| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 14.92% | 23.2% | 9.1% |
Voss Value Offshore Fund returned 23.2% net in Q2 2026, bringing year-to-date returns to 9.1%. The manager is capitalizing on improving small-cap fundamentals as earnings revision breadth inflects positive after a three-year downgrade cycle. Three new positions exemplify the strategy: Rackspace Technology, a high-leverage turnaround with unutilized data center capacity positioned for the AI infrastructure wave; Versigent, an Aptiv spin-off trading at 5x EBITDA despite oligopoly positioning in automotive wire harnesses with strong EV tailwinds; and Hill & Smith, a UK-listed industrial generating 84% of profits in the US and trading at a 30% discount to American peers while benefiting from grid modernization and data center growth. The manager also initiated a position in De'Longhi, the global leader in espresso machines, where the high-margin Professional Coffee segment is being valued at near zero despite 30%+ growth. While acknowledging structural risks in the concentrated AI buildout—including hyperscaler cash flow consumption, rapid token pricing decay, and absent productivity gains—the manager sees fertile hunting ground in mispriced SMID caps with strong fundamentals, shareholder-friendly capital allocation, and concrete catalysts for value realization over an 18-24 month horizon.
Voss Capital is deploying capital into undervalued small and mid-cap special situations emerging from a multi-year industrial recession, with particular focus on turnarounds, spin-offs, and mispriced compounders trading at significant discounts to intrinsic value.
The manager expects small-cap fundamentals to continue improving as they emerge from a multi-year industrial recession. With valuations at deep discounts to large caps and M&A activity picking up, the manager sees a fertile environment for active stock selection in SMID caps. The manager remains focused on their time-tested process despite recent disappointing results, viewing market volatility as a small toll to pay on their long-term alpha odyssey. The manager is cautiously optimistic about the broadening of earnings revisions beyond AI infrastructure but remains vigilant about concentration risks in the AI buildout.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Aug 25 2026 | 2026 Q2 | HILS.L, RXT, VGNT | AI Infrastructure, Data centers, earnings revisions, Industrial, small caps, special situations, Turnarounds, value | - | Voss Capital returned 23.2% net in Q2 2026, deploying into undervalued small-cap special situations as fundamentals turn. New positions include Rackspace Technology (AI infrastructure turnaround with unutilized data center capacity), Versigent (automotive wire harness oligopolist at 5x EBITDA), Hill & Smith (US grid infrastructure play at UK discount), and De'Longhi (coffee equipment leader with mispriced Professional segment growing 30%+ annually). |
| May 28 2026 | 2026 Q1 | AAPL, EEFT, GOOGL, PAR, SRE, XPOF | activism, AI, Long/Short, momentum, semiconductors, Texas, Utilities, value | SRE | Voss underperformed in Q1 as AI momentum dominated markets, but initiated major Sempra Energy position targeting 17% IRR through utility restructuring catalyst. Activist campaigns at PAR, EEFT, and XPOF driving operational improvements. Manager sees widespread mispricings in software and value stocks as market chases semiconductor exposure at bubble-like valuations. |
| Mar 4 2026 | 2025 Q4 | CHH, CLBT, FLYW, PAR | AI, Franchising, Hotels, small cap, software, technology, value | - | Voss Value underperformed in Q4 2025 due to software overweight amid AI hysteria, but maintains conviction that incumbents with domain expertise will successfully integrate AI capabilities. Key holdings include undervalued software companies PAR, Cellebrite, and Flywire, plus new hotel franchisor Choice Hotels at historically low valuations with significant re-rating catalysts including potential major cash unlock. |
| Nov 25 2025 | 2025 Q3 | CLBT, EEFT, FIVN, FLYW, NVDA, PLNT, PRKS, XPOF | AI, Fintech, growth, small caps, software, technology, value |
FIVN EEFT XPOF PRKS FLYW CLBT |
Voss Value Fund's concentrated small-cap value strategy underperformed in Q3 as AI speculation drove extreme market polarization. Portfolio companies like Five9, Flywire, and Xponential Fitness trade at historically low valuations despite strong fundamentals. The manager views current market dynamics as unsustainable, positioning for rotation back to value when AI investment bubble deflates and fundamentals reassert dominance. |
| Aug 22 2025 | 2025 Q2 | AMZN, ARE.TO, CLBT, CRM, ECN, FIVN, GENI, GOOGL, META, MSFT, NOW, PHIN, PRKS | AI, Concentration, Long/Short, nuclear, small caps, technology, undervalued, value | - | Voss Value posted 1.0% in Q2 amid historic small-cap underperformance, maintaining conviction in undervalued individual names like Genius Sports and Five9 despite broader market froth. Employment data shows concerning stall speed while AI capex spending creates uncertainty. Portfolio positioned defensively with significant shorts while targeting companies with strategic value and M&A potential. |
| Jun 4 2025 | 2025 Q1 | FLYW, SN, TSLA, WMT | consumer, ETFs, innovation, Long/Short, payments, small caps, tariffs, value |
FLYW SN |
Voss outperformed in Q1 despite negative returns, capitalizing on extreme small cap dislocation. New positions in Flywire and expanded SharkNinja holdings reflect opportunistic accumulation of quality compounders at discounted valuations. Record small cap outflows and mega cap euphoria have created unprecedented dispersion, positioning the fund for potential outperformance when narratives inevitably shift toward fundamentally sound, undervalued businesses. |
| Feb 19 2025 | 2024 Q4 | AMTM, CTS.TO, EEFT, FUJHY, J, MBGYY, PLYA, SWI, TM, TSLA | buyouts, Long/Short, M&A, small caps, special situations, value |
EEFT MBGYY FUJHY AMTM |
Voss Value delivered 19.2% returns in 2024 by exploiting extreme valuation disparities through small cap M&A focus. Three successful takeouts (SolarWinds, Converge Tech, Playa Hotels) validate the strategy of targeting undervalued companies in special situations. With pent-up deal demand and several more acquisition candidates in the portfolio, the fund is positioned to capitalize on continued M&A activity while market valuations remain stretched. |
| Nov 26 2024 | 2024 Q3 | BWA, BYD, CAVA, LI, NIO, PHIN, RCM, TM, WMT | Auto Parts, Electric Vehicles, Long/Short, market inefficiency, small caps, value | PHIN | Voss Value delivered 7.4% net returns in Q3 through concentrated long/short positioning focused on undervalued small caps. The fund's new core position in auto parts supplier Phinia capitalizes on slowing EV adoption and competitive dynamics favoring ICE technology. Despite elevated market valuations and speculative excess, the manager maintains conviction in finding alpha through disciplined value investing. |
| Aug 26 2024 | 2024 Q2 | PRKS | consumer, Entertainment, Rate Cuts, small caps, Theme Parks, value | PRKS | Small caps are oversold and overly macro-sensitive, creating opportunities as Fed cuts approach. Initiated PRKS at 6.8x EBITDA versus historical double-digit multiples, targeting 80% upside. Theme parks offer defensive characteristics with improving margins under activist ownership. Expect balanced performance as mega cap tech slows and small caps inflect higher on positive earnings revisions. |
| Jun 8 2024 | 2024 Q1 | ALTG, GENI, IMXI, PAR, RCM, RTO.L, SLCA, SWI | Long/Short, M&A, small caps, special situations, technology, value | - | Voss Value delivered 9.0% returns in Q1 while maintaining concentrated exposure to undervalued small caps. Despite continued underperformance versus mega cap tech, the manager sees attractive risk-reward with 11% forward FCF yield and multiple potential M&A targets. Key positions include PAR Technology and SolarWinds, both trading at significant discounts to fair value estimates. |
| Feb 27 2024 | 2023 Q4 | GFF, RCM | AI, Healthcare IT, Housing, Long/Short, small caps, value |
AAGFF BRCM |
Voss Value outperformed in Q4 with strong small cap value positioning. Manager maintains conviction in small cap outperformance despite recent correction, citing attractive valuations and faster earnings growth. Portfolio focused on housing-related cyclicals and contrarian healthcare IT play R1 RCM. Multiple catalysts including Fed cuts, M&A acceleration, and housing shortage dynamics support optimistic outlook for patient value investors. |
| Jun 11 2023 | 2023 Q3 | AAPL, CRH, CROX, ECN.TO, NVDA, SKY, TSLA | Aggregates, Construction, Homebuilders, infrastructure, materials, small caps, value | - | Small caps are experiencing historic bear market with Russell 2000 down 33% from peak, creating exceptional opportunity as asset class has been higher 99% of time over 6-year periods. Portfolio positioned in credit-sensitive stocks at 6x earnings with free cash flow yield three times risk-free rate. New large CRH position benefits from infrastructure spending and NYSE relisting catalyst. |
| Aug 23 2023 | 2023 Q2 | IIIV, TYL | Fintech, growth, payments, small caps, software, technology, value | IIIV | Voss Value outperformed small-cap benchmarks in Q2 despite extreme value underperformance headwinds. The fund initiated i3 Verticals, a FinTech company transitioning to software with attractive valuations following sector selloffs. With portfolio free cash flow yields over 12.5% and economic conditions normalizing, the manager sees strong positioning for alpha generation through fundamental stock picking. |
| May 16 2023 | 2023 Q1 | ASO, ECN.TO, PLYA | Banking, credit, Long/Short, retail, small cap, Travel, value |
PLYA ASO ECN.TO |
Small-cap value fund underperformed in Q1 due to extreme style rotation but maintains strong portfolio fundamentals with 15% FCF yield. Key holdings include travel recovery play PLYA, expanding retailer ASO, and specialty finance company ECN in strategic review. Positioned for outperformance as factor headwinds fade and M&A activity rebounds in second half 2023. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIThe letter extensively discusses the AI infrastructure buildout as a historic capital formation cycle, with hyperscalers now accounting for roughly half of all Russell 3000 CapEx. However, the manager expresses concern about structural risks including hyperscaler cash flows being fully consumed by CapEx, rapid AI token pricing decay, and lack of economy-wide productivity gains despite $1.5 trillion in cumulative outlays. The manager warns that if open-source models gain share while enterprise ROI remains lackluster, it could force a reality check in this high-stakes game. |
Hyperscalers Data Centers CapEx Token Pricing Productivity |
Data CentersData centers represent a major investment opportunity across the portfolio. The manager initiated positions in Rackspace Technology to capitalize on unutilized data center capacity and the AI infrastructure wave, and in Hill & Smith where data center exposure has risen to 9% of revenue. The manager views utility-linked data center CapEx as more certain than other AI investments and favors companies benefiting from this buildout. |
Infrastructure Capacity Utility CapEx Growth | |
Small CapsThe manager notes that small-cap fundamentals are quietly turning the corner after a multi-year industrial recession. SMID-cap earnings revision breadth has inflected positive, emerging from a three-year downgrade regime to finish Q2 at +10% diffusion rate. Valuations have moved from a historical premium over large caps to a deep discount, while M&A and corporate action catalysts are picking up, creating fertile hunting ground for active stock selection. |
SMID Cap Earnings Revisions Valuation M&A | |
SemiconductorsSemiconductors are discussed as the single booming sector serving as the load-bearing pillar for the broader economy. The semiconductor IP industry is ripping while traditional cyclicals flatline. The manager notes that companies in the sweet spot of hyperscaler spending have posted the strongest positive earnings revisions and outperformed. However, this extreme concentration carries structural risk. |
Chip Demand Earnings Revisions Concentration Risk | |
Electric VehiclesThe manager initiated a position in Versigent, noting that hybrid vehicles carry 1.5x and battery electric vehicles carry 1.7x the wire harness content of ICE vehicles. Versigent holds 33% market share in EV/hybrid platforms and counts nine of the world's ten largest OEMs as customers. The manager views the shift toward electrification as a structural tailwind for wire harness content per vehicle. |
Wire Harness Content Growth Electrification | |
Grid UpgradeElectrical grid infrastructure is highlighted as a key growth driver, particularly through the Hill & Smith position where grid-related revenue now represents 24% of total group revenue. The manager notes record order backlogs at V&S Utilities for substation structures and views utility CapEx as more certain than other infrastructure investments. This theme benefits from both traditional grid modernization and data center power demands. |
Utility CapEx Substations Infrastructure | |
CoffeeThe manager initiated a position in De'Longhi, the global number one espresso machine producer, highlighting the secular transformation toward specialty coffee and premiumization. The Professional Coffee segment is growing 30%+ year-over-year for five consecutive quarters, driven by rapid cafe openings globally and automation adoption to combat labor costs. Two US customers alone have 3,500+ new stores planned through 2029, each equipped with multiple La Marzocco machines. |
Specialty Coffee Premiumization Cafe Growth Automation | |
EarningsCorporate earnings revisions are described as the market's north star and are unequivocally positive. Consensus earnings for large caps in every single GICS sector have been revised higher since May, showing unusual positive breadth inconsistent with any cyclical economic peak. SMID-cap revision breadth has inflected higher after troughing at -28% in 2023 to finish Q2 at +10%. |
Revisions Breadth Upgrades | |
| 2026 Q1 |
AIManager describes AI as driving extreme market concentration and momentum, with semiconductor exposure at 100th percentile historically. Notes AI capex surge has collapsed free cash flow at mega-cap tech companies, with ROI on hundreds of billions spent still to be determined. Views AI as creating viral memes and intellectual conformity replacing individual research. |
Semiconductors Capex Momentum Concentration |
MomentumMomentum factor up ~40% YTD versus Quality down -30%. Manager notes momentum factor's recent performance broke records set 26-27 years ago at internet bubble peak. Describes current regime where viral memes, pure momentum, and extreme concentration dictate market returns for extended horizons. |
Factor Bubble Concentration Volatility | |
SemiconductorsSemiconductor space has assumed 16.9% of total US market cap, up from 6.8% three years ago. Active manager semiconductor exposure is at 100th percentile historically. Manager flags emerging risk of Chinese memory supply hitting US market as potential supply-side concern. |
Market Cap China Memory Supply | |
UtilitiesManager initiated significant position in Sempra Energy, viewing it as opportunity to unlock value through simplification. Highlights Oncor's 17% annual rate base growth and $47.5 billion capital plan over five years. Sees transmission assets as highest quality in industry with strong regulatory visibility. |
Rate Base Transmission Texas Growth | |
Energy TransitionDiscusses unprecedented secular tailwinds from Permian Basin electrification and significant upgrade to Texas transmission infrastructure. Notes over 70% of Oncor's capital plan focused on transmission projects growing at ~22% CAGR, faster than six of seven 'Mag-7' stocks. |
Transmission Electrification Infrastructure Texas | |
ValueValue factor down -8.35% YTD while momentum surged. Manager describes potential dislocations where unlevered growth businesses with recurring revenue trade at discount to levered, low-growth cyclicals. Sees widespread mispricings in software due to sector-wide viral fears. |
Dislocation Software Mispricing Discount | |
| 2025 Q4 |
AIAI emergence has created market hysteria and broad software sell-offs despite limited real-world adoption. The manager views AI as accelerating vendor concentration, with dominant vertical software platforms positioned to thrive by integrating AI into mission-critical systems. Early adopters of productive technologies historically capture more benefits than infrastructure providers. |
Artificial Intelligence Software Automation Technology |
SoftwareSoftware sector treated as monolith awaiting AI disruption, creating significant overweight drag on performance. Manager believes incumbents with engineering talent and proprietary data have structural advantages to successfully reinvent themselves for an agentic world. Market incorrectly pricing software companies despite their defensive moats. |
Enterprise Software SaaS Technology Vertical Software | |
ValueFund experienced broadening out of returns and leadership shift to small cap value industries, but was unable to capitalize due to software overweight. Traditional value industrial exposure outperformed but was outweighed by software positioning. Market showing renewed enthusiasm for oldest industries like materials and tools. |
Small Cap Value Investing Industrial Materials | |
HotelsChoice Hotels represents asset-light, high-margin hotel franchisor trading at distressed multiple due to cyclical headwinds. Company shifting portfolio toward higher revenue segments like Extended Stay and international markets. Trading at historic discount with multiple paths to re-rating including potential M&A preparation. |
Hospitality Franchising Real Estate Travel | |
| 2025 Q3 |
AIAI investment has surged by ~$300B since 2023, contributing over 1% to US GDP. However, enterprise AI adoption is slowing rather than accelerating, with Goldman Sachs data showing adoption creeping from 9.3% in Q2 to just 9.9%. The circularity of recent AI investment announcements and unprecedented scale of vendor financing raise serious questions about sustainability. |
Data Centers Enterprise Software Semiconductors Cloud Automation |
ValueThe quality and value factors have declined roughly 20% year-to-date, creating meaningful headwinds for the investment style. Half of the portfolio is currently trading at or near all-time low valuations, which offers an attractive forward setup as the market remains fixated on growth deceleration. |
Small Caps Quality Buybacks Earnings | |
SoftwareSoftware companies, particularly smaller ones, are deemed secular losers by the market despite the manager's belief that incumbent platforms hold distinct advantages over point solution startups. The Software factor has suffered net revenue revisions of -5% to -7%, resulting in some of its worst relative underperformance on record. |
SaaS Enterprise Software CRM Cloud | |
FinTechThe portfolio's concentration in FinTech has weighed heavily on performance this year. Companies like Euronet Worldwide and Flywire represent significant positions, with Flywire showing strong fundamentals despite stock price languishing, and the UK business growing ~40% despite restrictions. |
Payments Digital Payments Financial Services | |
| 2025 Q2 |
AIManager discusses AI as both opportunity and threat across portfolio companies. Notes massive AI capex spending by mega-cap tech companies ($351B in 2025 to $512B in 2027) while expressing skepticism about returns. Views AI as creating narrative challenges for companies like Five9 where AI is perceived as existential threat to contact center software, but sees this as creating investment opportunity. |
Artificial Intelligence Capex Infrastructure Automation Contact Centers |
Small CapsManager highlights extreme small-cap underperformance with 6.6% annualized returns over 10 years trailing large companies by 7.3%, the widest gap since 1935. Notes record small-cap outflows despite normal valuations for profitable companies. Sees this as creating opportunity in undervalued small-cap names. |
Russell 2000 Valuation Outflows Underperformance Opportunity | |
ValueManager emphasizes valuation discipline as compass for investment decisions. Highlights extreme valuation disparities across markets with individual stocks materially undervalued while broader indices marked by froth. Focuses on companies trading at significant discounts to intrinsic value and peers. |
Valuation Discipline Undervalued Intrinsic Value Discount | |
NuclearManager discusses Aecon Group's nuclear business showing 70% revenue growth over 18 months, building first grid-scale Small Modular Reactor in North America. Notes market not ascribing proper value to nuclear assets despite enthusiasm for other nuclear stocks up hundreds of percent this year. |
SMR Nuclear Power Infrastructure Energy Valuation | |
| 2025 Q1 |
Small CapsSmall caps are priced for recession while mega caps trade at lofty multiples, creating a uniquely fertile opportunity set for long/short equity. YTD fund flows out of small caps have smashed all previous records, causing capital to be siphoned out mercilessly. This dichotomy creates compelling value opportunities in quality small cap names. |
Russell 2000 Value Dispersion Flows Opportunity |
ETFsThe market is increasingly dominated by ETF flows and meme-ification, where retail money is beta chasing and driving indexes up in the near term. ETF flows create a steady gush of inflows into large caps while small caps face record outflows, contributing to market dispersion and creating opportunities for active managers. |
Flows Beta Passive Retail Dispersion | |
PaymentsFlywire represents a capital-light cross-border payments and software platform trading at a significant discount despite structural advantages in education, travel, and healthcare verticals. The company is successfully diversifying beyond international student payments into higher-value software contracts with better recurring revenue characteristics. |
Cross-border FinTech Software Education Healthcare | |
Consumer ElectronicsSharkNinja is viewed as a secularly growing category leader with unique innovation capabilities, brand equity, and global expansion potential. The company routinely generates consumer phenomena and creates new categories, with strong direct-to-consumer growth potential and international expansion opportunities in early stages. |
Innovation Brand DTC International Categories | |
Trade PolicyTariffs have dominated headlines but companies like SharkNinja have been preparing for years, with 90% of US-bound production manufactured outside China by Q2 2025. The administration is expected to implement more growth-positive policies in the back half of the year after front-loading growth-negative policies early in the term. |
Tariffs China Manufacturing Supply Chain Policy | |
| 2024 Q4 |
M&AThe fund's main theme for 2025 focuses on small cap M&A and special situations after two years of dismal deal flow. Three quick wins from acquisitions occurred year-to-date: SWI, CTS CN, and PLYA. The manager expects several additional portfolio companies to be acquired as the year progresses. |
Special Situations Buyouts Private Equity Takeovers Deal Flow |
ValueThe fund identifies extreme valuation contradictions where the cheapest quartile of stocks is cheaper now than in 2014 while the most expensive quartile is much more expensive. This creates a superb stock picking backdrop with long/short equity opportunities born from these extreme contradictions. |
Valuation Discipline Contrarian Undervalued Mispriced Stock Picking | |
Small CapsSmall caps continue to underperform despite the manager's focus on this segment. The fund maintains concentration in small cap names trading at significant discounts to peers and private market valuations, particularly in special situations and M&A candidates. |
Russell 2000 Underperformance Alpha Factor | |
| 2024 Q3 |
Auto PartsPhinia represents a compelling opportunity as an ICE auto parts supplier benefiting from EV adoption slowdown and competitive withdrawals. The company's Gasoline Direct Injection technology and aftermarket business provide defensive characteristics with growth potential from market share gains. |
ICE GDI Aftermarket Fuel Systems Market Share |
Electric VehiclesEV penetration has flatlined in the US and China while declining in Europe, creating opportunities for ICE-focused suppliers. Consumer surveys show growing disinterest in BEVs, leading to substantial discounts and inventory issues for manufacturers. |
BEV Penetration Consumer Demand Inventory Discounts | |
ValueMarket inefficiency has increased with 50% of equity assets passively indexed and minimal value-sensitive capital allocation. Many small cap stocks trade below private market value while momentum stocks lack downside support based on valuation. |
Passive Indexing Private Market Value Momentum Inefficiency Selectivity | |
| 2024 Q2 |
Theme ParksManager initiated a new core long position in United Parks & Resorts (PRKS), viewing theme park operators as deeply out of favor despite positive fundamentals. PRKS offers a differentiated experience focused on animal content and educational shows, with strong defensive characteristics during economic downturns. The company has improved EBITDA margins from 29.2% to 41.3% under Hill Path Capital's leadership. |
Theme Parks Entertainment Travel Consumer Discretionary Defensive |
Small CapsSmall caps are currently driven by economic variables like economic surprises, USD, treasury yields, and credit spreads to an exaggerated degree compared to pre-2020. Manager believes any lessening of this macro dependency will give small caps significant room to run, especially as mega cap tech earnings growth slows while the rest of the market inflects higher. |
Small Caps Value Macro Sensitivity Relative Performance | |
| 2024 Q1 |
Small CapsManager maintains concentrated exposure to cheap small caps despite underperformance relative to mega cap tech. Small caps are more exposed to interest rates and have not found sustained propulsion, but with rate stability expected M&A activity to increase from multi-decade lows. |
Small Cap Valuations M&A Interest Rates Underperformance |
AICloud infrastructure and data center capex boom driven by AI dreams as companies scramble to figure out how to use AI to save or make money. If companies cannot figure out how to make or save tens of billions from AI capex soon, current levels seem unsustainable. |
Data Centers Cloud Infrastructure Capex Technology Investment | |
Sports BettingGenius Sports positioned to benefit from increased sports betting legalization and growth of in-game betting in the US. In-game betting comprises 25-30% of US football bets versus 80%+ in mature UK soccer market, with higher take rates for GENI. |
Sports Data In-Game Betting Legalization Take Rates NFL | |
BuybacksIntermex has found buyback religion, purchasing over $80 million in last twelve months and signaling ongoing $20-25 million per quarter. Company can compound EPS at 20%+ driven by sustainable buyback policy as diluted shares drop from 39 million to 33 million. |
Share Repurchases EPS Growth Capital Allocation Share Count Returns | |
| 2023 Q4 |
Small CapsManager maintains conviction that small cap value will outperform large caps going forward, citing low percentile historical valuations and expected 24% EPS growth in 2024 versus 11.4% for large caps. Small caps should benefit disproportionately from money market fund outflows when Fed cuts rates. |
Russell 2000 Value Outperformance Valuations |
HousingOngoing shortage of affordable US housing inventory with 40-year lows in transaction velocity due to mortgage rate lock-in effects. Housing starts have lagged household formations for 10 years, with favorable demographics as 4.2 million Americans turned 33 last year versus 3 million in 2008. |
Homebuilders Construction Demographics Inventory | |
Healthcare ITNew core position in R1 RCM, a leader in outsourced revenue cycle management with only 30% market penetration. Company offers substantial savings through regional labor arbitrage and automation technology, with AI and machine learning initiatives to drive further efficiency. |
Revenue Cycle Automation Hospital Efficiency | |
AIR1 RCM is utilizing machine learning and AI to automate processes and drive efficiency economics shared with customers. The company announced collaboration with Microsoft to improve billing coding productivity and has technology-oriented leadership focused on margin enhancement opportunities. |
Machine Learning Automation Healthcare Productivity | |
| 2023 Q3 |
Small CapsSmall cap stocks are experiencing their 3rd worst bear market by duration and 4th worst by magnitude in 40+ years, with the Russell 2000 down 33% from peak. The manager believes this creates exceptional opportunity as small caps have historically been higher 99% of the time over rolling 6-year periods. Current valuations at 12x P/E excluding negative earners represent significant discount to historical levels. |
Russell 2000 Valuations Bear Market Duration Opportunity |
Infrastructure SpendingThe Infrastructure Investment and Jobs Act (IIJA), CHIPS Act, and Inflation Reduction Act represent unprecedented government spending programs totaling over $1.2 trillion. Highway funding alone increases 50% above baseline, benefiting companies like CRH which is the #1 road paver. Manufacturing onshoring has led to $200B+ in announced mega projects through 2030. |
IIJA CHIPS Highway Onshoring Mega Projects | |
HomebuildersNew homebuilders are thriving despite higher rates due to mortgage lock-in effects keeping existing home inventory at all-time lows. Builders can buy-down mortgage rates for prospects while new single-family starts need to rise 15% just to reach historical averages. The solution to housing shortage remains building more supply. |
Mortgage Inventory Starts Supply Lock-in | |
AggregatesAggregates businesses operate as local oligopolies or monopolies due to high transportation costs relative to product value. CRH has the largest mineral reserves in North America at 19B tons, more than competitors Martin Marietta and Vulcan Materials. Pricing has only declined in 3 of the last 52 years. |
Oligopoly Transportation Reserves Pricing Local | |
| 2023 Q2 |
FinTechFinTech stocks are noticeably out of favor on Wall Street, especially post-SIVB bank failure and financial sector scare, with many hitting 10-year or all-time lows. The fund sees this as creating attractive relative valuations and opportunities in the space. |
Payments Software Valuations Banking SaaS |
ValueThe fund emphasizes value investing principles with their long portfolio having a weighted average free cash flow yield of over 12.5%, more than 8% greater than the 10-year treasury yield. They believe their stocks have effectively wrung out a lot of risks and have strong valuation support. |
Free Cash Flow Yield Discount Fundamentals Support | |
| 2023 Q1 |
TravelPLYA represents exposure to the all-inclusive resort recovery story, benefiting from strong consumer travel demand particularly to Mexico and budget-friendly destinations. Airport traffic data shows strong passenger growth in key locations like Los Cabos, Puerto Vallarta, Montego Bay, and Cancun compared to 2019 and 2022 levels. |
Hotels Resorts Mexico Recovery Tourism |
Sporting GoodsASO is positioned in fast-growing southern and southeastern markets with a plan to reach $10 billion revenue by 2027. The company's expansion strategy includes 120-140 new store openings while maintaining profitability across all locations, even in states where they operate single stores. |
Retail Expansion South Growth Stores | |
Specialty FinanceECN Capital operates loan origination platforms in manufactured housing and RV/Marine industries, generating revenue from origination and servicing fees with non-recourse credit risk. The company has initiated a strategic review process with Goldman Sachs following unsolicited inbound interest. |
Lending Origination Manufacturing Strategic Review | |
Credit StressThe fund is closely monitoring bank lending conditions through SLOOS data, noting that 46% of bankers are tightening credit standards which historically precedes loan declines. Regional bank lending has slowed from double-digit growth to flat post-Silicon Valley Bank failure. |
Banking Lending SLOOS Regional Tightening |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| May 28, 2026 | Fund Letters | Voss Value Offshore Fund | SRE | Sempra Energy | Other | Multi-Utilities | Bull | - | California, Corporate Restructuring, Distribution, Electric, infrastructure, natural gas, rate base growth, Regulated, spin-off, Texas, Transmission, utilities, value unlock | Login |
| Nov 25, 2025 | Fund Letters | Travis Cocke | FIVN | Five9 Inc | Information Technology | Systems Software | Bull | NASDAQ | Activism, AI, buybacks, cloud, Communications, consolidation, Margins, Software, Subscriptions, valuation | Login |
| Nov 25, 2025 | Fund Letters | Travis Cocke | EEFT | Euronet Worldwide Inc | Information Technology | Systems Software | Bull | NASDAQ | ATMs, buybacks, Catalysts, Fintech, guidance, Margins, Networks, Payments, Remittances, valuation | Login |
| Nov 25, 2025 | Fund Letters | Travis Cocke | XPOF | Xponential Fitness Inc | Consumer Discretionary | Leisure Facilities | Bull | NYSE | cashflow, Comps, EBITDA, Fitness, Franchising, Leisure, Maturation, Privateequity, Refinancing, valuation | Login |
| Nov 25, 2025 | Fund Letters | Travis Cocke | PRKS | United Parks & Resorts Inc | Consumer Discretionary | Leisure Facilities | Bull | NYSE | buybacks, cashflow, Competition, EBITDA, Leisure, leverage, Pricing, Privatization, Themeparks, Tourism | Login |
| Nov 25, 2025 | Fund Letters | Travis Cocke | FLYW | Flywire Corp | Information Technology | Systems Software | Bull | NASDAQ | B2b, Education, growth, healthcare, Margins, Payments, Software, takeover, Travel, valuation | Login |
| Nov 25, 2025 | Fund Letters | Travis Cocke | CLBT | Cellebrite DI Ltd | Information Technology | Systems Software | Bull | NASDAQ | Activism, cashflow, cybersecurity, Forensics, growth, Intelligence, M&A, Margins, Platforms, Software | Login |
| Jun 4, 2025 | Fund Letters | Voss Value Offshore Fund | FLYW | Flywire Corporation | Information Technology | Data Processing & Outsourced Services | Bull | NASDAQ | Australia, Canada, Cross Border Payments, education technology, Fintech, Healthcare Payments, SaaS, Travel Payments, turnaround, UK, Value | Login |
| Jun 4, 2025 | Fund Letters | Voss Value Offshore Fund | SN | SharkNinja Operating LLC | Consumer Discretionary | Household Appliances | Bull | NYSE | Brazil, Consumer Appliances, direct-to-consumer, france, Germany, growth, index inclusion, innovation, international expansion, Mexico, Social Media Marketing, tariffs | Login |
| Feb 19, 2025 | Fund Letters | Voss Value Offshore Fund | EEFT | Euronet Worldwide Inc | Information Technology | Data Processing & Outsourced Services | Bull | NASDAQ | ATM, Cross Border Payments, Fintech, money transfer, Payments, regulatory catalyst, Take Rate Expansion, turnaround, Value | Login |
| Feb 19, 2025 | Fund Letters | Voss Value Offshore Fund | MBGYY | Mercedes-Benz Group AG | Consumer Discretionary | Automobile Manufacturers | Bull | OTC | autonomous vehicles, capital return, defensive, dividend yield, Luxury Automotive, Share Buybacks, Technology leader, Value | Login |
| Feb 19, 2025 | Fund Letters | Voss Value Offshore Fund | FUJHY | Subaru Corporation | Consumer Discretionary | Automobile Manufacturers | Bull | OTC | acquisition target, capital return, EV Strategy, Free Cash Flow, Japanese Auto, net cash, Toyota Partnership, Value | Login |
| Feb 19, 2025 | Fund Letters | Voss Value Offshore Fund | AMTM | Amentum Holdings Inc | Industrials | Research & Consulting Services | Bull | NYSE | backlog, Cost-plus Contracts, Defense Contractor, deleveraging, Government Services, multiple expansion, spin-off, Value | Login |
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| TICKER | COMMENTARY |
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| RXT | We have initiated a small position in Rackspace Technology (RXT), a global managed service provider in both public and private cloud. RXT represents a classic high-leverage stub stock turnaround situation: a ~$900 million equity market cap ($3.42/share) resting atop a ~$3.8 billion enterprise value. The company carries ~$2.7 billion in net debt. We think majority owner Apollo's ~51% stake, with an estimated ~$8.50/share cost basis, keeps management firmly aligned with minority equity holders. As neoclouds like Nebius and CoreWeave garner attention as they scramble to build out new state-of-the-art data centers, Rackspace is in a unique position in that they already own or lease (long term, 15+ year contracts) a large data center footprint that has substantial unutilized capacity. In fact, you need only go back just a few years when their data center utilization was higher, and the company was generating over $800 million in run rate EBITDA, a number that will likely be under $300 million in 2026 due to high fixed costs. In our opinion, our confidence that they can move back much closer to that $800 million EBITDA level over the next 18-24 months is based on three factors: Whereas their Private Cloud business had been losing customers to Public Cloud, Sovereign AI has slowed and even reversed that trend as customers realize their data is a strategic asset that must be secured and strategically stored, especially in the industries Rackspace is known for serving (hospital systems, financial organizations, and governments). For the first time in years, they are guiding to growth in their Private Cloud business in 2026, something we expect to significantly accelerate in 2027. New management is going all in strategically on AI infrastructure and positioning Rackspace as the experts that will guide corporations on best practices in building (or rebuilding) their technological infrastructure in the age of AI. For instance, a strategic partnership with Palantir (who took a small stake in Rackspace recently) is a joint initiative whereby Rackspace and Palantir work in tandem to hand-hold customers in developing their AI strategy with Palantir providing their Foundry and AI Platform (AIP), with Rackspace providing the cloud backbone and jointly trained Forward Deployed Engineers (FDEs). The recent AMD agreement whereby Rackspace will deploy 30 Megawatts of compute with AMD chips is the real potential gamechanger. This gives Rackspace a strategic compute partner with access to the chips needed to add an AI inference layer to their service offerings. We estimate that once fully deployed, this opportunity can produce an incremental $500-600 million in revenue and $250-$400 million in EBITDA, with potential optionality to expand beyond the initial 30 Megawatt agreement. The stock has been hit recently as the company is aggressively repositioning around these budding opportunities. On the Private Cloud side, the company is trying to maximize the value of its existing data center capacity, which can involve some gaps in coverage as they shift lower margin customers out and move higher margin customers in. On the Public Cloud side, the company continues to shift away from low to negative value contracts on what are effectively resale agreement on AWS compute. This resulted in lowered 2026 revenue guidance and liquidity levels that do make us a bit uncomfortable in the near-term. However, the first clear tangible evidence of this turnaround also showed up in Q2 2026, as total Remaining Performance Obligations (RPO) exploded 40% sequentially to $809.1 million, driven by a surge in Long-Term RPO to $623.0 million (nearly doubling YoY). We would also note that Rackspace's bonds have traded up dramatically over the last few months from signaling distress to trading near par value. From the credit vantage point, we would argue the equity has materially underreacted. To be clear, RXT remains a high-wire act, and we have sized this position accordingly (~2%). Because of the high financial leverage, the equity behaves like a long-dated call option. If liquidity breaks or execution falters, it could face severe dilution (with an open ATM adding to Bear fodder), but if RXT successfully converts its massive idle data center capacity and surging RPOs into $500-800 million+ of run-rate EBITDA within two years, it is possible that a reasonable 10x multiple (compared to some peers at 25-30x) can lead to an $11-$15 stock with feasible blue-sky scenarios pushing to $20-$30+ (the price targets are estimates and are inherently uncertain). We also believe there is potential optionality, if needed, to reduce leverage by selling the Public Cloud business and becoming a Private Cloud managed services AI pureplay. While the exact sequence of events is still murky, our opinion is that high profile customers signings and announcements combined with funding details around the AMD chips build out could be the match that lights the virtuous cycle loop for Rackspace, lowering its cost of capital and allowing an amend and extend on its debt stack, thereby allowing Rackspace more maneuverability to expand relationships with AMD and other chip suppliers further while driving long term shareholder value. |
| VGNT | In a market obsessively chasing wannabe interplanetary enterprises and shiny new technologies set to transform the world, TGH has driven Aptiv's April fool's day spin-off to the junk yard, as if it were a burnt-up Pinto. Even after a sizeable rally, VGNT is priced as if it manufactures buggy whips on the eve of the Model T rumbling down the assembly line. The stock trades at roughly 5.0x EV/EBITDA and ~6.0x forward earnings. Clouded in the spin-off effluvium lies an entrenched global oligopolist with a kung fu grip on high-complexity automotive wiring market (see image in the appendix). These wires can be thought of as the circulatory and nervous system of a vehicle, as it transmits power, data, and signals to the ever increasing number of components within the car. It is a tailwind for the company that car manufacturers are adding more content in vehicles, including TV screens for the back seats, massaging functionality to the front seats, and multi-zone climate control. Versigent sells ~$750 worth of wire harness content per vehicle. Furthermore, the average hybrid vehicle has ~1.5x the content as an ICE vehicle and a battery electric vehicle has ~1.7x the content. Alongside a handful of other companies, VGNT forms a tight global oligopoly of wire harness manufacturers. The company has ~16% total market share, with content in 1 of every 6 vehicles globally and ~33% share in EV/hybrid platforms while counting nine of the world's ten largest OEMs as customers. Its proprietary iHarness software suite augments the company's ability and desire to deliberately chase the most complex, high-voltage, unique auto architectures rather than commoditized volume. VGNT now co-designs over 75% of the harnesses it manufactures and extracts nearly double the profit margins of legacy peers. Winning Ferrari's sole supplier Excellence Award in 2026 confirms that high-end engineering rather than commoditized pricing characterizes VGNT's deeply entrenched OEM relationships. The company has more planned program launches this year than any year in its history, with 39 launched in Q2. These launches are a minor near-term margin drag as capacity absorption ramps, but with the strongest forward design-in pipeline in company history, the forward margin outlook is promising. During an era when China auto OEM dominance is crushing many auto-related players, it is notable that Versigent's APAC-related revenue grew 15% while EMEA fell 11%. These are two sides of the same coin, since over 35% of the company's Chinese produced units were exported out of the region in Q2. We like that VGNT is a supplier to many of the top Chinese OEMs and will participate in their global market share gains. There are opportunities outside of the core Light Passenger Vehicle market as well. Management admits that as a subsidiary of Aptiv, Commercial Vehicle revenue opportunities have historically been reactive (OEMs came to us asking for help) rather than being proactively sold — low hanging fruit that is now getting attention as a standalone entity, and a lever that costs little to pull given the fixed engineering and manufacturing base already in place. We expect VGNT to take share in the Commercial Vehicle market (heavy duty / light duty / off highway vehicles) over the coming years. With a conservative $1.0 billion+ in cumulative FCF projected across 2026–2028 (~30% of its current market cap), a shareholder friendly capital return framework has already been established with a newly initiated dividend and a $250M buyback authorization in place. Our Base Case price target of $83.00 (at 7.0x EBITDA and 9.9x P/E) offers ~78% upside to today's price (the price targets are estimates and are inherently uncertain). |
| HILS.L | Hill & Smith is kind of like the inverse of Daniel Day-Lewis in There Will Be Blood—a brilliant British export flawlessly masquerading as an American industrialist. With ~84% of operating income generated in the US in the first half of the year, HILS is an extraordinary red-blooded American business acting as a sleepy UK-listed metal-bender. At the time of purchase, the shares were trading at a striking discount to their US listed peer group: ~8.7x NTM EBITDA compared to AZZ at 11.3x EV/EBITDA and VMI at 11.8x. HILS operates across three primary business segments: US Engineered Solutions (~52% of EBIT): Designing composite and steel utility poles, manufacturing substation components, and road safety barriers via category leaders like V&S Utilities, Creative Composites, and National Signal. Organic revenue growth in Q2 was 14% (total +18%), with operating income growing by +20%. Given strong demand and backlog, capacity is being added and should continue to bolster growth in the coming years. Galvanizing Services (~38% of EBIT): This is a real gem asset. HILS is one of the largest galvanizing businesses in the US (along with AZZ and VMI) and the UK, while operating at best-in-class margins – with EBIT margins of 26%. US galvanizing revenue climbed +16% in Q2, with overall divisional operating income expanding +18% organically. Capacity is being added in this segment as well with the company bringing on its Columbus, OH facility expansion around year end. UK & India Engineered Solutions (~10% of EBIT): This segment sells into disparate end markets, with the largest being transportation infrastructure. It is facing headwinds as UK road & infrastructure spending has been underwhelming to say the least. Electrical grid infrastructure now represents 24% of total group revenues, anchored by V&S Utilities (substation structures), which reported record order backlogs and double-digit growth. Data center exposure has risen to 9% of total revenue, bolstered by recent bolt-on acquisition Freeberg, a custom enclosure specialist that derives 50% of its sales directly from data center builds. HILS management is pruning the underperforming UK segment, shifting corporate financial reporting to USD from GBP in 2026, and reallocating capital into high-return US capacity expansions. Despite a temporary working capital build in H1 to fund US growth, the business remains a cash generating machine with a clean balance sheet at only 0.4x Net Debt/EBITDA while generating a high-20s % ROIC. Management is putting this balance sheet to work via disciplined bolt-on's at 7-10x EBIT and an active £100m share buyback program. HILS delivered a clean beat-and-raise quarter in Q2. We think this will be a trend as current consensus revenue growth estimates will prove conservative in the coming years. As the weak UK segment quickly becomes less meaningful and the larger US & Galvanizing segments continue growing well into the double digits, we think it is possible HILS outperforms management's current medium term revenue growth outlook of 5-7%. Accumulating a stake in a high-ROIC US grid and infrastructure compounder off London's discount rack is the kind of opportunity that gets our value-oriented special situation juices flowing. |
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