Yet Another Value Podcast

Hosted by Andrew Walker

BusinessInterviews guestsExplicit

Website RSS feed LinkedIn YouTube

Episodes

424

Latest episode

Sep 2026

Language

EN-US

About the show

Yet Another Value Podcast is a new podcast from Andrew Walker, the founder of yetanothervalueblog.com. We interview top investors and dive deep into stocks and companies they are currently working on and investing in. While nothing on this channel is investing advice and everyone should do their own diligence, our goal is to frequently feature edgy and actionable value and/or event driven ideas. Please see our legal and disclaimer at: https://yetanothervalueblog.substack.com/p/legal-and-disclaimer

Listen to episodes

60 recent

September 11, 202656 min

UK stocks are dirt cheap. Why won't the boards act? $ZIG $CRW | Undervalued-Shares

A quarter of the companies on the London Stock Exchange's main board have disappeared in four years. Private equity keeps paying 50 and 60 percent premiums and still walking away with a bargain, because the starting valuations are broken. Swen Lorenz of Undervalued-Shares has spent the last few months writing open letters to UK boards telling them to stop waiting to be rescued and start pulling the levers they already have. I have been calling the UK an emerging market on this podcast for three years, and my problem with the trade is right there in the setup: if the only way you make money is owning the one company that happens to get taken out, that is not alpha. So we spend the first half on what would actually fix it. Swen puts most of the blame on the big domestic funds, in outflow for a decade, pushing companies toward dividends to fund their own redemptions. I put most of it on boards that own no stock, treat the seat as a club membership, and check the dividend box every year. Then we get concrete on two names. ZIGUP (ZIG), which I own a little of, has a plan that pays seven executives up to 69 million pounds if the share price re-rates, trades under four times EBITDA, and still has not bought back a single share. And Craneware, which turned down a 26 pound approach from Bain last year and now trades at 13. Swen on how retail investors can unlock the UK market: https://www.undervalued-shares.com/weekly-dispatches/retail-investors-can-unlock-the-uk-market-here-is-how His earlier write up on UK M&A and activism: https://www.undervalued-shares.com/weekly-dispatches/uk-ma-and-activism-is-the-dam-about-to-break/ This episode is sponsored by Fiscal.ai: https://fiscal.ai/yav . I am a customer and I pay for the API myself. Two things I use it for: a huge database of fund letters wired into the API, so the first thing I do when prepping a podcast is pull every recent letter on the name and see the bull and bear case, and audit-linked models where every line in the model links straight back to the source. You can get 15% off their AI connector at the link. Chapters: (00:00) Intro (01:23) Sponsor: Fiscal.ai (02:57) Swen Lorenz, Undervalued-Shares (04:30) A quarter of the LSE has disappeared (06:05) If the only exit is a takeout, is that alpha? (07:52) The levers boards refuse to pull (10:17) Boards, funds, or shareholders: who is to blame? (15:23) Active outflows everywhere, so why is the UK uniquely cheap? (16:57) Culture, and the case for foreign activists (18:25) Index funds, proxy advisers, and a 95% approval vote (21:04) The dividend trap: the board or the fund manager? (25:33) Boards as a club, and the Gamma Communications topping bid (28:07) You get what you pay for: UK board pay and stock ownership (30:03) Swen's activist checklist (32:00) The dam is about to break (34:12) ZIGUP: the business, and the letter (36:18) The VCP: 69 million pounds riding on the share price (40:19) Why I am disappointed: no buybacks, still paying the dividend (42:14) The real risk is an unsolicited bid at too low a price (43:51) US roadshows and other non solutions (48:27) Craneware: from a 26 pound bid to 13 (51:59) SaaSpocalypse fears and the trading update (53:32) Closing: a golden opportunity, and whether to relist in the US Swen Lorenz / Undervalued-Shares: https://www.undervalued-shares.com/ Links: Yet Another Value Blog - https://www.yetanothervalueblog.com See our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer

September 10, 202639 min

Zack Buckley on $PRTH's take private

In November 2025 Priority Technology's (PRTH, disclosure: long) chairman and CEO offered to take the company private at $6.00 to $6.15 a share, two days after a bad print knocked the stock from seven to five. Zack Buckley wrote a public letter opposing it. His sum of the parts gets to roughly $17 a share, a simpler multiple analysis gets to $19, and the June sale of a comparable payments business at 8.3x EBITDA implies $12 against a stock trading around $5.50. Ten months later the special committee still has not said a word. Zack walks through why the consolidated company is misread: over 90% of revenue is recurring or reoccurring, and 60% of it sits in Treasury Solutions, an 80%-plus EBITDA margin business built on the Finxera acquisition and CFTPay that has tripled EBITDA in four years. I push back on the payments-pocalypse, on the leverage, and on a Q2 that came in at the high end of the revenue guide and the low end of the EBITDA guide. Then we get to the part I actually care about: the 13D that says the chairman will not sell to a third party, the January 2025 secondary priced at $7.75 that the company said undervalued it, the $3 million of special committee legal costs added back in one quarter, and three straight earnings calls where nobody on the company side would say the word "process." I own the stock, so weigh all of it accordingly. Buckley Capital's public statement on the proposal: https://www.prnewswire.com/news-releases/buckley-capital-advisors-issues-statement-regarding-controlling-shareholders-take-private-proposal-for-priority-technology-holdings-inc-302620153.html This episode is sponsored by Trata: https://www.trata.com . Two buy-siders hop on a completely anonymized call and discuss a stock they both actually own, or sometimes one is long and the other is skeptical. If you like this podcast, you will like Trata. Chapters: (0:00) Introduction and disclaimer (1:22) Sponsor: Trata (2:26) Welcome, and why I own this one (3:19) What Priority Technology is and why Zack thinks it is mispriced (4:50) The three segments, and why Treasury is the whole story (7:39) Finxera, CFTPay, and the enterprise distribution model (9:29) The payments-pocalypse: is this a melting ice cube? (12:01) The Q2 print, the guide, and the accounting complexity (14:14) Leverage and the balance sheet (15:21) November 2025: the chairman bids $6.00 to $6.15 (17:31) A bad print, an illiquid stock, and a bid two days later (19:23) Ten months in: what takes a process this long? (21:37) The 13D that rules out a third party (23:06) The January 2025 secondary at $7.75 (25:47) What dragged-out processes usually mean (28:03) Would a strategic pay up? (29:59) Three earnings calls and not one word on the process (32:00) How the earnings decks changed after the bid (35:31) Tuck-in M&A, cash building, and the standalone case (36:58) What a fair number actually looks like Links: Yet Another Value Blog - https://www.yetanothervalueblog.com See our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer

September 7, 202648 min

$TBBB: Tiendas 3B is Mexico's Aldi. Is it too late to buy? | Fruit Tree Capital

Tiendas 3B has more than 3,700 stores in central Mexico, opens roughly 150 more every quarter, and earns its money back on a new store in about two years. It is the Aldi model, built by a founder who saw BIM work in Turkey, moved to a country where he did not speak the language, and has spent 21 years compounding it. Alberto Vadia of Fruit Tree Capital thinks it is a hundred bagger from here. My problem is the price. The stock is approaching $50, it has run a ton, and the bulls I was reading a few months ago were underwriting it in the mid 30s. So I push Alberto on the thing that actually decides this: do the unit economics survive the move from 3,500 stores to 15,000, or does a two year payback quietly become a four year payback once they leave central Mexico? We also get into the two equity offerings from a business that self funds every store it opens, why every other hard discounter on earth stayed private, what Costco at 40 times earnings implies for a Mexican retailer, and whether adding fruits and vegetables is an expansion or a risk. This episode is sponsored by Trata: https://www.trata.com/tbbb . Trata is two buysiders who own the stock talking about what they are actually worried about. They have two calls on TBBB that I used to prep for this one, and you can hear a sample at the link. Chapters: (00:00) Intro (01:48) Sponsor: Trata (02:50) Alberto Vadia, Fruit Tree Capital (04:22) What is Tiendas 3B, and the Aldi playbook (07:27) Why they own it: no debt, management, compounding (08:45) What is the market missing? (12:09) The chicken and egg problem in hard discount (13:25) Private label, 900 SKUs, and beating Walmart on ibuprofen (16:55) The stock has run: have we missed it? (18:52) Why every other hard discounter stayed private (21:12) Costco at 40x, and the Mexico haircut (26:43) Do the unit economics survive stores 5,000 to 15,000? (28:43) The self splitting distribution center model (31:46) The equity offerings, and who was actually selling (36:49) No loss leaders, and the missing fruits and vegetables (41:58) Why is a Mexican category killer listed in New York? (45:36) The bare bones deck and the HQ visit (46:50) Long term, volatility, customer first Alberto Vadia / Fruit Tree Capital: https://www.linkedin.com/in/albertovadia/ Links: Yet Another Value Blog - https://www.yetanothervalueblog.com See our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer

September 1, 202650 min

$LMB: Limbach missed the data center boom. Is that the opportunity? | 1 Main Capital

Limbach spent three years turning itself from a general contractor into an owner direct services business, and the market loved it right up until this summer. Then organic revenue went down mid single digits, EBITDA fell 30%, guidance came down from $90m to $80m, and the stock lost half its value. Yaron Naymark of 1 Main Capital pitched me this name in June 2023, watched it 6.5x, sold most of it, and is back buying it after a 75% drawdown. His argument is that the EBITDA decline is fixed cost deleverage on a demand air pocket, not a broken business, and that the bigger story is the one Limbach missed. While FIX and EME compounded on data centers, Limbach stayed singularly focused on owner direct work and ended up with effectively zero data center exposure. The CYMCOR acquisition announced alongside Q2 is the first real move to fix that. I push back on the bear case that management knowingly bid a pile of low margin work, on whether owner direct is just general contracting by another name, on whether wage inflation from the data center boom is quietly eating them, and on whether a 2016 de-SPAC ever escapes the gravity of $10 per share. We finish on how Yaron invests around AI without pretending to know who wins: Limbach, IWG, and why he re-initiated KKR. Yaron's first Limbach pitch, June 2023: https://www.youtube.com/watch?v=m7GzW0ahswg This episode is sponsored by Trata: https://www.trata.com/lmb . If you like this podcast, you are going to love Trata. It is two buysiders getting on the phone and talking through a stock they are both interested in, the reasons they want to get long, the reasons they are worried about it. They have a Limbach call from six months ago that holds up really well, and I asked one of its questions on this episode. Chapters: (00:00) Intro (00:56) Sponsor: Trata (01:50) Yaron Naymark, back for round six (03:09) What Limbach is and why he is double dipping (03:40) Enron, a SPAC, and the shift from general contracting to owner direct (06:32) Called a data center winner when management said otherwise (07:48) The air pocket: tariffs, Medicaid cuts, and paused projects (09:29) Why the stock is down 50% when EBITDA is down 30% (12:14) Organic versus headline revenue and the Pioneer Power deal (12:40) Double dipping on a stock you already made money on (16:57) The bear case: low margin bookings and general contracting by another name (22:31) Why FIX and EME ran and Limbach did not (24:42) Wage inflation, technicians, and whether owner direct contracts trap them (27:01) Did management get caught off guard between Q1 and Q2? (30:35) The $50m buyback nobody has touched (31:18) Why M&A beats buying back stock at six times EBITDA (33:55) The math behind a $200 three year price target (35:18) Could Limbach be the seller instead of the buyer? (38:09) Josh Horowitz, insider ownership, and the de-SPAC stigma (40:50) CYMCOR and the data center pull through (42:52) Investing around AI: Limbach, IWG, KKR, and the mega-alts (50:29) Wrap Yaron Naymark / 1 Main Capital: https://www.1maincapital.com Links: Yet Another Value Blog - https://www.yetanothervalueblog.com See our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer

August 30, 202652 min

$SEE.L: Europe just made this duopoly mandatory. Why is it 11x free cash flow? | Hugo Navarro

Every new car sold in Europe now has to watch the driver's face. Two companies in the world can actually do it, Seeing Machines and Smart Eye, and they spent twenty years and hundreds of millions of dollars getting there. Hugo Navarro's argument is that the market has not repriced what happens next: a roughly 55 million dollar fixed cost base, automotive production going from 488,000 vehicles in Q4 2025 to 2.1 million in Q4 2026, and 20 to 40 million of free cash flow in fiscal 2027 against a 330 million market cap. If Japan and the US follow with their own mandates, close to every incremental dollar of revenue drops straight to free cash flow. I push back hard in a few places. There is a 55 million dollar convertible due in October that this company has let get within two months of expiry, and my view is that no healthy business does that. Receivables are up 120% against 45% revenue growth. The fleet business, Guardian 3, is running trials that keep not converting, and "we are in a trucking recession" is the kind of management excuse I have learned to distrust. We also get into whether a new entrant can just build this now that the market is 16 million vehicles, why no tier one ever bought them, and whether full autonomy eventually kills the whole thesis. Hugo's write-up on Seeing Machines: https://smallcaptreasures.substack.com/p/a-cheap-tech-duopoly-posts-333-growth?r=1od1d5 This episode is sponsored by Fiscal.ai: https://fiscal.ai/yav . Fiscal.ai is the modern financial data provider for global equities, and I am a customer who pays with my own money for the API. Two things I use it for constantly: a huge database of fund letters wired into the API, so the first thing I do prepping for a podcast is pull every recent letter on the company, and audit-linked financials where every line in the model clicks through to the source. Use fiscal.ai/yav for 15% off their AI connector. Chapters: (0:00) The setup: a duopoly Europe just made mandatory (0:54) Sponsor: Fiscal.ai (2:49) Why Hugo kept pitching this one (3:56) What Seeing Machines does, and why DMS is harder than it looks (5:13) The math: fixed opex, Europe now, Japan and the US later (8:06) The seatbelt manufacturer analogy (10:25) My pushback: what stops a new entrant or an in-house build? (11:47) Naturalistic data, Mitsubishi Electric, and the accuracy gap (14:54) The elephant in the room: a $55m convertible due in October (17:46) Footnote 21 and the accelerated royalty payment (20:06) Can the regulation slip or get watered down? (22:00) Robotics: $20 of silicon versus $20,000 chips (24:39) Smart Eye versus Seeing Machines: software only or full system (27:38) Why no tier one ever bought them (29:16) Fleet: Guardian 3 and trials that keep not converting (35:04) The balance sheet: receivables up 120% (37:37) How much operating leverage is left in Europe alone (40:10) Does full autonomy kill the DMS story? (42:39) Chinese OEMs selling into Europe (44:14) Licensing the fleet software to telematics players (46:34) CEO incentives and the overpromising track record (48:30) My last pushback: at some point it is them, not you (50:14) Why the stock reacts slowly, and where the risk really sits Hugo Navarro / Undervalued and Undercovered: https://smallcaptreasures.substack.com/ Links: Yet Another Value Blog - https://www.yetanothervalueblog.com See our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer

August 27, 202625 min

Late August 2026 Random Ramblings

Rates just screamed to 20 year highs and stocks have barely blinked. That looks to me like the mirror image of the mid-2010s, when Treasuries yielded 2%, the math said stocks should trade for 25x, and they sat in the mid-teens instead because the equity risk premium quietly widened from 4% to 6%. If the premium can widen when rates fall, why would it not widen again when rates rise? That is the double whammy running in reverse: earnings that got a decade of help from the Trump tax cuts and the AI boom, multiplied by a multiple heading the wrong way. The other thing I cannot stop chewing on is what higher rates do to the AI data center buildout. These are 15 year leases where the NPV of the payments roughly covers the build cost, which means the developer is really underwriting the terminal value 15 to 25 years out. Move rates from 4% to 5% and you have to jack the lease rate up 5% to 10% just to stand still, and you discount that terminal value harder, right as the tenant credit gets scarier. If the AI trade cracks, you get hit twice: your tenant may not be around, and the release in year 15 goes from a $100m NOI lease to whatever the next best bidder pays. I do not think we are there yet, but finance 101 says investment gets crowded out eventually. Then two management questions. UWMC and Cogent both ran capital allocation that looked designed for the CEO's personal balance sheet rather than for shareholders, and I want a way to spot that before the blowup rather than after. And a friend's text about a CEO everyone was calling the next Mark Leonard got me wondering how you would ever know, because a real compounder and one great bet with hidden leverage look identical for the first ten years. I wrote the rates piece up this morning: https://www.yetanothervalueblog.com/p/rates-are-screaming-and-stocks-arent The UWMC post: https://www.yetanothervalueblog.com/p/uwmc-lost-600m-hedging-a-deal-theyd The Cogent episode with Aaron Chan: https://www.yetanothervalueblog.com/p/recurve-capitals-aaron-chan-on-cogent This episode is sponsored by Trata: https://trata.com . Trata is two buy siders talking to each other about a name they both follow closely. Trata records it, anonymizes it, and publishes it. It is the fastest way I know to get up to speed on something new. Chapters: (00:00) What is on my mind this month (01:07) Sponsor: Trata (01:41) Rates screamed higher and stocks did not listen (04:39) Should the equity risk premium rise with rates? (06:29) Rising rates meet the AI data center buildout (09:33) What a 15 year data center lease is really betting on (13:03) Does higher for longer start crowding out AI capex? (14:11) UWMC, Cogent, and CEOs who run capital allocation for themselves (18:45) How would you know if someone is the next Mark Leonard? (23:01) One great bet, or actual genius? (24:37) Wrapping up Links: Yet Another Value Blog - https://www.yetanothervalueblog.com See our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer

August 25, 202629 min

How to win a stock pitch competition | lessons from an Ira Sohn winner

School is starting, which means a dozen college and MBA teams are about to email me asking how to win their stock pitch competition. So I made the answer. The core of it: a pitch is a game, and most people lose it before they open their mouth by picking an idea that does not fit the contest rules or the judges in the room. From there it is three things. Design the pitch for the timeframe the contest actually asks for and for the people judging it, because what wins with a concentrated-book judge is not what wins with a pod shop. Lead with the one thing only you know, not a sell side price target or a multiple that has compressed. And make your bull case the base case instead of hedging yourself into a 15% price target that reads as average. Then the three traps I see every single year: burning five slides on a DCF nobody will ask about, drowning the room in risk factors, and death by background. I also walk through the La Quinta pitch that won me Ira Sohn in 2018, and why the CSL and DoorDash teams at the Pershing Square Challenge won on legwork rather than modeling. Fair warning: I had AI build the slides, so do not hold the exact wording on any of them against me. If you are pitching to get hired rather than to win a contest, the companion episode is here: https://www.yetanothervalueblog.com/p/how-to-get-a-job-in-investing-podcast This episode is sponsored by Trata: https://trata.com . Trata is two buysiders swapping thoughts on a stock they are both involved in. If you are prepping a pitch, go on and say you are thinking about pitching company XYZ, and they will find you someone to talk to about it. It is a very good way to hear the other side of your idea before a judge hands it to you. Chapters: (00:00) Why I made this one alone, with a deck (01:57) Disclaimer and a word from Trata (03:02) Why this matters even if you never enter a contest (05:20) Who am I to talk about stock pitches (07:18) Why a pitch is a free lottery ticket (08:51) Rule one: know the game you are playing (10:12) Know your judges: concentrated books, event funds, pod shops (12:19) Rule two: tell a story, and lead with something only you know (14:14) The La Quinta pitch that won Ira Sohn (16:07) Be bold: make your bull case the base case (18:04) Do the legwork: hard hats, expert calls, customer checks (21:43) What to avoid: excessive modeling (23:17) What to avoid: drowning in risks (25:08) What to avoid: death by background (26:22) Formatting is table stakes (27:48) Go win the thing Links: Yet Another Value Blog - https://www.yetanothervalueblog.com See our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer

August 20, 202649 min

$ELAL: El Al is a wartime monopoly at 2x EBITDA. Is that a trap? | ASB Partners

El Al ($ELAL), Israel's flag carrier, has spent three years as close to a monopoly on flying in and out of Ben Gurion as an airline ever gets. Turkish and Pegasus left and aren't coming back, Ryanair lost its Terminal 1 slots, Delta and United keep pushing their return, and El Al has used the windfall to go from a levered balance sheet to net cash, buy nine planes off lease, and start returning capital. It trades at about 2x EBITDA. Adam Buckstein of ASB Partners (back after his Stride episode) thinks you're buying a hard-asset-backed airline (roughly $1.3B net cash, $1B+ of owned planes, a $700M-ish loyalty program valuation) for less than the parts, with two more quarters of gushing profits still to come. My pushbacks: every "delevered on wartime profits" story I can remember (steel, energy after 2022) didn't work as a stock; a chunk of the cash is customer float that vanishes if flights get canceled; the $40M competition-authority fine for wartime pricing plus the state's right to make them fly uneconomically looks like the worst of both worlds; and El Al flies 24/6 (no Sabbath, no holidays), so should you haircut the EBITDA, or does that create a moat nobody else can copy? We close with a Stride ($LRN) update: the abrupt CEO exit, the Canvas LMS disaster, the lost Texas school, why fall enrollments are the fulcrum, and whether AI is a real threat to virtual public schools. Adam's El Al write-up: https://adambuckstein.substack.com/p/el-al-israel-airlines-ltd-elal-write This episode is sponsored by Fiscal.ai: https://fiscal.ai/yav . Fiscal.ai is the modern financial data provider for global equities, and it's what I actually use: their fund-letter database is wired into their API, so the first thing my AI does when I prep a podcast is pull every recent letter on the name, and every line in the models it builds links back to the source filing. Use fiscal.ai/yav for 15% off their AI connector. Chapters: (00:00) Intro and Fiscal.ai sponsor read (02:33) Adam Buckstein / ASB Partners joins (03:38) What is El Al: flag carrier, October 7, a monopoly on Ben Gurion (05:52) What the market is missing: underfollowed, delevered, Turkish and Ryanair gone (09:36) My pushback: delevering on wartime profits, and the customer-float problem (11:48) The balance sheet: $2B liquidity, air traffic liability, 2023 as the clean year (14:22) Valuation: net cash, owned planes, loyalty program vs a $2B EV (16:49) Slots: the New York City analogy for Tel Aviv (19:28) State of Israel risk: golden share, the $40M pricing fine, mandated security (24:23) The right comps: Wizz, Jet2, United at 6x vs El Al at 2x (26:12) Flying 24/6: should you haircut EBITDA, or is it a moat? (30:38) Stride ($LRN) update: the CEO exit and the prelim guide (34:01) Fall enrollments as the fulcrum, Canvas LMS, the lost Texas school (37:47) Pearson's read-through and in-year enrollment (40:16) The new CEO's contract and expert-call feedback on the old one (41:32) AI risk to virtual public schools, Alpha School (46:02) Long school choice; would Stride get taken private? (49:29) Disclaimer Links: Yet Another Value Blog - https://www.yetanothervalueblog.com See our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer

August 17, 202652 min

$NU: is Nubank Capital One in 1994 or Capital One in 2006? | Vanshap Capital

Nubank ($NU) has 140 million customers, roughly 60% of Brazil's adult population, an efficiency ratio around 20% versus 40-60% at the legacy banks, and ROEs in the 30s. Evan Vanderveer of Vanshap Capital has owned it for four years and thinks the market is still treating it like a risky EM bank instead of what he thinks it is: a tech company that happens to hold deposits, with a founder (David Vélez) who controls it and a runway that runs through Brazil's $100 billion banking profit pool, Mexico, Colombia, and eventually the US. My pushback is the Capital One question. Capital One was the smartest data-science lender in the room, IPO'd in 1994, went up 13x in 12 years, and then spent the next 20 as a mature bank that lagged the market. Nubank was built by ex-Capital One people, so is this 1994 or 2006? We also get into what the right cost of equity is for a Brazilian bank trading at high-teens earnings with a 30% ROE, whether MELI and Kaspi tell you EM fintech never gets a big multiple, the 13,000-customers-per-employee stat, Brazil NPLs at 15-year highs, the wave of senior departures, whether any banking fintech has ever expanded across borders, Vélez joining OpenAI's board, and my bigger worry that AI eventually commoditizes every financial product and competes away the 30% ROE. This episode is sponsored by Trata: https://trata.com/nu . Trata is two sharp buy-siders hopping on an anonymized call to talk through the risks and upside of a stock, and it's the closest thing to this podcast in written form. Go to trata.com/nu for a free Trata transcript on Nubank that I read and used heavily prepping for this call. Chapters: (00:00) Intro and Trata sponsor read (01:55) Evan Vanderveer / Vanshap Capital joins (02:50) What is Nubank: 140M customers, 60% of Brazil, 20% efficiency ratio (06:11) What the market is missing: deepening relationships, Mexico's ARPAC (08:05) The Capital One DNA: QED, Nigel Morris, data science (10:38) My pushback: is this Capital One in 2006, not 1994? (13:00) Brazil's $100B profit pool, payroll loans, David Vélez's control (15:09) Valuation: 30% ROE, high-teens P/E, and the right cost of equity for a Brazilian bank (18:47) MELI and Kaspi: does EM fintech ever earn alpha? (21:59) Fintech or bank? SoFi 2021, lending competition, too big to fail (23:55) 13,000 customers per employee vs 1,300 at legacy banks (26:15) Brazil risks: NPLs at 15-year highs, the Selic, October's election (27:45) How much of the value is Brazil vs Mexico, Colombia, and the US (29:42) Can a banking fintech expand across borders? The Citibank precedent (31:03) Senior departures, the new CFO from Visa, capping US investment (33:47) Buybacks in the low $12s and the risk of losing local expertise (36:32) Valuation bet, business bet, or jockey bet? (38:52) David Vélez joining OpenAI's board (40:46) AI inside Nubank: 60% of inquiries, Devin agents, faster credit models (42:44) Does AI commoditize banking and compete away the 30% ROE? (46:54) The US expansion: God kings or a real niche? (50:35) Closing thoughts (52:07) Disclaimer Links: Yet Another Value Blog - https://www.yetanothervalueblog.com See our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer Production and editing by The Podcast Consultant - https://thepodcastconsultant.com/

August 14, 202647 min

$DNOW: the boring distributor that could double on 2029 numbers | Firebird Management

DNOW spun out of National Oilwell Varco at $35 in late 2014. A year later it was $13. Today it is around $16. Steve Gorelik's argument is that ten years of that chart is one long headwind rather than a broken business: 1,800 US rigs at the spin, under 600 now, global oil and gas investment 40% below 2014 in real dollars, and DNOW still grew margins and bought companies at 4 to 5x EBITDA the whole way through. Rigs have started ticking back up. The MRC Global merger brings $75m of synergies to two businesses that earned $325m of EBITDA apart in 2024. Management has soft-targeted $350m of EBITDA for 2027 against roughly a $3.5B enterprise value, which Steve gets to about $300m of free cash flow on a $3B market cap. My pushback is that 10x is not deep value, and the double comes almost entirely from multiple expansion back to the 5 to 6% free cash flow yield the market used to pay. Why is 10x the wrong number and not 12 or 14? We also get into the acquisitive compounder paradox, whether the incremental drilling actually shows up in US shale or somewhere else, the Oracle implementation they inherited from MRC and why they are now running it alongside SAP on purpose, the $50m of stock they bought back in the middle of that mess, and whether a business private equity would happily lever to four or six turns belongs in the public market at all. Steve's 2029 case is $30 to $32 per share. This episode is sponsored by Fiscal.ai: https://fiscal.ai/yav . I am a customer and I pay for their API with my own money. Two things I use it for constantly. First, they have a huge database of fund letters wired into the API, so when I am prepping a podcast or looking at an event my agent pulls every recent letter on the name and tells me what the bull and bear cases actually are. Second, financials with sourcing attached: I ask for a model and every line links back to the company specific KPI, segment, or ratio it came from, so I can click through and see exactly where the number is from. Use my link, fiscal.ai/yav , for 15% off their AI connector. Chapters: (00:00) Nobody gets excited about a distributor (03:48) What DNOW actually sells (05:29) The roll-up playbook, without the leverage (07:13) Why the 2014 spin never worked (12:47) My pushback: does the drilling come back in the US? (14:23) Shale payback periods and rigs getting less efficient (16:50) The MRC Global deal (18:04) Upstream plus downstream: what the combination buys you (21:24) The ERP implementation they inherited (24:39) Why 2027 guidance sits below what the two did apart (28:16) Free cash flow yield as the North Star (32:40) Buying growth at 4 to 5x while trading at 8 or 9 (34:42) Paying down debt and buying back stock at the same time (35:38) $50m of buybacks in the middle of the mess (37:15) Running SAP and Oracle side by side on purpose (39:49) 1,907 rigs at the spin, 571 today (40:40) The 2029 case: $30 to $32 per share (41:01) Should this company even be public? (42:56) Would private equity lever it up? (43:31) Water, utilities and data centers (45:21) Why boring distributors compound Steve Gorelik / Firebird Management: https://fbird.com Links: Yet Another Value Blog - https://www.yetanothervalueblog.com See our legal disclaimer here: https://www.yetanothervalueblog.com/p/legal-and-disclaimer Production and editing by The Podcast Consultant - https://thepodcastconsultant.com/