Mid-June Portfolio Review
An overview of active Idea Hive portfolio positions
In this newsletter, I share summaries of attractive investment ideas sourced from the Value Investors Club and incorporated into my personal portfolio. These summaries will be complemented by regular updates on key developments impacting investment theses. My aim with Idea Hive is to document my portfolio management process while enabling readers to quickly grasp and follow attractive investment opportunities.
With the first month of the upgraded Idea Hive in the books, I am sharing the first portfolio review. This post provides an overview of the Idea Hive portfolio, with key information on each position, including elevator pitch and performance so far. Portfolio review posts will also feature key updates on each portfolio name. You can expect to receive these posts regularly, i.e., once every 2-4 weeks.
Now, onto the portfolio review.
Portfolio Review
Here’s the Idea Hive portfolio as of June 19:
Most portfolio names are hovering around the entry price levels. This is unsurprising, given the lack of any thesis-impacting updates over the last month. The standout, and the best performer so far, is Sun Corporation, which is up 12% in less than three weeks (for hedged positions).
Recent Portfolio Idea Updates
Below is a list with recent updates for active Idea Hive portfolio positions.
Sun Corporation (6736.T)
There have been several recent developments at Sun Corporation, including the release of a new investor presentation by Sun’s management and Leopard Activist Management urging equity holders to vote against the incumbent management during the upcoming AGM. Most importantly, however, another party, True Wind Capital, has recently entered the field, launching a tender offer for up to 19% of Sun Corporation’s outstanding shares at ¥4400 per share. Sun’s shares have jumped substantially since the announcement and are currently trading slightly above the tender offer price. I have recently published a more detailed post with my thoughts on these developments.
Enav (ENAV.MI)
Just noting the recent insider buying from Enav’s CEO who purchased 80k shares at an average price of €3.7/share.
Summit Midstream Partners (SMLP)
SMLP has recently released several filings related to the planned C-Corp conversion, including a proxy, press release and investor presentation. The shareholders are set to vote on the conversion on July 18 and the reorganization is expected to be completed in H2’24. Management has provided additional color on the strategic rationale of the conversion, highlighting the volume/valuation uplift in precedent C-Corp conversion cases and the tax benefits. Despite the looming near-term catalyst, SMLP shares have barely budged since the release of the proxy/presentation/press release, and the company remains cheap, trading at only 6.4x 2024E EBITDA vs 8x+ peer multiples. Interestingly, in the "Risk Factors" section of the proxy, SMLP mentioned that it has been in discussions with other parties regarding “a range of strategic alternatives,” including a transaction whereby “the potential counterparty would acquire control of the Partnership.” I have recently published several posts on SMLP, discussing these developments in more detail, including the potential takeover interest (here) and the planned C-Corp conversion (here).
Pioneer Power Solutions (PPSI)
Over the last couple of weeks, PPSI announced several large orders for its e-Boost product. Management now expects to exceed the previous FY24 guidance of $10 million in revenue from its mobile off-grid charging solutions segment. This suggests that the company’s second-largest product line and related services are expected to grow rapidly.
On the mildly negative side, in early June, the company announced that its financial statements published since Q1’22 contained revenue and cost recognition errors. While it is difficult to draw any firm conclusions at the moment, my understanding is that the restatement will simply redistribute revenues and costs across different periods.
I have discussed these recent updates on PPSI in more detail in my post last week.
Full List of Active Portfolio Ideas
Sun Corporation (6736.T) — initial post here, last update here
Amplify Energy (AMPY) — initial post here
Aecon Group (ARE.TO) — initial post here
Enav (ENAV.MI) — initial post here
MGP Ingredients (MGPI) — initial post here
Pioneer Power Solutions (PPSI) — initial post here, last update here
Summit Midstream Partners (SMLP) — initial post here, last update here
SunOpta (STKL) — initial post here
Idea Hive, I'm really impressed by what you are doing. It's super helpful and digestible - thank you!