For starters, thanks to everyone who came out for the live session. We are not the largest community, but we’re definitely one that is growing in both numbers and aura.
I’m truly honored to have you by my side on this journey.
This update is less numerically driven and more about the precise direction we’re taking with both our holdings and our project.
As with every update, we’ve included a TL;DR summary that you should be able to blast through in <5 minutes.
None of the following should be construed as investment advice. Please consult a financial advisor before making any investment decision. You will find a full disclaimer at the end of this post.
It is currently a brutal 47°C (116°F) in Europe, and Paris apparently had to ban alcohol because people were getting drunk, overheating, and melting into the pavement.
That’s why we’ve swapped out our usual cozy fireplace background for a much more appropriate virtual beach.
You’re welcome for the teaser! 😂😂😂
Engine #2: SaaS-pocalypse & Oil
Most oil and gas dependencies have been sold off (Saturn, Yangarra, Constellation). The oil cycle is getting twitchy due to macro sanctions and an impending supply wave (nuclear pivots in Germany, new Canadian West Coast gas pipelines targeting Southeast Asia).
The One Exception: TGS. It was a 15% position, yielded a massive return, and remains an elite business with capital allocation skills that make serial software acquirers look like amateurs. Expect wild volatility forever, but it’s a long-term compounder.
Ongoing Favorites
ASG: A major write-up went out last Friday on the company. Zero competition in a niche space, stellar management, and a highly probable medium-term acquisition catalyst by a medical giant.
AEP: A slow-burning 10-year cyclical play handling construction and housing material logistics. They are perfectly positioned to profit from global housing supply shortages.
CNO: A high-quality micro-cap that has been stalling due to shifting military/aerospace contractor priorities. They recently pivoted into nuclear cash flows. There is no immediate short-term catalyst, but the management team is young and highly competent.
Write-Up Pipeline
You have screened 2,000+ companies so far this year. The cream of the crop is dropping soon in a super detailed format:
Computer Modeling Group: High-margin Canadian reservoir simulation software. They have acquired 4 companies in 33 months and should return to their historical 40% EBIT margin. A massive deep-dive report is completely ready to drop in the next week-ish.
Blackline & Monday: The SaaS-pocalypse narrative (AI replacing software) has created absurdly cheap valuations. Blackline is positioned to take over the back-end auditing work of the Big Four accounting firms. Monday.com has 33% of its market cap sitting in pure cash and is aggressively buying back shares.
Portillo’s: Juicy Chicago hot dogs and beef sandwiches. Debt is a bit high and the share structure is slightly weird, but they hit every single operational metric they set for themselves.
Smart Organic: A €200m Bulgarian (Eastern European) organic protein food company. Exceptional quality and cost leadership. An interview with the CEO is scheduled for tomorrow, with a write-up following shortly after.
Engine #1: Our Private Ecosystem
We are no private equity firm flipping companies for a quick buck. As prviously discussed, we are building a permanent home for small businesses generating sub-€1m in EBITDA.
Valuation Rules: We strictly target an adjusted free cash flow yield of 15% or higher (roughly less than 6x EBIT/FCF). There are no competing bidding wars in this tiny niche, os patience is a virtue.
Closing Notes
Possible PropTech Bets: We are exploring 10–20% minority checks into early-stage AI software game-changers like Kausa and Fragua to capture massive productivity tailwinds. More on this soon.
Subscriber Submissions (Rubo + Genius Sports + BeWhere): We looked at them, but they failed a few of our tests. No major price dislocations, no scalability, and zero catalysts to make them massive home runs.
As a closing thought, we are officially re-addicted to Chess.com after a multi-year hiatus.
We are looking to learn and welcome anyone who wants to challenge us.
Tag = alyela
Hope to see you around!
