
RestaurantsRestaurant holdings positioned for margin expansion as companies historically slow to reduce menu prices even when input costs decline. Both Papa John's and Brinker International expected to benefit from operating margin inflection as they recover from prior food cost surge. |
Margins Food Costs Pricing | |
| 2022 Q2 |
ValueManager emphasizes that portfolio companies are trading at unusually high discounts to fair value despite disappointing performance. Highlights specific valuations like Crocs at 5x earnings and 6x EBITDA, and notes that small caps are as cheap as they have been in 20 years both absolutely and relative to large caps. |
Valuation Discount Cheap Fair Value Multiples |
Small CapsPortfolio is concentrated in small cap stocks with Russell 2000 as primary benchmark. Manager notes small caps experienced worst start to a year ever and are trading at attractive valuations relative to large caps, presenting compelling opportunities for multi-year outperformance. |
Russell 2000 Small Cap Relative Value Outperformance | |
Consumer FinanceManager highlights that consumer balance sheets are in outstanding shape at levels not seen in 20 years, with household liabilities relative to disposable income near twenty-year lows. This represents a fundamental positive underpinning for the economy with lasting implications. |
Balance Sheets Household Leverage Financial Health | |
| 2022 Q1 |
InflationRapid acceleration in inflation was a major driver of poor performance in Q1. Commodity prices surged due to supply chain disruptions from Omicron shutdowns and Russia's invasion of Ukraine, accelerating Fed monetary policy shifts and negatively impacting operating results across industries through higher input costs. |
Inflation Commodities Supply Chain Fed Policy Input Costs |
RatesRising interest rates drove a rotation away from growth stocks and negatively impacted equity valuations across the portfolio. The manager was caught wrong-footed by the rapid acceleration in rate increases, which occurred much faster than anticipated due to geopolitical events. |
Interest Rates Fed Policy Growth Stocks Valuations | |
Building ProductsBuilding products stocks experienced their second worst quarter in over a decade. GMS and AZEK, both serving housing-related end markets, declined significantly despite attractive valuations and secular growth trends in composite decking gaining market share from wood. |
Building Products Housing Construction Composite Decking | |
ValueThe manager sees significant value embedded in the current portfolio, with many holdings trading at single-digit earnings multiples and recent insider purchases. Valuation dispersion within markets remains at generational highs, creating opportunities for bottom-up stock selection. |
Value Valuations Earnings Multiples Dispersion | |
| 2021 Q4 |
ValueManager discusses the growth versus value debate extensively, noting value stocks have been ascendant lately and making strides in recouping over a decade of underperformance. Portfolio holds value-oriented names like GMS and SPWH that trade at single digit multiples while positioned to produce double digit earnings growth. |
Value Growth Multiples Underperformance |
Small CapsSmall cap stocks recently entered a bear market with the Russell 2000 down more than 20% from November highs and the average stock off 37% from 52-week highs. Manager focuses on $300M to $3B market cap range where odds are higher to find well-run companies and develop differentiated views. |
Small Cap Russell 2000 Bear Market | |
InflationInflation, long dormant, is suddenly clocking in at the highest levels in 40 years by some measures. Monetary policy tightening looks to be imminent as investors parse out these effects and evaluate their lasting impact. |
Inflation Monetary Policy Fed | |
| 2021 Q3 |
CoffeeFarmer Brothers is positioned for recovery as the company completed its fix phase, exited inefficient facilities, and migrated to a state-of-the-art roasting facility. Despite current volume depression from COVID, the company has returned to pre-COVID gross margins and is seeing green shoots in volumes. |
Coffee Roasting Distribution Recovery |
Building MaterialsGMS represents an attractive opportunity as the largest wallboard distributor with strong management, advantaged industry structure, and multiple growth drivers including pricing discipline, volume growth, and acquisitions all potentially aligning simultaneously for the first time. |
Wallboard Distribution Construction Consolidation | |
Small CapsThe manager focuses on small stocks where greater price and informational inefficiencies can be found, concentrating investments in 10-15 best ideas with the goal of generating 20% annualized returns through careful selection of undervalued opportunities. |
Small Cap Inefficiencies Concentration Value | |
| 2021 Q2 |
RFIDIdentiv operates in RFID and NFC technology with potential inflection point driven by Apple's 2018 decision to open NFC access on iPhones. Company has elephant-sized contract opportunities including CVS trial for visually impaired prescription access, with potential for hundreds of millions of units annually at $0.20+ pricing. |
RFID NFC IoT Connectivity Semiconductors |
CybersecurityIdentiv's Premises segment applies RFID/NFC technology to security platforms for buildings worldwide, from government facilities to schools and hospitals. The Hirsch brand enjoys large installed base in federal facilities and generates recurring software revenue that could grow to half of segment revenues. |
Security Access Control Government Software Recurring Revenue | |
Small CapsManager focuses on small stocks where greater price and informational inefficiencies can be found. Portfolio concentrates on 10-15 best ideas with preference for small companies like Identiv doing ~$100M in revenues that may be overlooked due to size. |
Small Cap Inefficiencies Concentration Value | |
| 2021 Q1 |
CoffeeFarmer Brothers represents a turnaround opportunity in the coffee roasting and distribution industry. The company has completed a multi-year transition to automated facilities and installed new CEO Deverl Maserang with impressive turnaround experience. Management is implementing operational improvements including HighJump handheld devices for delivery representatives and rolling out new SKUs for promising brands. |
Coffee Turnaround Distribution Automation Supply Chain |
Small CapsThe manager focuses on small stocks where greater price and informational inefficiencies can be found. The portfolio concentrates on 10-15 best ideas with a preference for small cap investments. The fund structure is designed to preserve the ability to take concentrated positions in small companies. |
Small Cap Inefficiencies Concentration Value | |
ValueThe investment approach focuses on buying growing, understandable businesses at substantial discounts to intrinsic value. The manager seeks companies with attractive risk-reward dynamics, particularly around economic bottoms when Wall Street extrapolates negative trends too far into the future. |
Value Intrinsic Value Discount Risk Reward | |
| 2020 Q4 |
E-commerceThe pandemic accelerated e-commerce adoption, particularly benefiting Pitney Bowes' Global Ecommerce business which grew domestic parcels shipped by 76% in Q4 2020. The company moved from 12 to 63 top 1000 E-Retailer clients, passing DHL to become number four on the list. |
Shipping Logistics Digital Growth |
AdvertisingDigital advertising beneficiaries performed exceptionally well, with Magnite leading gains as programmatic advertising accelerated. Key customer wins like Disney/Hulu and Omnicom, plus the SpotX acquisition, positioned Magnite as a share-gaining winner in this attractive growing market. |
Programmatic Digital CTV Growth | |
TravelReopening plays like Viad Corp represent attractive opportunities as the company's GES event staffing business and Pursuit destination hotels were thriving pre-pandemic. Pent-up demand for high-end travel and delayed conventions could drive cash flows above prior peaks in 2022 and beyond. |
Recovery Hotels Events Reopening | |
Small CapsThe manager focuses on small cap opportunities where greater price and informational inefficiencies can be found. The Russell 2000 experienced both its worst and best quarters ever in 2020, creating exceptional stock picking opportunities in this volatile environment. |
Inefficiencies Volatility Opportunities Value |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 17, 2025 | Fund Letters | Mitchell Scott | GENI | Genius Sports Limited | Communication Services | Interactive Media & Services | Bull | NYSE | Betting, Data, growth, Margins, valuation | Login |
| Jul 17, 2025 | Fund Letters | Mitchell Scott | MGNI | Magnite, Inc. | Communication Services | Advertising | Bull | NASDAQ | advertising, Budgets, CTV, marketshare, Regulation | Login |
| Jul 17, 2025 | Fund Letters | Mitchell Scott | MOD | Modine Manufacturing Company | Consumer Discretionary | Building Products | Bull | NYSE | Cooling, growth, Margins, transformation, valuation | Login |
| Jul 17, 2025 | Fund Letters | Choice Equities Capital Management | GENI | Genius Sports Limited | Communication Services | Interactive Media & Services | Bull | NYSE | Data Rights, digital media, duopoly, EBITDA Margin Expansion, Gaming, growth, Rule of 40, SaaS, Sports betting, Sports Technology | Login |
| Jul 17, 2025 | Fund Letters | Choice Equities Capital Management | MGNI | Magnite, Inc. | Communication Services | Interactive Media & Services | Bull | NASDAQ | Ad Tech, Connected tv, CTV, digital advertising, DOJ Antitrust, market share gains, programmatic advertising, Streaming, Supply Side Platform | Login |
| Jul 17, 2025 | Fund Letters | Choice Equities Capital Management | MOD | Modine Manufacturing Company | Industrials | Industrial Machinery | Bull | NYSE | Climate Solutions, Danaher Business System, data center cooling, Industrial Transformation, margin expansion, operational excellence, portfolio optimization, share repurchase, Value | Login |
| May 12, 2025 | Fund Letters | Choice Equities Capital Management | MGNI | Magnite, Inc. | Advertising Agencies | Interactive Media & Services | Bull | NASDAQ | Ad Tech, Connected tv, CTV, digital advertising, DOJ Antitrust, Netflix Partnership, programmatic advertising, Supply Side Platform | Login |
| May 12, 2025 | Fund Letters | Choice Equities Capital Management | MOD | Modine Manufacturing Company | Auto Parts | Industrial Machinery | Bull | New York Stock Exchange | Danaher Business System, data centers, Digital transformation, Electric Vehicles, Electrification, industrial manufacturing, Premium Positioning, thermal management | Login |
| May 12, 2025 | Fund Letters | Choice Equities Capital Management | CELH | Celsius Holdings, Inc. | Beverages - Non-Alcoholic | Soft Drinks | Bull | NASDAQ | Alani Nu Acquisition, consumer staples, Convenience Store Channel, Distribution Partnership, Energy drinks, Functional Beverages, market share growth | Login |
| May 12, 2025 | Fund Letters | Choice Equities Capital Management | PAR | Par Technology Corporation | Software - Application | Application Software | Bull | New York Stock Exchange | Chain Restaurants, digital commerce, operating leverage, Point of Sale, Restaurant technology, SaaS, unified platform | Login |
| May 12, 2025 | Fund Letters | Choice Equities Capital Management | CROX | Crocs, Inc. | Footwear & Accessories | Footwear | Bull | NASDAQ | Brand Recovery, Footwear, HeyDude Brand, multiple expansion, share repurchases, turnaround story, Vietnam Tariffs | Login |
| May 12, 2025 | Fund Letters | Choice Equities Capital Management | GENI | Genius Sports Limited | Internet Content & Information | Interactive Media & Services | Bull | New York Stock Exchange | duopoly, EBITDA Margin Expansion, Gaming Data, Relative Valuation, secular growth, Sports betting, Sports Technology | Login |
| May 12, 2025 | Fund Letters | Choice Equities Capital Management | BNED | Barnes and Noble Education, Inc. | Specialty Retail | Specialty Retail | Bull | New York Stock Exchange | Campus Bookstores, Counter-cyclical, EBITDA Multiple Expansion, Education Services, First Day Complete, Russell 2000 Addition, Value Investment | Login |
| Oct 24, 2024 | Fund Letters | Choice Equities Capital Management | CZR | Caesars Entertainment Inc. | Consumer Discretionary | Casinos & Gaming | Bull | NASDAQ | Casinos, digital growth, entertainment, Gaming, iGaming, Las Vegas, Leisure Travel, Sports betting, Value | Login |
| Oct 24, 2024 | Fund Letters | Choice Equities Capital Management | GENI | Genius Sports Limited | Communication Services | Interactive Media & Services | Bull | NYSE | Data Rights, Exclusive Partnerships, Gaming Infrastructure, growth, NFL, Premier League, Sports betting, technology | Login |
| Oct 24, 2024 | Fund Letters | Choice Equities Capital Management | HAIN | Hain Celestial Group Inc. | Consumer Staples | Packaged Foods & Meats | Bull | NASDAQ | consumer staples, cost savings, Free Cash Flow, margin expansion, Organic Foods, Portfolio simplification, turnaround, Value | Login |
| Jul 29, 2024 | Fund Letters | Choice Equities Capital Management | MGNI | Magnite, Inc. | Communication Services | Interactive Media & Services | Bull | NASDAQ | Ad Tech, AVOD, Connected tv, CTV, digital advertising, Media Technology, Netflix, programmatic advertising, Streaming, Supply Side Platform | Login |
| Apr 25, 2024 | Fund Letters | Choice Equities Capital Management | CROX | Crocs Inc. | Consumer Discretionary | Footwear | Bull | NASDAQ | Brand Marketing, Consumer Discretionary, Distribution, Footwear, inventory management, Leadership Change, Outlet Stores, turnaround, Value | Login |
| Apr 25, 2024 | Fund Letters | Choice Equities Capital Management | SHAK | Shake Shack Inc. | Consumer Discretionary | Restaurants | Bull | NYSE | Consumer Discretionary, Fast casual, growth, Kiosks, Leadership Change, margin expansion, Professionalization, Restaurants, supply chain, technology | Login |
| Apr 25, 2024 | Fund Letters | Choice Equities Capital Management | PAR | Par Technology Corporation | Information Technology | Application Software | Bull | NYSE | Acquisitions, ARR, consolidation, international expansion, Loyalty Platform, Point of Sale, Restaurant technology, SaaS, Software, Value | Login |
| Apr 25, 2024 | Fund Letters | Choice Equities Capital Management | HEES | H&E Equipment Services Inc. | Industrials | Trading Companies & Distributors | Bull | NASDAQ | consolidation, construction, Equipment Rental, IIJA, Industrials, infrastructure, multiple expansion, Pricing power, Sun Belt, Value | Login |
| Jan 22, 2024 | Fund Letters | Choice Equities Capital Management | BXC | Bluelinx Holdings, Inc. | Materials | Building Products | Bull | NYSE | balance sheet, Building Products, Distributor, EBITDA, Engineered Wood, Housing, Lumber, margin expansion, Millwork, Share Buybacks, Specialty Products, turnaround | Login |
| Jan 22, 2024 | Fund Letters | Choice Equities Capital Management | IPAR | Par Technology Corporation | Information Technology | Application Software | Bull | NYSE | Annual Recurring Revenue, ARR, Burger King, divestiture, Government Defense, growth, Hardware, Point of Sale, POS, QSR, Quick Service Restaurant, Restaurant technology, SaaS, Software | Login |
| Jul 14, 2023 | Fund Letters | Choice Equities Capital Management | MGNI | Magnite, Inc. | Advertising Agencies | Interactive Media & Services | Bull | NASDAQ | adtech, cash generation, Connected tv, CTV, digital advertising, growth, market share, Political advertising | Login |
| Jul 14, 2023 | Fund Letters | Choice Equities Capital Management | STGW | Stagwell Inc. | Advertising Agencies | Advertising | Bull | NASDAQ | acquisition strategy, advertising, Blue Chip Clients, Digital transformation, Free Cash Flow, Marketing Agency, Political Spending, share repurchases | Login |
| Jul 14, 2023 | Fund Letters | Choice Equities Capital Management | PLCE | The Children's Place, Inc. | Apparel Manufacturing | Specialty Retail | Bull | NASDAQ | Children's Apparel, cost-cutting, Cotton Prices, Cyclical Recovery, freight rates, input costs, insider buying, Margin recovery, Specialty retail, Value | Login |
| May 2, 2023 | Fund Letters | Choice Equities Capital Management | CROX | Crocs, Inc. | Footwear & Accessories | Footwear | Bull | NASDAQ | Accessories, Consumer Discretionary, direct-to-consumer, Footwear, international expansion, retail, Value | Login |
| May 2, 2023 | Fund Letters | Choice Equities Capital Management | CELH | Celsius Holdings, Inc. | Beverages - Non-Alcoholic | Soft Drinks | Bull | NASDAQ | Beverages, consumer staples, Distribution Partnership, Energy drinks, growth, international expansion, market share gains | Login |
| Jul 22, 2022 | Fund Letters | Choice Equities Capital Management | CROX | Crocs, Inc. | Footwear & Accessories | Footwear | Bull | NASDAQ | acquisition, Brand Revitalization, Consumer Discretionary, direct-to-consumer, Footwear, Geographic Expansion, product innovation, Social Media Marketing, turnaround, Value | Login |
| Jul 22, 2022 | Fund Letters | Choice Equities Capital Management | SITE | SiteOne Landscape Supply, Inc. | Industrial Distribution | Trading Companies & Distributors | Bull | New York Stock Exchange | acquisition growth, balance sheet strength, Distribution, Fragmented Industry, Landscaping, market consolidation, Near Monopoly, Value | Login |
| Apr 21, 2022 | Fund Letters | Choice Equities Capital Management | INVE | Identiv Inc | Building Products & Equipment | Technology Hardware, Storage & Peripherals | Bull | NASDAQ | Access Control, Gross Margin Pressure, growth, Physical Security, RFID, technology | Login |
| Apr 21, 2022 | Fund Letters | Choice Equities Capital Management | AZEK | The AZEK Company Inc | Other | Building Products | Neutral | New York Stock Exchange | Building Products, capacity expansion, composite decking, duopoly, margin pressure, repair & remodel, secular growth | Login |
| Apr 21, 2022 | Fund Letters | Choice Equities Capital Management | TA | TravelCenters of America Inc | Other | Specialty Retail | Bull | NASDAQ | consolidation, EBITDAR Multiple, Highway Real Estate, Refranchising, Travel Centers, Truck Stops, Value | Login |
| Apr 21, 2022 | Fund Letters | Choice Equities Capital Management | OEC | Orion Engineered Carbons SA | Specialty Chemicals | Chemicals | Bull | New York Stock Exchange | Capacity constraints, Carbon black, EPA Compliance, Free Cash Flow, Industrial, insider buying, oligopoly, specialty chemicals | Login |
| Nov 19, 2021 | Fund Letters | Choice Equities Capital Management | FARM | Farmer Brothers Co. | Packaged Foods | Packaged Foods & Meats | Bull | NASDAQ | Coffee Roaster, COVID Recovery, Equipment Services, Foodservice Distribution, manufacturing, operational efficiency, product innovation, turnaround | Login |
| Nov 19, 2021 | Fund Letters | Choice Equities Capital Management | INVE | Identiv Inc. | Building Products & Equipment | Technology Hardware, Storage & Peripherals | Bull | NASDAQ | backlog growth, Cannabis Tracking, Digital transformation, IoT Connectivity, NFC, Physical Security, RFID Technology, Team Expansion | Login |
| Nov 19, 2021 | Fund Letters | Choice Equities Capital Management | GMS | GMS Inc. | Other | Trading Companies & Distributors | Bull | New York Stock Exchange | Acquisitions, Building Products, construction, market leader, oligopoly, Pricing power, valuation discount, Wallboard Distribution | Login |
| Aug 18, 2021 | Fund Letters | Choice Equities Capital Management | INVE | Identiv, Inc. | Building Products & Equipment | Technology Hardware, Storage & Peripherals | Bull | NASDAQ | Access Control, Digital Connectivity, growth, IoT, NFC, RFID, Security, semiconductors, small-cap, technology hardware | Login |
| May 10, 2021 | Fund Letters | Choice Equities Capital Management | BNED | Barnes & Noble Education Company, Inc. | Specialty Retail | Specialty Retail | Bull | New York Stock Exchange | Campus Retail, COVID Recovery, Digital Education, Education, Special Situation, Temporary Disruption, turnaround | Login |
| May 10, 2021 | Fund Letters | Choice Equities Capital Management | FARM | Farmer Brothers, Co. | Packaged Foods | Packaged Foods & Meats | Bull | NASDAQ | Automation, Coffee Roasting, COVID Recovery, Direct Store Distribution, Facility Modernization, new management, operational efficiency, turnaround | Login |
| Feb 5, 2021 | Fund Letters | Choice Equities Capital Management | SPWH | Sportsman's Warehouse Holdings, Inc. | Specialty Retail | Specialty Retail | Bull | NASDAQ | Ammunition, Failed Merger, Guns, net cash, Outdoor Retail, Small Format Stores, Special Situation, Sporting goods, store expansion, Value | Login |
| Oct 31, 2023 | Fund Letters | Choice Equities Capital Management | SHAK | Shake Shack, Inc. | Consumer Discretionary | Restaurants | Bull | NYSE | Brand, Fast casual, Kiosks, margin expansion, Restaurants, store expansion, technology, turnaround | Login |
| TICKER | COMMENTARY |
|---|---|
| GENI | The digital gaming rights provider continues to execute as expected with several favorable developments recently occurring. In June, the NFL re-upped and extended its data rights deal with GENI to 2029, well in advance of the 2027 expiration date of the previously existing agreement. Genius also recently secured an exclusive data rights deal with the NCAA through 2032. Together, these data rights deals, as well as the lion's share of data rights deals which were renewed last year, give the company a great deal of visibility into its data costs going forward, paving the way for future incremental revenues to flow through to the bottom line at very attractive incremental margins going forward. With sports-betting now legal in Brazil, legalization in a handful of meaningful U.S. states still to come and a trend that favors continued growth in in-game betting where the company generates a higher take rate on bets placed, incremental revenue opportunities should continue to follow at a healthy pace in a market that itself should continue to grow at a low-double digit rate. Ad revenues are also quickly emerging as meaningful source of new revenues, with Genius's nascent FanHub engine producing another attractive revenue stream for advertisers seeking to tie ads directly to specific players. Recently the company has stated it is now targeting a 30% EBITDA margin by 2030, a step higher from the prior target of 25%. With strong incremental margins and attractive topline growth likely near 20% for the next several years, the company looks set to grow EBITDA at a ~30%+ CAGR for the next several years. This financial algorithm will sustain the company solidly into the Rule of 40 club (which sums EBITDA margins and revenue growth) for the foreseeable future where most peers trade at 6x sales or better. Today trading at less than 4x sales and at an increasingly wide valuation disparity relative to larger peer Sportsradar Group (SRAD), it stands to reason strong revenues and incremental profits and greater investor understanding of this company and its duopolistic industry structure will continue to provide tailwinds to shares in time. |
| MGNI | Market volatility and economic concerns were the primary forces pushing MGNI to trade in such a wide range during the first half of the year, as markets briefly priced severe cuts to ad budgets into the stock. As economic storm clouds lifted, evidence began to emerge that ad budgets largely remain intact relative to prior expectations, and though the company suspended its guidance for the second half of the year, it seems its prior views will likely be sustained. Aside from positive channel checks, encouraging peer reports and general news of resilient ad spending, perhaps more interestingly, these checks suggest that advertiser television ad budgets now favor CTV (i.e., streaming) over traditional linear TV, a shift in advertiser TV budgets long underway that has reached the critical equilibrium mark. Netflix is of course some part of this, as their advertising efforts continue to gain scale, but the tide is also turning more broadly. The company's recent earnings call also produced some noteworthy data points, as management highlighted the benefits of potential market share gains should the DOJ force any remedies on Google as a result of the ad tech trial ruling issued in April. The remedies trial remains set for September 22nd. Developments there will likely be contested and remain somewhat unpredictable. A second ad tech trial will soon start in August in Texas, which is also likely to have some ramifications on potential outcomes. Suffice it say, court filings and testimony transcripts make for interesting reading, and we are tracking developments closely. For now, and until further news breaks, it is encouraging to see the company continuing to announce a steady stream of new customer wins, recently adding Amazon, Pinterest, Redfin and Paramount Australia to a customer list that has been growing impressively lately. |
| MOD | Since our introduction of this new holding last quarter, Modine Manufacturing Company (MOD) has continued to execute effectively under CEO Neil Brinker's leadership, leveraging the Danaher Business System (DBS) playbook to drive robust performance. Despite offering a wider than expected initial guidance range for FY 2026 due to difficult to forecast macro conditions at the time of reporting last quarter, the company still expects to sustain attractive topline growth which can be leveraged into mid-teens earnings growth in coming years. These financial results should be supported in part by durable demand for its data center cooling products in its Climate Solutions segment as well as sizeable margin enhancements in its slower growing Performance Technology segment. The transformation, now four years in under CEO Brinker, is off to a promising start as the company continues to move its mix of business units into higher return, more attractive end markets. Thus far, management has proven adept at targeting smart tuck-in acquisitions in high growth end markets where it can leverage its climate control technological expertise while also pruning its portfolio of businesses by parting ways with business units serving less attractive end markets. Some parallels can be drawn by examining the long-term success of companies like Roper Technologies, Inc. (ROP), given a shared philosophical view in how the application of a lean and Kaizen focused operational playbook can be supplemented with smart acquisitions informed by the 80/20 philosophy to shape an attractive portfolio of businesses. The $100M share repurchase program, initiated last quarter, should enable the company to capitalize on the stock's current trading multiple of ~16x NTM P/E, a valuation which should prove attractive given the long-horizon growth opportunity in front of the company. |
| BNED | Today, the top six holdings are consistent with those highlighted in the first quarter and include Barnes & Noble Education, Inc. (BNED), CELH, GENI, MGNI, MOD and Par Technology Corporation (PAR). |
| CELH | Shares of Celsius Holdings, Inc. (CELH) and contributions from VIX options were the other most impactful drivers of return in the quarter, though several smaller positions together made a meaningful contribution in aggregate as well. |
| PAR | Today, the top six holdings are consistent with those highlighted in the first quarter and include Barnes & Noble Education, Inc. (BNED), CELH, GENI, MGNI, MOD and Par Technology Corporation (PAR). |
| SRAD | Today trading at less than 4x sales and at an increasingly wide valuation disparity relative to larger peer Sportsradar Group (SRAD), it stands to reason strong revenues and incremental profits and greater investor understanding of this company and its duopolistic industry structure will continue to provide tailwinds to shares in time. |
| ROP | Some parallels can be drawn by examining the long-term success of companies like Roper Technologies, Inc. (ROP), given a shared philosophical view in how the application of a lean and Kaizen focused operational playbook can be supplemented with smart acquisitions informed by the 80/20 philosophy to shape an attractive portfolio of businesses. |
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