Deep Value Digest

Ryan Messick. I analyze value stocks using classic fundamentals.

[Deep Value Digest @DeepValueDigest]

$ONON is down 12% today on a leadership shakeup. I recently opened my position, and today I'm buying more.

The market hates the shakeup, but here's why I think it's actually a good development that leans into On's competitive advantages. 🧵

[Deep Value Digest @DeepValueDigest]

I'll probably write up an analysis tonight for Seeking Alpha since my analysis when I bought at $15.40 11/20/23 was there and I feel a responsibility to make sure those readers get an update, then I may do a case study on it at Deep Value Digest.

[Deep Value Digest @DeepValueDigest]

I sold all my $SILC this morning at $38.50. I was disappointed by the filing to issue new shares & the sell off before the filing certainly feels like insider trades. No accompanying press release to justify the decision, so a lot more negative interpretations than positive.

[Deep Value Digest @DeepValueDigest]

The market is now pricing a 75% chance of a rate hike by October and a 0% chance of rates being lower by then. It's hard to see a path to cuts that quickly, and 75/25 hike/pause seems about right to me.

What a wild mispricing though a couple months ago. I thought that was pretty clear at the time.

[Deep Value Digest @DeepValueDigest]

I don't trade rates, it's not my game. But if it were, I'd be fading that October pause number. A 14% probability of the rate changing by October feels way too low, given everything going on in the world right now.

Geopolitical volatility means Fed rate volatility.

[Deep Value Digest @DeepValueDigest]

We're in a "buy the rumor, sell the news," situation on marijuana stocks after official reclassification to schedule III today.

This restores proper tax treatment to $GTBIF and others, which should triple or quadruple GTBIF's earnings.

My analysis from a few months back still holds 👇

[Deep Value Digest @DeepValueDigest]

This is one of the more interesting opportunities I've seen. Effectively trading at 12-16x forward earnings and 2.1x TBV despite a revenue CAGR of 39% over the last five years.

#valueinvesting #deepvalue #investing

https://t.co/WadetTfIGF

[Deep Value Digest @DeepValueDigest]

To make sure you don't miss any of the stocks I actually put my own money into, be sure to check out Deep Value Digest!

https://t.co/g94pLQB6bo

- @deepvaluedigest

[Deep Value Digest @DeepValueDigest]

The S&P 500 is at all-time highs despite...

The Strait of Hormuz remaining closed.

High tariffs supposedly returning in July.

Consumer sentiment near 50-year lows in the UMich survey...

That seems crazy, so it's a good time to hunt for value wherever it can be found... 🧵

[Deep Value Digest @DeepValueDigest]

After reading their filings, press releases, articles & analysis, I'll end up with a handful worthy of investment... And those will all be on Deep Value Digest.

In the meantime I'll share the ones I'm weeding out for one reason or another. Maybe my near miss is your treasure!

[Deep Value Digest @DeepValueDigest]

@SuzanneOKeeffe Lazy officiating lol... But it was entertaining to watch them try to fit 6 and 5 in the penalty boxes.

[Deep Value Digest @DeepValueDigest]

I've watched a lot of hockey in my life, but I've definitely never seen 10 players in the penalty boxes at once.

#Flyers #Penguins

[Deep Value Digest @DeepValueDigest]

I've had some terrible experiences with Spirit personally, and as a business they've been losing money since 2019. Some of the headaches are not bad if you're flying on a relatively short flight with no connections and you leave early in the day.

Jet Blue is a NY company so I don't think it had anything to do with partisan politics in that regard; I think it was either a poorly thought out attempt to protect budget consumers or a corrupt attempt to protect bigger airlines (they got donations from the bigger airlines and not from JetBlue).

I'm in favor of competition in the markets, but obviously if the budget airline fails, then blocking the merger was a bad strategy by the Biden Administration.

I just see this as back-to-back administrations handling the situation poorly in economic terms. As a broader issue, companies that lose money for too long *should* fail and competitors who are running their business better *should* be able to either gain market share or buy their competition, within reason.

Obviously there needs to be some antitrust protection, but JetBlue is a sub-$2B company. Delta is a $45B company. Who was really being protected here?

[Deep Value Digest @DeepValueDigest]

We've got to start letting poorly run companies die of self-inflicted wounds. Spirit holds 3.5% of domestic market share, they're a nightmare to fly with & they only employ about 10,000 people - many of whom would probably catch on with competitors who pay more.

$FLYYQ

[Brian Schwartz @schwartzbWSJ]

SCOOP: The Trump administration and Spirit Airlines are nearing a deal where the U.S. government would put up to $500 million into Spirit Airlines stock warrants to try to save the company, leading to a potential significant stake in the company.

Team effort w/ @alyrose and @AndrewScurria

https://t.co/qbkoH5Ur3G

[Deep Value Digest @DeepValueDigest]

👀👀👀

[Deep Value Digest @DeepValueDigest]

I think Trump firing Bondi is bullish for $GTBIF, she had a very anti-marijuana track record & may have been slow walking rescheduling. Blanche has no record either way on cannabis. Zeldin has a weird record on it, voting for and against at various times.

My analysis in Dec 👇

[Deep Value Digest @DeepValueDigest]

It's unclear whether President Trump has been exaggerating, the Iranian FM spokesperson is speaking out of turn, or Iran is moving the goalposts, but there's some uncertainty over this deal.

[OSINTtechnical @Osinttechnical]

Iranian state broadcaster IRIB, quoting a Foreign Ministry spokesman: The option of transferring Iran's enriched uranium abroad is rejected

[Noam Raydan @NoamRaydan]

Update: looks like a few of the ships that were seen moving today in clear attempt to test exits via Hormuz made U-turns, so far. I have two examples to share: Bulkers Yasa Moon (IMO 1014656) and Richsing Lotus (IMO 9209520). See below. Situation unclear at all with respect to transit today. Review my quoted thread.
#Shipping #OOTT #IranWar‌

[HFI Research @HFI_Research]

Now the US Navy is saying to avoid area.

I mean, seriously, wtf?

[Deep Value Digest @DeepValueDigest]

My read is that there will be tolls, and obviously we should all be watching the traffic closely the next few days.

[Rory Johnston @Rory_Johnston]

BBG: "Bloomberg spoke to over a dozen ship owners, agents, brokers and traders, most of whom asked not to be identified discussing private deliberations. The majority said Iran’s statement lacked detail, and that they would wait and see how it works out in practice. People familiar with the thinking of some large producers in the region also expressed caution."

[Deep Value Digest @DeepValueDigest]

Is Iran going to accept this as the ceasefire they were demanding to continue talks?

[Open Source Intel @Osint613]

Netanyahu says he rejected Hezbollah's demands for a full Israeli withdrawal from Lebanon and a "quiet for quiet" ceasefire.

The new ceasefire will follow the November 2024 model: IDF remains in Lebanon, Israel continues to strike Hezbollah.