The Rockvue Capital paper fund returned 6.08% during the 2Q 2019, outpacing the S&P 500 by over 300bps. Year to date, the Fund has returned 22.70% compared to the S&P 500 return of 16.54%. I stress that any short-term performance be taken with a grain of salt, as the Fund should stand on its five-year … Continue reading 2Q 2019 Letter
Butler National Corp (BUKS) is a micro-cap company ($25M market cap) operating two very different businesses: Aerospace / Avionics and Casino Gaming Management. Both businesses generate healthy cashflows and shares are currently trading less than 6x next years earnings. Furthermore, we believe current share prices offer investors a chance to buy the Aerospace business for 10x 2019 … Continue reading Butler National Corp (BUKS): Two Good Businesses & Lots of Hair
**As you may know, like Batman, I lead a double-life. Let me explain. I write for this blog but am also the value investing writer for Macro-Ops.com. Below is my latest post from Macro-Ops. Check out the original here: https://macro-ops.com/arlington-value-investor-letters-five-invaluable-lessons-on-value-investing/** There aren’t many investors compounding capital at double digits over the course of decades and … Continue reading Arlington Value Investors Letters: Five Invaluable Lessons
Corteva, Inc. (CTVA) is a leader in global seed and crop protection products. The company provides farmers with the right mix of seeds, crop protection and digital solutions to maximize yields and increase profitability. Their mission is to ensure an abundant food supply for the growing global population. Corteva is going public on Monday, June … Continue reading Corteva (CTVA): Valuing The Seed & Crop Protector As It Rings The Bell
Valuation is a vital step in the process of investment analysis. Without proper valuation work, an investor cannot fully gauge the validity of their ideas. There are various tools investors have at their disposal in order to value companies, such as multiple valuation (EV/EBITDA), net asset value, sum-of-the-parts (SOTP), discounted cash flow (DCF), book value, … Continue reading When Models Fail: How Financial Models Subsidize Poor Valuation Work (TSLA & Ark Invest)
America is known for apple pie, baseball and guns (to name a few). Starting at the A's in my list of OTC stocks I stumbled upon Ammo, Inc. (POWW). The company produces high performance, precision ammunition for rifles and handguns. The stock is tiny ($100M market cap) and very illiquid (trading volume averages less than 5,000 shares … Continue reading Ammo, Inc. (POWW): A Little Firepower to Your Portfolio
Tremendous piece from Travis on ‘What Makes a Great Business’.
This is a MUST read for any investor.
A great business is like a great money manager. They take money in, invest it, and turn it into more money. In the case of a company, it can invest its money into manufacturing plants, marketing, hiring employees, or a variety of other things. If those investments return more money than they cost, the company’s value increases. If investments return less money than they cost, the value of the company decreases. Thus, building a successful business can be boiled down to investing money at high rates of return.
But there are only so many high return investments that a business can make. Just as finding undervalued investments became more difficult for Warren Buffett as Berkshire Hathaway grew, traditional businesses can only invest their capital at high rates for so long.
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