| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
O'Keefe Stevens Advisory capitalized on Q2 2026's strong equity rally by trimming AI infrastructure positions including NVIDIA, Qualcomm, and Corning that were established nearly a decade before the AI boom, as stock prices moved ahead of underlying thesis despite business improvement. The manager initiated a new position in Sotera Health, a sterilization duopoly with 50% EBITDA margins trading at depressed valuations due to litigation overhang and forced selling from Warburg Pincus, which exited its stake in early 2026. With industry-wide sterilization capacity tight and EPA regulatory dynamics favoring consolidated operators, the manager sees 50% near-term upside and plans multi-year ownership. Cash remains one of the largest holdings for the third consecutive quarter, held not from bearish prediction but because businesses trading at prices justifying deployment remain scarce though increasing. The manager hedged concentrated gains using options on larger appreciated positions and watches the software sector for opportunities, as investors use software shorts to fund perceived AI winners, creating potential for violent rotation if that dynamic reverses. Portfolio positioned for unpredictable geopolitical and market events through durable business ownership, selective cash deployment, and downside hedging.
O'Keefe Stevens Advisory harvested gains from early AI infrastructure positioning while maintaining significant cash reserves and initiating selective new positions in high-quality businesses trading at dislocated valuations due to temporary headwinds.
Manager enters Q3 with cash as one of largest holdings for third consecutive quarter, holding cash because number of businesses trading at prices justifying deployment remains small though increasing. Expects wide fluctuations in AI-related stocks to continue given unknowns around capital spending, winning models, and potential job displacement. Watching software sector for opportunities as investors use software shorts to fund AI winners, creating potential for violent rotation if dynamic flips. Prepared for unpredictable events by owning durable businesses at reasonable prices, holding cash when prices are not reasonable, and hedging concentrated gains.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 23 2026 | 2026 Q2 | CALY, GLW, HCC, NVDA, QCOM, SHC, SPHR | AI, Data centers, geopolitics, healthcare, semiconductors, SMID Cap, value | SHC | O'Keefe Stevens harvested AI infrastructure gains established pre-boom, trimming NVIDIA, Qualcomm, and Corning as valuations exceeded thesis. Initiated Sotera Health, a sterilization duopoly with 50% margins trading at litigation-depressed valuations with 50% upside. Cash remains largest holding for third quarter as deployment opportunities stay scarce. Hedged concentrated positions with options while watching software sector for violent rotation opportunity if AI funding dynamic reverses. |
| Apr 24 2026 | 2026 Q1 | BABA, BAX, ELY, GLW, HCC, NVDA, PRGO, SPHR, TPH, WY | AI, Cash, Defensive, Entertainment, healthcare, Lumber, software, Valuations | - | Defensive cash-heavy positioning proved prescient as markets declined 4.3% while software sector collapsed 22.5%. Portfolio benefited from AI infrastructure exposure via Corning's $6 billion Meta deal and Sphere's expansion plans. Added to distressed Perrigo and new position Baxter. Manager views 2026 as AI implementation year while maintaining discipline on valuations and deployment timing. |
| Apr 25 2025 | 2025 Q1 | BGC, BKRIF, BMWKY, CMP, DFIN, FPH, MBGYY, NVDA, QCOM, ROKU | Autos, Buybacks, earnings, risk management, value, volatility |
DFIN FPH BMWKY MBGYY CMP |
Extreme market volatility created both challenges and opportunities in Q1 2025, with earnings reactions far exceeding historical norms. The manager navigated this environment through disciplined position sizing and selective capital deployment, adding quality names like BMW, Mercedes-Benz, and Compass Minerals at attractive valuations while maintaining conviction in existing holdings despite temporary setbacks. |
| Jan 27 2025 | 2024 Q4 | AER, BGC, BKRIF, BYON, DFIN, EAF, FNMA, FNMAS, FPH, GLW, ICLTF, NVDA, QCOM, WBD | AI, Capital markets, E-Commerce, real estate, small caps, technology, value |
BYON DFIN |
Small-cap value manager delivered mixed 2024 results with Nvidia driving performance while several positions underperformed. Strategy focuses on patient capital deployment in underfollowed names facing temporary selling pressure unrelated to fundamentals. 2025 picks Beyond Inc and Donnelley Financial positioned to benefit from improved M&A environment and small-cap rotation under new administration. |
| Oct 10 2024 | 2024 Q3 | ABBV, ABNB, AMAT, AVGO, BMY, CSCO, CVS, ETSY, FDX, FI, HD, HUM, LMT, MCK, PH, QCOM, TMUS, TOL, UNH, WSM | large cap, Quality, risk management, small caps, valuation, value | - | Distillate warns of extreme valuation risk with 40% of S&P 500 trading above 30x P/E, similar to 2000 bubble conditions. The 15 most expensive megacap stocks represent 40% of market cap at 72% premium to rest of market. Strategy focuses on quality companies in less expensive market segments, avoiding megacap concentration entirely while maintaining zero exposure to the biggest names. |
| Jul 19 2024 | 2024 Q2 | AMZN, BABA, GLW, GOOGL, META, MSFT, NVDA, PRGO, QCOM, SWX | AI, China, healthcare, SMID Cap, technology, value |
QCOM GLW BABA PRGO |
SMID cap focused manager initiated positions in deeply discounted Alibaba and Perrigo while maintaining AI beneficiaries Qualcomm and Corning. Portfolio reflects conviction in AI-driven growth and turnaround stories despite acknowledging ROI uncertainty and geopolitical risks. Expects recovery in specific holdings through operational improvements and capacity utilization while maintaining selective approach. |
| May 10 2024 | 2024 Q1 | AER, AMGN, BGC, BKRIF, BLKB, EAF, EXPI, FPH, HCC, NVDA, QCOM, ROKU, WBD | activism, Aviation, materials, small cap, technology, trading, value |
EAF AER BGC |
Concentrated small-cap value fund with NVDA as largest holding at 15%. New position in Aercap offers 40% upside potential. BGC Group thesis executing well with strong trading revenues. Supporting activist at troubled Graftech position. Expects higher rates to create distressed opportunities while benefiting low-leverage portfolio companies. |
| Jan 24 2024 | 2023 Q4 | AER, AMGN, BGC, DFIN, EAF, FPH, HCC, ICLTF, LAZ, LIVE, LL, NVDA, QCOM, TSLA | AI, commodities, Concentration, Predictions, small caps, technology, value |
FPH AER EAF |
Value-focused fund delivered strong 2023 performance led by Nvidia's AI-driven surge. Manager predicts small cap outperformance in 2024 based on cheaper valuations and rate cuts. Top picks Five Point Holdings and Aercap benefit from resolved overhangs. Commodity positions struggled but provide learning opportunities about timing and shareholder dynamics. |
| Oct 26 2023 | 2023 Q3 | AAPL, AMGN, AMZN, DFIN, GOOGL, HCC, HT, META, MSFT, NVDA, QCOM, TSLA | AI, Portfolio Management, rates, real estate, semiconductors, small caps, technology, value |
AAPL|MSFT|NFLX|NVDA|UNH 5HT.SI |
Manager dramatically reduced NVDA position despite excellent fundamentals, citing extreme valuation and inevitable competitive threats in technology. Market concentration in magnificent seven masks carnage in small caps, creating opportunities for patient value investors. Consumer spending weakening with elevated inventories suggesting margin compression ahead. Increased cash position provides flexibility to deploy capital selectively. |
| Jul 14 2023 | 2023 Q2 | BOWL, SPHR | - | - | |
| Mar 31 2023 | 2023 Q1 | BIRG LN, HCC, NVDA | - | - | |
| Oct 26 2022 | 2022 Q3 | LAZ, SRG | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIManager positioned early in AI infrastructure and harvested gains as the market repriced positions higher. Trimmed NVIDIA, Qualcomm, and Corning despite business improvement because stock prices moved ahead of underlying thesis. Expects wide fluctuations in AI-related stocks to continue given unknowns around capital spending, winning models, and potential white-collar job displacement. |
Infrastructure Semiconductors Data Centers Volatility |
SoftwareSoftware sector collapsed with iShares Software ETF declining ~27% through April before rallying. Manager sees opportunity but did not pursue in Q2. Software platforms vulnerable to vibe-coding or in-house development face most pressure. Market discounting long-term uncertainty with higher discount rates. Manager watching for potential violent rotation back into software if AI winners become sellers. |
Disruption Volatility Valuation Opportunity | |
SterilizationInitiated position in Sotera Health, a sterilization duopoly with 50% EBITDA margins and mission-critical regulated services. Business benefits from high switching costs, low-cost percentage of device manufacturing, and regulatory dynamics favoring consolidated operators. EPA rule changes and competitor exits should drive volume capture at improved pricing. Manager sees 50% near-term upside and plans to own for many years post-litigation. |
Healthcare Duopoly Regulation Litigation | |
Data CentersCorning signed multiyear, multibillion-dollar agreements with Nvidia, Amazon, and Meta for optical fiber and connectivity. Nvidia invested $500 million with potential total equity investment of $3.2 billion. Legacy data centers converting to fiber-connected racks while new data centers demand fiber, creating potential bottleneck. Corning appreciated over 20% in Q2. |
Fiber Optics Infrastructure Cloud Capacity | |
GeopoliticsWar with Iran closed and reopened Strait of Hormuz, damaged Gulf refining capacity, and combined with strikes to take millions of barrels per day offline. Gasoline back above $4/gallon with refining margins at record levels. Manager notes these events are not predictable and prepares by owning durable businesses at reasonable prices, holding cash, and hedging concentrated gains. |
Iran Oil Refiners Volatility | |
SemiconductorsQualcomm faced structural challenge from Apple developing its own modem but diversification strategy playing out. Doubled fiscal 2029 non-handset revenue goal to $40 billion, lifted automotive target to $10 billion, and struck deal with Meta for data center CPUs. Manager trimmed due to position becoming oversized and less attractive risk/reward. |
Diversification Automotive Cloud Valuation | |
EntertainmentSphere Entertainment continued strong performance as market realizes strong unit economics despite weaker Las Vegas Strip attendance. Sphere Abu Dhabi remains on track. New immersive experience announced should add incremental high-margin shows and increase utilization. Manager inclined to let N=1 asset become large position given great assets and management teams often have longer right tails. |
Las Vegas Immersive Utilization Unit Economics | |
Metallurgical CoalWarrior Met Coal experienced significant volatility during the quarter. Gas explosion at Shanxi province coal mine killed 82 workers, China's deadliest since 2009, driving met coal prices higher. Blue Creek mine remains next catalyst with increasing production and sales volume expected to drive revenue and EPS growth even in weaker met coal pricing environment. |
China Supply Disruption Production Growth Volatility | |
| 2026 Q1 |
AIManager views 2026 as the year of AI implementation after 2025 was about understanding AI capabilities. Discusses how AI is disrupting software companies through cost reduction and potential job displacement. Notes that AI could help companies reduce workforce costs while avoiding negative headlines from traditional layoffs. |
Implementation Software Disruption Workforce Cost |
SoftwareSoftware sector experienced significant selloff with S&P Software Index declining 22.5% in Q1 as valuations reset from peak levels of 10x-15x forward revenue. Manager notes concerns about growth durability, margin sustainability, and AI-related demand questions. Expects volatility but sees potential opportunities when correlations converge. |
Valuations Reset Growth Margins Volatility | |
Data CentersCorning secured multi-year agreement with Meta worth up to $6 billion for optical fiber and connectivity for US AI data centers. This represents a significant catalyst for fiber demand driven by AI infrastructure buildout. Manager views this as a real multi-year setup around AI-driven fiber demand. |
Fiber Infrastructure Connectivity Growth Demand | |
LumberManager believes softwood lumber is nearing the end of a three-plus-year downturn. Canadian supply continues coming offline with mill closures, combined duties of 45.16% on Canadian producers, and lean inventories across the channel. Lumber prices moved higher through the quarter with positive housing starts data. |
Cycle Supply Duties Inventories Recovery | |
EntertainmentSphere Entertainment continues delivering strong operating results with Wizard of Oz crossing 2 million tickets and $260+ million in revenue. Company announced plans for smaller-scale Sphere venues starting with Washington DC location, shifting toward a content-and-royalty model that could be more valuable than single venue approach. |
Innovation Expansion Royalties Content Technology | |
| 2025 Q1 |
VolatilityThe manager extensively discusses heightened market volatility, noting that earnings reactions have significantly exceeded historical norms. Stocks beating expectations outperformed by 248bps vs historical 148bps, while misses underperformed by 362bps vs historical 245bps. The implied versus realized volatility relationship has reversed since Q1 2021, with realized volatility occasionally surpassing implied volatility. |
Earnings Risk Appetite Market Data |
BuybacksThe letter emphasizes the importance of strategic share repurchases during market dislocations. Management teams with strong balance sheets should capitalize on overreactions by opportunistically repurchasing shares during temporary dislocations. The manager criticizes companies that exhausted capital on buybacks at peak valuations and praises companies like Roku that maintain optionality for strategic repurchases. |
Capital Markets Management Valuation | |
AutosThe fund initiated new positions in BMW and Mercedes-Benz, viewing them as attractive opportunities despite headwinds from heightened competition and softer demand. Both companies trade at highly attractive valuations with low leverage, offering robust dividend yields and ongoing share repurchase programs at discounted prices. |
Value Dividends Competition | |
| 2024 Q4 |
AINvidia continues to face strong product demand that significantly outpaces supply, with competitive advantages widening through advanced GPU and data center infrastructure launches. The Blackwell GPU architecture introduced B100 and B200 data center accelerators with substantial performance gains for AI workloads, featuring enhanced tensor cores and memory bandwidth for faster AI model training and inference. |
GPUs Data Centers Blackwell Tensor Training |
E-commerceBeyond Inc operates as an asset-light e-commerce company managing retail brands including Overstock, Bed Bath & Beyond, and Zulily. The company's capital-light approach minimizes fixed costs and facilitates high free cash flow conversion, positioning the business for profitable growth as revenue scales with incremental return on invested capital near 100%. |
Asset-light Retail Brands FCF ROIC | |
Capital MarketsDonnelley Financial Solutions provides compliance, regulatory, and transaction-related solutions to corporations and investment companies. The company benefits from recurring software revenue growth and event-driven business recovery tied to M&A and IPO activity, with first-mover advantage in regulatory solutions like Tailored Shareholder Reports platform. |
Compliance Regulatory M&A IPO Software | |
Small CapsSmall caps continue to lag substantially behind large caps, with companies driving large-cap performance being the familiar Magnificent 7 names. However, from July 10th through year-end 2024, the S&P SmallCap 600 index delivered 9.6% total return compared to the S&P 500's 5.1% return, creating a promising setup as small caps are underfollowed and cheap. |
Russell 2000 Underfollowed Valuation Outperformance Setup | |
| 2024 Q3 |
ValuationThe market shows extreme valuation risk with the S&P 500 trading at expensive levels historically. Over 40% of the S&P 500 trades at NTM P/E over 30x, similar to 2000 bubble conditions. The most expensive 15 megacap stocks trade at a 72% premium to the rest of the market and account for almost 40% of total market cap. |
Value Quality Risk Appetite |
QualityFocus on quality companies with stable cash flows and low leverage as protection against valuation risk. The strategy emphasizes fundamental stability and avoids highly leveraged or unprofitable stocks, particularly in small cap space where many stocks have high debt loads. |
Quality Value Small Caps | |
Small CapsSmall cap indexes include many unprofitable and highly leveraged stocks, creating dispersion opportunities. The strategy's small/mid cap portfolio has much lower leverage and higher free cash flow yields than benchmarks while avoiding quality concerns in the broader small cap market. |
Small Caps Quality Value | |
| 2024 Q2 |
AIAI rally broadened beyond obvious players with Qualcomm gaining recognition for mobile AI capabilities and Corning benefiting from optical connectivity for Generative AI. While AI use cases appear endless, ROI on spending remains unclear, creating uncertainty about the duration of the ongoing capex boom. |
Mobile AI Generative AI Capex ROI Machine Learning |
E-commerceAlibaba represents the largest e-commerce player in China with 40% GMV market share through Taobao and T-mall. The company faces market share decline from 78% in 2015 to 40% in 2023 due to competition from Pinduoduo, JD.com, and others, requiring reinvestment to stabilize positioning. |
China E-commerce Market Share Competition Reinvestment | |
ChinaInvestment in Alibaba reflects exposure to Chinese market despite multiple risks including geopolitical tensions, VIE structure concerns, and economic slowdown from housing market downturn. The company trades at attractive valuation of 6-7x earnings after accounting for net cash position. |
Geopolitical Risk VIE Structure Valuation Housing Market | |
| 2024 Q1 |
SemiconductorsNVDA represents almost 15% of the portfolio as the top holding. The manager sold NVDA call options that expire in June and are deep in the money, planning to deploy cash from covered calls over time as opportunities arise. |
AI Technology Growth |
Aircraft LeasingInitiated new position in Aercap (AER) in Q1, adding to the position several times. Despite the stock being up 20% in Q1, the manager believes it has 40% near-term upside as the market continues to underappreciate the duration of the leasing hard market. |
Aviation Leasing Cyclical | |
Capital MarketsBGC Group thesis playing out with Fenics revenues increasing 20% year-over-year, led by Rates and Credit trading rising 25% and 42.6% respectively. FMX Futures Exchange received CFTC approval to compete with CME. BGC was included in S&P 600 Small Cap index, leading to purchase of 46 million shares. |
Trading Exchanges Rates | |
GraphiteGraftech (EAF) declined 39% in January due to indiscriminate selling by Brookfield Asset Management. Activist investor Nilesh Undavia filed 13D with 5.7% stake. Manager recommends voting for Undavia and remains optimistic that business cycle bottomed early in 2024 with electrode prices recovering. |
Steel Materials Activist | |
| 2023 Q4 |
AIAI became mainstream in 2023 with Nvidia appreciating over 200% as the fund's largest position. The manager notes AI's significant impact on technology sector performance despite cautious analyst commentaries. |
Nvidia Technology Semiconductors Growth Performance |
Small CapsManager predicts Russell 2000 will be the top performing index in 2024. Small caps have underperformed the S&P 500 in 8 of the last 12 years, but cheaper starting valuations and expected rate cuts should drive outperformance. |
Russell 2000 Valuation Rates Outperformance Opportunity | |
CommoditiesPortfolio includes significant commodity exposure through Warrior Met Coal, Graftech, and Greenfirst Forest Products. Manager acknowledges commodity investing is more challenging than durable compounding businesses due to wider outcome ranges and competitor dependency. |
Coal Steel Lumber Cyclical Volatility | |
ValueManager focuses on finding bargains across market caps, maintaining positions trading below replacement cost. Emphasizes acting differently than the market and finding undervalued opportunities with significant overhangs resolved. |
Undervalued Replacement Cost Contrarian Bargains Mispriced | |
| 2023 Q3 |
AIManager discusses AI as being in early stages despite decades of existence. Notes current valuation of NVDA implies maintaining dominant market position for foreseeable future. Acknowledges AI growth potential while expressing concern about excessive optimism in valuations. |
Artificial Intelligence GPU Technology Growth Valuation |
SemiconductorsExtensive discussion of NVDA's dominant GPU market position with competition years behind. Notes gross margins expected to exceed 70% in 2024. Discusses technology companies aging in dog years and competitive threats from companies like AMD, Qualcomm entering CPU/GPU markets. |
GPU Technology Competition Market Share Margins | |
ValueManager actively reduced NVDA position due to extreme valuation despite excellent business fundamentals. Seeks bargains in out-of-favor small and micro-cap areas where uncertainty and pessimism are high. Notes pain creates opportunity in underperforming segments. |
Valuation Bargains Small Cap Opportunity Contrarian | |
Small CapsManager notes small and micro-cap space getting decimated with Russell Microcap down 8% and Russell 2000 down 5% in Q3. Individual small-cap stocks routinely down 10%+ from earnings misses. Views this as opportunity despite economic sensitivity and rate pressures. |
Russell 2000 Microcap Opportunity Underperformance Economic Sensitivity |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 23, 2026 | Fund Letters | O'Keefe Stevens Advisory, Inc | SHC | Sotera Health | Diagnostics & Research | Health Care Services | Bull | NASDAQ | debt reduction, duopoly, Equity, Free Cash Flow, high margins, Litigation Overhang, Medical Device, Regulatory Moat, Sterilization Services, turnaround, Value | Login |
| Apr 25, 2025 | Fund Letters | O'Keefe Stevens Advisory, Inc | DFIN | Donnelley Financial Solutions | Commercial & Professional Services | Commercial Printing | Bull | NYSE | Capital markets, Digital transformation, Earnings miss, financial services, mispricing, recurring revenue, software solutions | Login |
| Apr 25, 2025 | Fund Letters | O'Keefe Stevens Advisory, Inc | FPH | Five Point Holdings | Real Estate | Real Estate Development | Bull | NYSE | California, Free Cash Flow, Master-Planned Communities, net cash, real estate development, turnaround, Value | Login |
| Apr 25, 2025 | Fund Letters | O'Keefe Stevens Advisory, Inc | BMWKY | BMW Group | Consumer Discretionary | Automobile Manufacturers | Bull | OTC | attractive valuation, Cyclical, dividend yield, German, low leverage, luxury automobiles, share repurchases | Login |
| Apr 25, 2025 | Fund Letters | O'Keefe Stevens Advisory, Inc | MBGYY | Mercedes-Benz Group | Consumer Discretionary | Automobile Manufacturers | Bull | OTC | attractive valuation, Cyclical, dividend yield, German, low leverage, luxury automobiles, share repurchases | Login |
| Apr 25, 2025 | Fund Letters | O'Keefe Stevens Advisory, Inc | CMP | Compass Minerals International | Materials | Fertilizers & Agricultural Chemicals | Bull | NYSE | Essential Materials, infrastructure, new management, Normalized Earnings, Road Deicing, Salt, Value, Weather Dependent | Login |
| Jul 19, 2024 | Fund Letters | O'Keefe Stevens Advisory, Inc | QCOM | Qualcomm Inc | Information Technology | Semiconductors & Semiconductor Equipment | Bull | NASDAQ | AI, growth, Mobile Technology, On-device AI, semiconductors, Smartphones, technology | Login |
| Jul 19, 2024 | Fund Letters | O'Keefe Stevens Advisory, Inc | GLW | Corning Incorporated | Information Technology | Electronic Equipment, Instruments & Components | Bull | NYSE | AI infrastructure, Capacity utilization, margin expansion, operating leverage, Optical Connectivity, technology, turnaround | Login |
| Jul 19, 2024 | Fund Letters | O'Keefe Stevens Advisory, Inc | BABA | Alibaba Group Holding Limited | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | NYSE | AI, China, Cloud computing, e-commerce, Free Cash Flow, geopolitical risk, market share, Value | Login |
| Jul 19, 2024 | Fund Letters | O'Keefe Stevens Advisory, Inc | PRGO | Perrigo Company plc | Health Care | Pharmaceuticals | Bull | NYSE | Birth Control, Consumer-health, cost savings, debt reduction, healthcare, Infant Formula, OTC Pharmaceuticals, turnaround | Login |
| Apr 25, 2024 | Fund Letters | O'Keefe Stevens Advisory, Inc | EAF | Graftech International Ltd. | Materials | Steel | Bull | NYSE | activist investor, Cyclical, Electric Arc Furnace, Graphite Electrodes, materials, Proxy Fight, Steel, turnaround, Value | Login |
| Apr 25, 2024 | Fund Letters | O'Keefe Stevens Advisory, Inc | AER | AerCap Holdings N.V. | Industrials | Trading Companies & Distributors | Bull | NYSE | Aircraft Leasing, Aviation, Cyclical, Hard Market, Industrials, Leasing, Transportation | Login |
| Apr 25, 2024 | Fund Letters | O'Keefe Stevens Advisory, Inc | BGC | BGC Group Inc. | Financials | Capital Markets | Bull | NASDAQ | Capital markets, Electronic Trading, Exchange Launch, Financial Brokerage, Fintech, index inclusion, Interest Rate Normalization | Login |
| Jan 27, 2024 | Fund Letters | O'Keefe Stevens Advisory, Inc | BYON | Beyond Inc | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | NASDAQ | asset-light, distressed valuation, e-commerce, Free Cash Flow, furniture, Home goods, Private equity investments, Retail brands, Strategic Partnerships, turnaround | Login |
| Jan 27, 2024 | Fund Letters | O'Keefe Stevens Advisory, Inc | DFIN | Donnelley Financial Solutions | Industrials | Commercial Services & Supplies | Bull | NYSE | B2B software, Compliance software, financial technology, IPO support, M&A services, market leader, recurring revenue, Regulatory solutions, SaaS transformation, SEC filings | Login |
| Jan 24, 2024 | Fund Letters | O'Keefe Stevens Advisory, Inc | FPH | Five Point Holdings | Real Estate | Real Estate Development | Bull | NYSE | cash generation, debt restructuring, Maturity Extension, new management, real estate development, turnaround | Login |
| Jan 24, 2024 | Fund Letters | O'Keefe Stevens Advisory, Inc | AER | Aercap Holdings | Financials | Specialized Finance | Bull | NYSE | Aircraft Leasing, book value discount, Hard Market, Insurance Recovery, share repurchase, supply constraints | Login |
| Jan 24, 2024 | Fund Letters | O'Keefe Stevens Advisory, Inc | EAF | Graftech International | Materials | Steel | Bear | NYSE | Commodity Cyclical, Electric Arc Furnace, European Exposure, Graphite Electrodes, Needle Coke, Steel, Value trap | Login |
| Jan 24, 2024 | Fund Letters | O'Keefe Stevens Advisory, Inc | - | Greenfirst Forest Products | Materials | Forest Products | Bull | TSX | Asset Optimization, Canada, Duty Recovery, Forest Products, Lumber, Management alignment, Paper Mills, Takeout Target | Login |
| Oct 26, 2023 | Fund Letters | O'Keefe Stevens Advisory, Inc | AAPL|MSFT|NFLX|NVDA|UNH | Nvidia Corporation | Information Technology | Semiconductors & Semiconductor Equipment | Neutral | NASDAQ | Artificial Intelligence, Gpu, Management Quality, market leader, Position Reduction, semiconductors, technology, valuation concerns | Login |
| Oct 26, 2023 | Fund Letters | O'Keefe Stevens Advisory, Inc | 5HT.SI | Hersha Hospitality Trust | Real Estate | Hotel & Resort REITs | Neutral | NYSE | acquisition, asset sales, balance sheet, debt refinancing, hospitality, Hotel, Interest rates, REIT | Login |
| TICKER | COMMENTARY |
|---|---|
| NVDA | Our positions in NVIDIA, Qualcomm, and Corning were put on almost a decade prior to the AI boom. Q2 gave us the opportunity to take some gains. At the end of the quarter, our top 5 positions were Cash, NVDA, SPHR, GLW, and CALY. On our larger appreciated positions, including Qualcomm and Corning, we used options to hedge downside risk in addition to trimming. |
| QCOM | Our positions in NVIDIA, Qualcomm, and Corning were put on almost a decade prior to the AI boom. Q2 gave us the opportunity to take some gains. In some cases, we trimmed despite business materially improving, because the stock price had moved ahead of the underlying thesis. Qualcomm faced a long-standing structural challenge: customer concentration in Apple, which is internally developing its own modem and transitioning away from Qualcomm silicon. Qualcomm hosted an investor day in June, with all eyes focused on their AI and datacenter strategy. Qualcomm has long been seen as a loser in AI stemming from higher memory prices driving down phone demand, and in turn QCOM's handset business. Qualcomm's diversification strategy continues to play out. At the investor day, Qualcomm doubled its fiscal 2029 non-handset revenue goal to $40 billion, lifted its automotive revenue target to $10 billion, and struck a deal with Meta to supply data center CPUs for AI infrastructure, with production of its Dragonfly C1000 slated for 2028. We trimmed due to the position becoming oversized in the portfolio, and risk/reward was no longer as attractive. On our larger appreciated positions, including Qualcomm and Corning, we used options to hedge downside risk in addition to trimming. |
| GLW | Our positions in NVIDIA, Qualcomm, and Corning were put on almost a decade prior to the AI boom. Q2 gave us the opportunity to take some gains. In some cases, we trimmed despite business materially improving, because the stock price had moved ahead of the underlying thesis. Corning appreciated over 20% in Q2. Corning spent the second quarter signing up the biggest names in AI as customers and partners. In May, Nvidia and Corning announced a multiyear commercial and technology partnership under which Corning will increase its U.S. optical connectivity manufacturing capacity tenfold and expand U.S. fiber production by more than 50%, including three new plants in North Carolina and Texas. Nvidia paid $500 million for rights to Corning shares, including warrants on up to 15 million shares at a $180 exercise price; if exercised in full, Nvidia's total equity investment could reach $3.2 billion. In June, Amazon signed a multiyear, multibillion-dollar agreement for Corning to supply the optical fiber, cable, and connectivity for its expanding U.S. data centers. These follow the up to $6 billion supply agreement Meta signed in January. Historically, data centers used copper cables to connect their technology, some of which is switching to fiber. Corning's fiber may be a future bottleneck. As legacy data centers convert to newer, fiber-connected racks, Corning contends with new data centers demanding fiber and replacement racks demanding fiber. At the end of the quarter, our top 5 positions were Cash, NVDA, SPHR, GLW, and CALY. On our larger appreciated positions, including Qualcomm and Corning, we used options to hedge downside risk in addition to trimming. |
| SHC | We have been following Sotera Health for several years. The business is exceptional: a sterilization duopoly with Sterigenics and Steris combined controlling an estimated 70% of the sterilization market. Sotera's Sterigenics business boasts 50% EBITDA margins, mission-critical regulated services, and cobalt-60 production that is nearly impossible to replicate. Yet we never bought it because of one thing: Warburg Pincus held a material stake and was consistently selling into the market. We do not buy high-quality businesses where forced sellers will pressure the stock regardless of fundamental improvement. We look for situations where forced sellers create dislocation, allowing us to buy a stock for cheaper than what it would trade for without such selling pressure. On the flip side, we look to sell into forced buyers pushing stock prices up irrespective of fundamentals. In early 2026, Warburg sold its last share. Combined with a valuation that was cheap given the quality of the business model, we thought it made sense to purchase the stock. At their November 2024 Investor Day, management outlined a 2025-2027 plan targeting 5%-7% organic revenue growth and 5%-8% adjusted EBITDA growth, with at least 50bps of EBITDA margin expansion annually. Sterigenics represents over 60% of revenue, and we expect it to grow at mid to high single digits organically. The company targets cumulative free cash flow of $500m-$600m over the three-year period, which we expect will be much higher post-2027 when capex runs at a more normalized level. Sotera recently completed capacity expansions and greenfield buildouts, which elevated capex. As those projects mature, capacity is absorbed, and CapEx will normalize and decline, driving higher cash conversion. Cash flow will go toward debt reduction, with net leverage currently at 3.2x. Outstanding ethylene oxide litigation, concentrated in California and Georgia, is expected to be resolved by the end of 2027. When litigation risk abates and the balance sheet improves, the market will price the business on its fundamental quality: a duopoly sterilization franchise with 50% EBITDA margins, 20 consecutive years of revenue growth, and management executing a credible margin improvement plan. Today, the stock is depressed by litigation headlines and a balance sheet that is more levered than we would like, in conjunction with the potential legal payout. In May 2026, Alton Shader took over as CEO. Shader comes from Viant Medical, where he served as CEO since 2019, and holds a Stanford MBA. Prior CEO Petras, who scaled the company from $600m in 2016 revenue to $1.6B in 2025, remains as executive chairman focused on investor relations, commercial operations, and litigation strategy. We believe this is a step in the right direction. Petras had to balance operational management with significant litigation oversight. Shader can dedicate substantially all of his time to operating the business efficiently. Our experience is that when management has ongoing time spent outside the core business, even a high-quality business is not immune to bloat and less-than-perfect operational practices. When these distractions end, operational improvements typically follow. Sotera's 20 years of consecutive revenue growth and 50% EBITDA margins suggest a very high-quality business. Steris has not gone through similar litigation, and thus has taken share during this. We expect a focused management team to regain share. The business model's durability stems from three interlocking dynamics. First, switching costs are extraordinarily high. Once a medical device is validated for sterilization at a specific facility, changing that facility requires extensive regulatory work, testing, and approval. A device sterilized in one location cannot simply move to another without undergoing significant re-qualification. That regulatory friction creates a durable moat. Customers are effectively locked in. Second, the sterilization service represents a low single-digit percentage of the total manufacturing cost of a medical device. Because it is such a small percentage of overall device cost, customers are willing to pay for convenience and reliability rather than shop aggressively on price. Geography matters enormously. Shipping a device from Michigan to Arizona (for example) for sterilization becomes economically irrational when a facility exists nearby. Sotera's geographic footprint means customers pay a premium for proximity and certainty, not to compete on commodity pricing. Third, regulation has created supply-side dynamics that favor consolidated operators. In April 2024, the EPA finalized stricter ethylene oxide emissions standards for sterilization facilities. Sterigenics responded by committing roughly $200m of capital to upgrade its facilities to comply with the strictest version of the rule. In 2026, this capex should total ~$50m and will largely complete facility improvements. In July 2025, the Trump administration granted two-year compliance extensions to 41 sterilization facilities, acknowledging that the 2024 rule would force closures. Even with those extensions, smaller operators are under pressure. KPR's Augusta, Georgia facility is closing, affecting over two hundred employees. Cosmed Group filed for bankruptcy under EtO litigation exposure. As supply comes offline and capacity remains constrained, Sotera will capture displaced volume at improved pricing. In March 2026, the Trump administration proposed rescinding and relaxing key portions of the 2024 rule, citing concerns about facility closures and domestic medical device supply chain disruption. The public comment period closed May 15, 2026, and the EPA should finalize a decision within the next year. Regardless of which direction the final rule takes, Sotera stands to benefit. Industry-wide sterilization capacity is running tight. Sotera targets 80% utilization across its portfolio, and management reports a good operational position globally despite occasional regional pinch points. If the EPA finalizes the strict 2024 rule, Sotera's capital spend is justified, and competitors without the scale to absorb compliance costs will exit. If the agency relaxes the standards, the majority of Sotera's compliance capex is already behind them and should lower the probability of future litigation risk. We see 50% near-term upside; however, we are planning to own this durable business for many years. Post-litigation, we would label this as a compounder. |
| SPHR | During the quarter, Sphere continued its strong performance as the market realizes the strong underlying unit economics, in the face of weaker Las Vegas Strip attendance. Continued success in Vegas makes selling future Spheres easier. Sphere Abu Dhabi remains on track, which, given the ongoing war, was a concern. Finally, Sphere announced a new immersive experience, Rocky Horror Picture, which should add incremental, high-margin shows to the slate, increasing utilization. While the Sphere story has largely played out (at least episode 1), we are inclined to let an N=1 asset the leeway to become a large position even though the valuation is much different today. Great assets and management teams often have longer right tails than one may initially underwrite. While most believe Vegas is forever in decline, visitation trends were positive y/y in May and represented the 3rd month of the year with positive y/y growth. Visitation and comps are substantially easier, concerts continue to perform well, and new films should drive visitation and revisitation at strong rates, even with The Wizard of Oz coming up to its first anniversary. While the Sphere show slate is nearing the optimal/maximum number of shows per year, the exosphere is an incremental high-margin opportunity that will become an important revenue driver. At the end of the quarter, our top 5 positions were Cash, NVDA, SPHR, GLW, and CALY. |
| CALY | Post the announced sale of their TopGolf business, the next catalyst to the story is demonstrating the clean, high-quality business of the remaining club, ball, and apparel business. Q1 net sales rose 9.2% to $687.5m, adjusted EBITDA climbed 31.1% to $163.7 million, and non-GAAP net income from continuing operations increased 96%, with gross margin up roughly 260 basis points, absorbing about $18m of incremental tariff expense. Management raised its full-year outlook, and the summer thus far has been a net positive for the golf industry. On capital return, through April 30, Callaway repurchased 5.6 million shares at an average cost of $14.08 ($79 million of the $200 million authorization), and on May 1 the company settled its $258 million of convertible notes in cash and remains in a net cash position. Our thesis continues to play out, and while the stock has materially appreciated, we still see upside to numbers. Management is acting exactly as expected, reducing debt, returning capital – a complex-to-simple story easy for all to understand better. At the end of the quarter, our top 5 positions were Cash, NVDA, SPHR, GLW, and CALY. |
| HCC | Unsurprisingly, a commodity-producing company's stock experienced significant volatility during the quarter. Had the quarter ended one month prior, it's possible we would have been talking about Warrior as a top performer during the quarter. On May 23, 2026, a gas explosion at a coal mine in Shanxi province killed 82 workers, making it China's deadliest coal mining accident since at least 2009. The blast occurred at the privately owned Liushenyu mine in the coal-belt region of Shanxi, and a deadly gas explosion occurred at the Liushenyu Coal Mine in Qinyuan county with 247 workers underground; all four coal mines under Tongzhou Group suspended operations following the incident, driving met coal prices higher. Blue Creek remains the next leg of the story. Increasing production and sales volume at this mine should drive revenue and EPS growth, even in the face of an overall weaker met coal pricing environment. |
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