| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 7.58% | 3.58% | 3.58% |
Frank Value Fund returned 3.58% in Q1 2026, slightly underperforming the Russell Midcap Value Index at 3.68%, but maintaining strong long-term outperformance with 67% total returns since 2022 versus 28% for the benchmark. Manager Brian Frank continues his value-focused strategy, highlighting Microsoft's 20% decline and plummeting free cash flow estimates as validation of his previous warnings about technology valuations. The fund recently purchased a healthcare company with an 8% FCF yield and AI-enabled growth opportunities, contrasting with Microsoft's 3.5% projected FCF yield. Frank criticizes the upcoming SpaceX IPO and its fast-track inclusion in major indices, arguing this represents wealth transfer from public to private investors through index rule manipulation. With SpaceX targeting a $2 trillion valuation at 129x sales, Frank sees this as another example of overvalued companies exploiting passive investors. The fund maintains its strategy of finding opportunities outside popular indices, expecting this competitive advantage to strengthen as more capital flows into passive strategies.
Frank Value Fund exploits valuation blind spots created by passive index investing by focusing on catalyst-unlocking value opportunities in mid-cap companies with attractive free cash flow yields outside popular indices, while avoiding overvalued mega-cap technology stocks that benefit from index rule manipulation.
The manager expects the competitive advantage from exploiting index blind spots to become more drastic and sustainable as more capital flows into passive strategies. He believes current portfolio positioning in companies with cash flow now, rather than speculative future growth stories, will continue the fund's tradition of valuation discipline and outperformance.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 15 2026 | 2026 Q1 | AMZN, MSFT, TSLA | ETFs, free cash flow, healthcare, mid cap, technology, value | - | Frank Value Fund slightly underperformed in Q1 but maintains strong long-term outperformance through disciplined value investing. Manager Brian Frank criticizes SpaceX's upcoming $2 trillion IPO and fast-track index inclusion as exploitation of passive investors, while positioning the fund in overlooked opportunities like healthcare companies with 8% free cash flow yields versus overvalued technology giants. |
| Jan 6 2026 | 2025 Q4 | GTX, MSFT | Buybacks, cash flow, Consumer Staples, fundamentals, mid cap, value | - | Frank Value Fund outperformed benchmarks through disciplined value investing, focusing on undervalued companies with high free cash flow yields and active buyback programs. Manager warns current market valuations mirror historical bubbles and expects correction in 2026. Portfolio positioned to benefit from superior shareholder returns while avoiding overvalued growth stocks trading at unsustainable multiples. |
| Oct 9 2025 | 2025 Q3 | NXST, TGNA | Buybacks, Consumer Staples, M&A, Media, small caps, value |
TGNA US NXST US |
Frank Value Fund's catalyst-unlocking strategy delivered 15.68% YTD returns by targeting small/mid cap companies with 12% free cash flow yields. Recent M&A wins in TV stations Nexstar and Tegna demonstrate the approach's effectiveness. With reduced active management competition and defensive positioning in consumer staples, the fund is well-positioned for potential economic deterioration. |
| Jul 3 2025 | 2025 Q2 | CTLP, NRG, VST | AI, catalysts, Electricity, Independent Power Producers, mid cap, spinoffs, value |
NRG VST CTLP NRG VST CTLP |
Frank Value Fund's catalyst-unlocking strategy delivered 8.36% YTD returns, outperforming benchmarks through concentrated positions in Independent Power Producers benefiting from AI-driven electricity demand and opportunistic investments in spinoffs and takeover targets. The fund capitalizes on indexer inefficiencies and reduced analyst coverage in small/mid-cap space, recently rotating into consumer staples at attractive entry points. |
| Apr 14 2025 | 2025 Q1 | MO | Bear Market, catalysts, inflation, mid cap, Power, Recession, tariffs, value | - | Frank Value Fund leverages mid-cap nimbleness and valuation discipline to navigate tariff-induced volatility. Increased independent power producer exposure citing resilient electricity demand from AI and electrification trends. Holding 7% cash to capitalize on dislocations, targeting 20%+ return opportunities. Swapped Altria for power producer with 40% upside. Positioned for value leadership despite recession risks. |
| Jan 9 2025 | 2024 Q4 | - | Concentration, fundamentals, Indexation, mid cap, Outperformance, value | - | Frank Value Fund returned 19.45% in 2024, ranking top 1% in its category over three years through concentrated value discipline. With large caps at 22x P/E near historical highs, the fund's 24 profitable holdings at reasonable valuations create stark differentiation. Post-election outperformance demonstrates the advantage of avoiding unprofitable companies that dominate passive indices. |
| Oct 10 2024 | 2024 Q3 | AAPL, WU | Catalyst, Concentration, mid cap, Recession Resistant, shareholder returns, value | WU | Frank Value Fund employs concentrated catalyst-driven value investing in 26 undervalued, shareholder-friendly companies like Western Union. Despite YTD underperformance, the strategy has delivered top-tier three-year results. The manager emphasizes recession resistance and downside protection amid Fed rate cuts and elevated market valuations, positioning for potential economic downturn while maintaining upside exposure through near-term catalysts. |
| Jul 9 2024 | 2024 Q2 | CAH, CSCO, HRB, NVDA | Bubble, Concentration, Passive, Quality, technology, value | - | Frank Value Fund positions for value outperformance as market concentration reaches 1999 bubble levels. With 95% invested in attractively priced companies outside major indices, the fund avoids passive investor selling pressure while targeting the inevitable unwinding of AI-driven market concentration. Manager expects repeat of 2022 when value outperformed during growth stock correction. |
| Apr 18 2024 | 2024 Q1 | - | catalysts, gaming, growth, REITs, small caps, technology, value | - | Frank Value Fund employs catalyst-driven value investing in small-cap companies trading at significant discounts. Recent purchases include gaming companies likely to be acquired and a REIT selling at half its asset value. Manager expects outperformance when current market speculation ends, similar to 2022 when high-flying stocks collapsed while the fund delivered positive returns. |
| Jan 2 2024 | 2023 Q4 | NRG, OPRA, PCG | Buybacks, catalysts, Construction, dividends, infrastructure, mid cap, Pharmaceuticals, value | ENRG LN | Frank Value Fund's catalyst-driven strategy delivered strong two-year performance through special dividends and buybacks. New positions target S&P 500 index inclusion for a construction company and asset sale proceeds for a pharmaceutical company. The defensive, high-dividend portfolio is positioned for continued volatility while unprofitable tech stocks face potential correction. |
| Oct 5 2023 | 2023 Q3 | - | dividends, mid cap, Quality, Recession, small cap, value | - | Frank Value Fund exploits investor neglect of small and mid-cap value stocks, which trade at 1999-level discounts to large growth. The manager targets recession-resistant, dividend-paying companies with the Fund yielding 3.19%. Massive yield gaps versus Treasuries create passive indexing headwinds while rewarding active stock selection in quality businesses. |
| Jul 9 2023 | 2023 Q2 | AAPL, HRB, MSFT, NVDA, TSLA | AI, contrarian, Defensive, dividends, mid cap, value | HRB | Frank Value Fund outperformed by buying defensive dividend-payers at 30% discounts while markets chase AI hype. Portfolio yields 2.7% with positions resistant to cyclical declines. Manager sees parallels to 2021 tech speculation and expects value to outperform as economic weakness benefits defensive names over cyclical growth stocks. |
| Apr 10 2023 | 2023 Q1 | OPRA | Buybacks, Defensive, dividends, mid cap, technology, value | OPRA | Frank Value Fund outperformed 95% of mid-cap value peers in Q1 through concentrated investments in defensive companies with shareholder-friendly catalysts. Key holding Opera delivered 12.9% special dividend while maintaining growth and buyback authorization. Manager avoids macro timing, focusing on deep-value names already priced for recession with strong cash flows and value-realizing management teams. |
| Jan 22 2023 | 2022 Q4 | PSTL, PYPL | - | - | |
| Oct 7 2022 | 2022 Q3 | - | - | - | |
| Jul 6 2022 | 2022 Q2 | - | - | - | |
| Apr 13 2022 | 2022 Q1 | ASTL | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
ValueFrank Value Fund focuses on catalyst-unlocking value investing, seeking companies with attractive free cash flow yields outside popular indices. The fund exploits valuation blind spots created by passive index investing, finding opportunities in healthcare and other sectors with 8% FCF yields versus overvalued mega-cap technology stocks. |
Free Cash Flow Valuation Catalyst Mid-cap Healthcare |
ETFsThe letter extensively criticizes how index rule changes benefit companies like SpaceX through fast-track inclusion in major indices. Index investors provide capital for nearly zero return while companies exploit these rules for access to hundreds of billions in passive assets, creating exit liquidity for private investors at public investors' expense. |
Index Inclusion Passive Investing Rule Changes Exit Liquidity S&P 500 | |
| 2025 Q4 |
ValueManager emphasizes value investing approach, contrasting undervalued holdings with expensive S&P 500 companies. Highlights mathematical impossibility of expensive companies outperforming cheap ones long-term absent exponential cash flow growth. |
Value Undervalued Cash Flow Valuations FCF Yield |
BuybacksSeven holdings actively repurchasing more than 5% of shares annually. Manager contrasts this with Microsoft's limited repurchase capacity despite massive free cash flow, emphasizing superior shareholder returns from undervalued companies. |
Share Repurchases Shareholder Returns Capital Allocation | |
DividendsFrank Value Fund dividend yield currently about 2%, which is double the S&P 500. Manager highlights superior income generation from undervalued holdings compared to expensive index constituents. |
Dividend Yield Income Shareholder Yield | |
| 2025 Q3 |
ValueThe fund focuses on catalyst-unlocking value investing in undervalued companies with high free cash flow yields. The manager emphasizes finding companies trading at attractive valuations with 12% free cash flow yields while most other stocks have 1% or negative yields. |
Free Cash Flow Undervalued Catalyst Valuation Yield |
MediaTV station owners Nexstar Media Group and Tegna were portfolio holdings that benefited from M&A activity. The manager anticipated friendly FCC regulations lifting caps on TV station ownership, leading to consolidation opportunities. |
Television Broadcasting M&A FCC Consolidation | |
BuybacksThe fund targets companies aggressively repurchasing their own shares thanks to double-digit free cash flow yields. Both Nexstar and Tegna voraciously repurchased shares while the manager waited for M&A activity. |
Share Repurchase Capital Return Free Cash Flow Shareholder Value | |
| 2025 Q2 |
Independent Power ProducersIPPs led performance reversal after tariff tantrum, with both fund holdings ranking in top S&P 500 performers YTD. NRG Energy completed transformative acquisition adding Northeast and Texas generation assets, with seller taking $2.8B in NRG stock showing confidence in electricity demand dynamics. Companies guiding strong growth driven by AI datacenter buildouts from hyperscaler technology companies. |
Electricity Power Generation AI Data Centers Growth |
ValueFund focuses on catalyst-unlocking value strategy since January 2022 integration. Emphasizes buying companies at discounted valuations where takeover value significantly exceeds public trading price. Quantitative research process enables decisive opportunistic decisions during high volatility periods when fundamental analysts neglect small/mid cap companies. |
Catalysts Takeovers Discounted Valuations Fundamental Analysis Opportunistic | |
Small CapsStrategy benefits from wider universe encompassing stocks outside indices or ETFs, particularly in small/mid cap space with fewer fundamental analysts. Spinoffs create massive opportunities as indexers must sell regardless of value since spinoffs not yet included in indices. Fund operates as benchmark-agnostic strategy focused on fundamentally driven opportunities. |
Spinoffs Index Exclusions Benchmark Agnostic Fundamental Focus Opportunities | |
| 2025 Q1 |
Independent Power ProducersManager increased exposure to independent power producers during market turmoil, citing growing electricity demand from AI data centers, electric cars, and manufacturing reshoring. Views electrification growth as continuing regardless of economic conditions, with base earnings remaining intact even if datacenter capex pulls back. |
Electricity Power AI Data Centers Electrification |
ValueFund maintains unwavering commitment to valuation discipline as a key advantage. Manager believes cheaper mid-cap portions of the market have lost less value than expensive large caps, and expects value stocks to lead in bear markets and early bull markets as investor risk-aversion reignites valuation focus. |
Valuation Mid Cap Discipline Bear Market Risk Aversion | |
Trade PolicyTrump Administration's latest tariff plans caused significant market volatility with pair of 4% down days. Manager notes tariffs may help balance US deficit but will likely cause inflation, while positioning fund to focus on value-releasing catalysts that can insulate holdings from macroeconomic trade war shocks. |
Tariffs Trade War Inflation Deficit Policy | |
| 2024 Q4 |
ValueThe fund employs a concentrated value-disciplined strategy, owning 24 companies trading at reasonable valuations while the broader market trades at 22x forward P/E near historical highs. The manager believes high market valuations create stark opportunities for value strategies to differentiate and outperform. |
Valuation Discipline Concentration Outperformance P/E |
ETFsThe letter criticizes passive indexation, particularly highlighting how 40% of Russell 2000 companies are unprofitable, making tax breaks worthless for these holdings. The manager argues modern investors are disconnected from fundamentals and unaware of underlying index compositions. |
Indexation Russell 2000 Passive Unprofitable Fundamentals | |
| 2024 Q3 |
ValueThe fund focuses on catalyst-unlocking value investing with concentrated positions in undervalued companies. Western Union exemplifies this approach with low valuation metrics and extreme shareholder friendliness through high dividend yields and material share repurchases. |
Valuation Undervalued Catalyst Concentration |
BuybacksShare repurchases are a key component of the investment strategy, particularly for undervalued companies like Western Union where repurchases are highly material rather than rounding errors. Management uses excess cash to reward shareholders through buybacks when stock prices are depressed. |
Repurchases Share Count Capital Allocation | |
DividendsHigh dividend yields from undervalued companies provide attractive shareholder returns. Western Union's 7.9% dividend yield demonstrates how low valuations can create compelling income opportunities with adequate coverage from free cash flow. |
Yield Coverage Income Cash Flow | |
| 2024 Q2 |
ValueManager emphasizes investing in low-valuation, high-quality stocks while avoiding overvalued growth names. Portfolio consists of attractively priced securities with the usual power combination of high-quality and low-valuation, positioned to benefit when value outperforms. |
Value Quality Valuation |
AIArtificial Intelligence represents the current technology frenzy similar to cryptocurrencies and metaverse in 2021. Manager draws parallels between today's AI excitement and the 1999 internet bubble, with companies like Nvidia trading at elevated multiples. |
AI Technology Bubble | |
| 2024 Q1 |
ValueThe fund focuses on catalyst-unlocking value investing, seeking companies trading at discounts with specific value-unlocking catalysts. Recent purchases include companies trading at 50% discounts to private market valuations and assets worth 2x current stock prices. |
Catalyst Discount Unlocking Private Market Assets |
GamingThe fund purchased two small gaming companies that are both likely to be sold in the next twelve months, trading at 50% discounts to average private market takeout valuations. |
Takeout M&A Private Market Discount Small Caps | |
Commercial Real EstateThe fund invested in a REIT selling all its buildings with asset values realistically over 2x the current stock price, representing a significant discount to underlying real estate values. |
REIT Asset Value Buildings Discount Real Estate | |
| 2023 Q4 |
BuybacksNRG Energy repurchased shares worth over 15% of its market cap in 2023, contributing to material outperformance. The pharmaceutical company is expected to use proceeds from asset sales to repurchase shares, with magnified effects due to high passive ownership reducing available float. |
Share Repurchases Capital Return Float Reduction Passive Ownership |
DividendsOpera paid a 10% special dividend in January 2023, contributing to outperformance. Energy companies paid special dividends in 2022 that helped generate positive returns during market declines. The pharmaceutical company aims to continue a 5% annual dividend after its asset sale. |
Special Dividends Dividend Yield Energy Dividends Capital Return | |
Infrastructure SpendingThe construction and materials company is positioned to benefit from vast sums from the Inflation Reduction Act and onshoring mandates that have yet to be spent. The company redomiciled from Europe to the US to capture these opportunities. |
Inflation Reduction Act Onshoring Construction Government Spending | |
| 2023 Q3 |
ValueSmall and mid-cap companies are trading at the most attractive levels relative to large growth since 1999. The Russell Midcap Value Index has lost money over the past two years, creating opportunities for investors willing to rotate from large to small. |
Small Cap Mid Cap Valuation Rotation Opportunity |
DividendsThe Fund's estimated yield is 3.19%, the highest in its history. There's a massive disparity between dividend yields on stock indices (S&P 500 at 1.45%) and the 10-year Treasury at 4.73%, creating opportunities for active managers in high-dividend securities. |
Yield Income Treasury Active Management Passive | |
ResilienceThe manager focuses on recession-resistant businesses that are consistently profitable in all economic environments with strong balance sheets. This strategy becomes more important as interest rates surge higher and economic uncertainty increases. |
Recession Resistant Quality Balance Sheet Profitability Defense | |
| 2023 Q2 |
ValueManager emphasizes buying defensive companies at 30% cheaper valuations than S&P 500 while market participants shun steady for speculation. Portfolio positioned in anti-hype names with strong fundamentals trading below intrinsic value. Starting valuations are key to outperformance as demonstrated by H&R Block's 200% return during tech dominance period. |
Valuation Defensive Fundamentals Contrarian Undervalued |
DividendsNew positions average 4.3% dividend yield versus 1.6% for S&P 500, with portfolio achieving highest dividend yield in history at 2.7%. One electricity company pays over 4% annual dividend and committed to repurchasing over 13% of shares outstanding in 2023, creating 17% yield to shareholders. Dividends provide bonus payments while waiting for stocks to trade in line with fundamentals. |
Yield Income Defensive Cash Flow Distribution | |
AIManager contrasts AI hype with value opportunities, noting Nvidia pays 0.04% dividend and would require 65 years to match one year of Frank Value Fund dividends. Questions sustainability of AI valuations and profit assumptions, comparing current environment to late 2020-2021 tech speculation. Views AI boom as creating opportunities in overlooked value names. |
Speculation Hype Valuation Bubble Nvidia | |
| 2023 Q1 |
DividendsOpera Ltd. approved a special dividend of $0.80 per ADR share on January 12, 2023, equating to a one-day return of 12.9%. This dividend continued the shareholder-friendly ways of Opera management and was an integral part of the investment case. |
Special Dividend Shareholder Returns Cash Distribution |
BuybacksOpera has authorization to repurchase over 50% of the float (shares held by everyone but insiders). The excess cash required for special dividends and share repurchases comes from rapid growth in the company's web-browsing business. |
Share Repurchase Capital Allocation Float Reduction | |
ValueThe Frank Value Fund only invests when target companies reflect a large discount between trading price and intrinsic value. The numerous defensive names owned are already priced for recession while high-flying technology names are priced as if everything is fine. |
Deep Value Intrinsic Value Margin of Safety |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 9, 2025 | Fund Letters | Brian Frank | TGNA US | Tegna Inc. | Communication Services | Broadcasting | Bull | NYSE | broadcasting, cash flow, consolidation, dividends, M&A, media, valuation | Login |
| Oct 9, 2025 | Fund Letters | Brian Frank | NXST US | Nexstar Media Group, Inc. | Communication Services | Broadcasting | Bull | NASDAQ | broadcasting, cash flow, consolidation, growth, M&A, Margins, media | Login |
| Jul 3, 2025 | Fund Letters | Frank Value Fund | VST | Vistra Corp | Utilities | Independent Power and Renewable Electricity Producers | Bull | NYSE | AI Datacenter, electricity generation, Independent Power Producer, S&P 500, share repurchase, Tariff Tantrum, undervalued, utilities | Login |
| Jul 3, 2025 | Fund Letters | Frank Value Fund | CTLP | Cantaloupe Inc | Information Technology | Application Software | Bull | NASDAQ | All-cash Transaction, Catalyst, mid-cap, Payments, small-cap, Software, take-private, Takeover Premium, Unattended Retail | Login |
| Jul 3, 2025 | Fund Letters | Brian Frank | NRG | NRG Energy Inc. | Utilities | Utilities - Independent Power Producers | Bull | NYSE | acquisition, buybacks, datacenters, Electricity, Power | Login |
| Jul 3, 2025 | Fund Letters | Frank Value Fund | NRG | NRG Energy | Utilities | Independent Power and Renewable Electricity Producers | Bull | NYSE | acquisition, AI Datacenter, electricity generation, growth, hyperscaler, Independent Power Producer, Northeast US, share repurchase, Texas, utilities | Login |
| Jul 3, 2025 | Fund Letters | Brian Frank | VST | Vistra Corp. | Utilities | Utilities - Independent Power Producers | Bull | NYSE | buybacks, Capacity, datacenters, Power, Storage | Login |
| Jul 3, 2025 | Fund Letters | Brian Frank | CTLP | Cantaloupe Inc. | Information Technology | Software - Infrastructure | Bull | NASDAQ | acquisition, Payments, Privatization, Recurringrevenue, Vending | Login |
| Oct 9, 2024 | Fund Letters | Frank Value Fund | WU | Western Union Company | Information Technology | Data Processing & Outsourced Services | Bull | NYSE | Catalyst-Driven, financial services, high dividend yield, money transfer, Share Buybacks, shareholder returns, undervalued, Value | Login |
| Jan 2, 2024 | Fund Letters | Frank Value Fund | ENRG LN | NRG Energy | Utilities | Independent Power and Renewable Electricity Producers | Bull | NYSE | capital return, cash flow, dividends, energy, share repurchases, utilities, Value Catalyst | Login |
| Jul 5, 2023 | Fund Letters | Frank Value Fund | HRB | H&R Block | Consumer Discretionary | Specialized Consumer Services | Bull | NYSE | Consumer services, defensive, dividend, low valuation, share repurchase, tax preparation, Value | Login |
| Apr 3, 2023 | Fund Letters | Frank Value Fund | OPRA | Opera Ltd. | Communication Services | Internet Services & Infrastructure | Bull | NASDAQ | Artificial Intelligence, cash generation, growth, share repurchase, shareholder returns, Software, Special dividend, technology, Value, Web Browser | Login |
| TICKER | COMMENTARY |
|---|---|
| MSFT | In our previous letter to shareholders we highlighted the high valuation in Microsoft. The stock subsequently declined over 20% YTD in 2026 while analyst estimates for Free Cash Flow (FCF) have also plummeted. Investors seem focused on P/E with Microsoft, but this metric ignores the exploding capital expenditures at all the hyper-scaler companies. Technology giants used to enjoy higher returns on capital, meaning they required small amounts of investment to generate the next dollar of revenue. Now, with expensive data centers and rising electricity costs, future growth comes at a high cost. FCF is a better indicator of earnings quality, as it considers capital expenditures. Since last quarter's writing, analyst estimates of FY 2028 Microsoft FCF have declined by more than 50% from $217 billion to $97 billion. That implies 3.5% FCF/Enterprise Value (EV) yield two years from today on a current market cap of $2.8 trillion. |
| AMZN | For comparison, markets currently value Amazon at $2.25 trillion yet the company has 46x more revenue and nearly 10x more profit than SpaceX. |
| TSLA | Just like Tesla's addition to the S&P 500 in December 2020, SpaceX will get access to an enviable war chest of cash. Both companies enjoy strong balance sheets with the luxury of investing in research and development without the need to raise additional capital. Index investors provide these companies with capital for nearly zero in return. In 2021, Tesla's earnings per share were $2.26, and analysts expect 2026 to be $2.07. The stock is essentially flat since 2021 while Frank Value Fund has returned over 11% per year in the past five years. |
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| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
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