💼 THP 03/25: A Game-Changing Find + Q1 Breakdown
At Last - We Found an Exceptionally Well-Run Company that's Incredibly Mispriced
Welcome back dear fellow 🧙♂️ Hermits 👋
ICYMI:
💼 The Hermit Portfolio: February (previous) Update
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Index
Briefing
This tenth installment is packed with content, covering a major purchase, a quarterly review, our ongoing hunt for interesting companies in Spain and Ireland, and a few key tips on fine-tuning quantitative screeners.
Firstly, as we do every quarter, we’ll take a step back to assess the overall state of our portfolio. This time, though, the focus will be more on the big-picture overview rather than diving deep into margins and ROICs.
Secondly, we’ll dive into our (somewhat chaotic) adventures on Irish soil, along with a few companies that have caught our attention. Don’t worry, we’ll spare you the duds and focus on the standouts.
We’ll also touch on how we’re gearing up for our upcoming meetings in April and May.
Thirdly, we will thoroughly discuss our first executable big find of 2025, a pick we made with strong conviction. Management has a solid track record, having successfully executed three nearly identical (smaller scale) projects with annualized returns of 135%, 125%, and 35%, respectively.
We loaded up on shares the same day we spoke with the CFO. The company holds a significant amount of off-the-books assets, which they’re prudently guiding on, and the exit strategy is as straightforward as it gets:
Either we collect massive dividends (300%+ yield) from a special payout, or
The company gets acquired by a big player for 4-5 times its current price
Either way, the result gives us a direct cash exit. While this likely won’t play out until 2027-2029, we see one of these two outcomes as inevitable.
Fourthly, we had to be more active than usual this month on the trading front.
Initially, we focused on trimming down a few positions where we had gone a little overboard. But as the month progressed, this became a strategic effort to free up cash, and we carefully traded our way out of a sizable negative cash position and added a few shares in existing and new holdings.
Lastly, we’ll share a few tips on how to calibrate your quantitative screeners and refine the process of identifying the kinds of opportunities we love to pursue.
Please note that this portfolio faithfully reflects the author’s personal seven-figure investment portfolio.
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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.
