Summaries and Updates

Short summaries of all the active ideas.

The ‘Upside’ is indicated relative to the share price at the time of the monthly update rather than the initial write-up.

Last updated on the 30th of November.



Ascential (ASCL.L) – Large Asset Sale & Special Dividend – 15%+ Upside
Return so far: 4%. Posted on: 10-Nov-23
Ascential is a UK-listed company that operates three distinct businesses: Product Design (offers subscription-based market research reports), Digital Commerce (provides e-commerce-related services and software), and Events. The company recently announced the sale of the first two segments for net cash proceeds of £1.2bn or c. 85% of ASCL’s current EV. Both transactions are expected to close in Q1’24. After closing, ASCL intends to distribute £850m (or £1.93/share) of the proceeds to equity holders via a special dividend. Pro-forma for this distribution and debt repayment, the remaining Events business currently trades at only 7x TTM EBITDA, which is substantially below peers and comparable industry transactions. I would expect ASCL shares to re-rate to a more reasonable 10-12x EBITDA once the disposals close. Such valuation would result in RemainCo trading at £1.33-£1.64/share or £3.26-£3.57/share including the planned special dividend.



MiX Telematics (MIXT) – Merger Arbitrage – 16% Upside
Return so far: 4%. Posted on: 12-Oct-23
MiX Telematics, an automotive telematics company, is getting acquired by its smaller peer PowerFleet. Merger rationale is mostly centered on revenue synergies expected to be achieved from cross-selling of complementary products/services to different customer segments/geographies. Each MIXT share will convert into 3.19056 PWFL shares. The spread currently stands at 16% and there is plenty of cheap borrow for hedging. The merger is conditioned on approvals from shareholders of both companies as well as regulatory consent, both of which are likely to be received. Shareholder meetings are expected in mid Q1’24, and the merger will likely close promptly afterward.

Tidewater Midstream And Infrastructure (TWM.TO) – Large Asset Sale – Upside TBD
Return so far: -3%. Posted on: 10-Oct-23
In September Tidewater Midstream And Infrastructure sold its key asset, Pipestone, for C$650m, equal to two-thirds of the company’s EV. The transaction is set to close in Q4’23. Pro forma for the sale proceeds and excluding TWM’s public stake in LCFS, the remaining refinery and midstream assets are now trading at only 2.7x 2023E EBITDA, significantly below peer levels and the cost basis. The stock has barely budged on the news, which I believe has created a pretty compelling setup. I expect TWM shares to re-rate once the Pipestone sale closes, but there are also a few other potential catalysts down the road.

Ocean Wilson (OCN.L) – Large Asset Sale/Discount to NAV – 30%+ Upside
Return so far: 13%. Posted on: 2-Oct-23
Ocean Wilson, a London-listed holding company, trades at a 55% discount to its NAV. Earlier this summer, the company received a bid and initiated a strategic review for its key asset, a 57% stake in a Brazil-listed port towage operator Wilson Sons (PORT3). During a recent earnings release, management reaffirmed that the strategic review is still ongoing, noting that the company has received a number of indicative non-binding offers for its stake in PORT3. The other asset is a semi-liquid portfolio of investments into various private equity and hedge funds. I believe the setup will deliver 30%+ upside with a clear path to value realization over the next few months.

Neoleukin Therapeutics (NLTX) – Reverse Merger – Upside TBD
Return so far: 3%. Posted on: 21-Jul-23
NLTX is a busted biopharma that has recently completed a strategic review. As a result of it, the company decided to enter into a reverse merger with Neurogene which has a Phase 1/2 clinical-stage product for Rett syndrome, a rare genetic disorder. Merger consideration (16% of the combined company + CVR for any other assets aside from cash) might prove to be more valuable than the current market price. The downside seems protected by the cash balance of the combined company. It will take a few months for the reverse merger to close and, in the meantime, the market might start viewing the prospects of the post-merger company differently. There is also a tiny chance shareholders will reject the merger (the special meeting is set for December 13) and the company will opt for liquidation instead. Recently, a prominent biopharma investor Baker Bros has increased its stake in NLTX by acquiring 2.3m shares at $3.15-$3.45/share range (adjusted for 1 for 5 reverse split). This comes after the fund’s previous $21.7m investment in Neurogene’s private placement, paying an equivalent of $5.11 per NLTX share. Overall, Baker Bros will own over two-thirds of the combined company. 

Seritage Growth Properties (SRG) – Strategic Alternatives/Asset Sales – Upside TBD
Return so far: 11%. Posted on: 7-Jun-22 
Seritage Growth Properties is a heavily-shorted stock that owns interests in former Sears and Kmart properties throughout the U.S. SRG had planned to convert these retail locations into more valuable real estate such as office space or multi-family apartments. Poor execution and Covid disrupted their plans. The company is now in orderly liquidation mode with many properties already sold, debt repaid down to $360m, and maturity extended to 2025. Due to high leverage the eventual equity recovery will depend on the success of selling the last 35 properties in the portfolio. During Q3’23 earnings, the company guided for $14-$20/share in liquidations proceeds to equity holders (vs the current price of c. $9/share), however, later management noted that this target range should be adjusted downwards by $2-$3/share.

Far Limited (FAR:AX) – Liquidation/Activism Pressure – Upside TBD
Return so far: 12%. Posted on: 25-Feb-22
FAR is a busted Australian O&G explorer that had been horribly mismanaged for many years and is now in liquidation mode. Following a recent large special dividend, FAR now trades at a market cap of A$33m. Deducting A$5m in net cash and factoring in the recent A$6m tax claim related to a prior asset sale results in an enterprise value of A$34m vs A$83m in expected Woodside earnout payment. Management expects to consider monetization of the Woodside earnout closer to the first oil production from the property, sometime in H1’24. There might be a delay in the monetization / value realization process as the company intends to challenge the A$6m tax claim liability which could also lead to significant legal expenses. However, at current prices there is substantial margin of safety to wait and see how quickly the management comes to a resolution and whether this would actually slow down the monetization process.

Currency Exchange International (CURN) – Hidden High Growth Segment – Upside TBD
Return so far: 51%. Posted on: 22-Sep-21.
Currency Exchange International is one of 3 major suppliers of foreign banknotes in the US and also has a high-margin, fast-growing FX Payments business. The company is cheap at a $107m market cap and $91m in net cash (out of which $10-20m is excess cash) vs $18m in LTM EBITDA. CURN’s new initiatives have proved to be very successful so far. A significant amount of growth runway remains and the stock can easily double from the current levels. Management owns 28%, the majority of which is held by the founder/CEO. The incentives seem to be well aligned. A big positive is the recently announced buyback program which, if executed, will create significant incremental buying pressure. Since February, rumors have been ongoing in the media that CURN’s private peer Moneycorp is preparing for a sale. The reported price was 12x-13x EV/EBITDA compared to the less than 5x that CURN currently is trading at. 

Ambase Corporation (ABCP) – Litigation Stub – Multibagger Upside
Return so far: -57%. Posted on: 05-Feb-21.
The crux of the investment thesis in Ambase is the potential for a significant recovery to shareholders from the lawsuit that Ambase filed against its former partners, the developers of the nearly completed 111 West 57th Street, a super-tall condominium tower in Manhattan. After years of litigation discovery, there are breaches of contract by the developers that caused incontrovertible damages to Ambase. The judge now intends to expedite proceedings, aiming for document discovery to be completed by the year-end. This timeline should set the stage for motions for summary judgment by fall 2024. A favorable outcome in this litigation could result in multi-bagger gains for ABCP shareholders. Notably, the CEO, who owns a 40% stake, is personally funding the litigation through loans to the company.