Deep Dives, Special Situations, Generals and Workouts

Generals and Workouts

Deep Dives, Special Situations

Deep dives on net-nets, special situations and other mispriced opportunities in the stock market.

Equity Bottom-Up

Cytec Industries Inc. delivers specialty material and chemical technologies beyond our customers' imagination. The Company focuses on innovation, advanced technology, and application expertise to develop, manufacture and sell products. Cytec's products serve a diverse range of end markets including aerospace and industrial materials, mining and plastics.

<ul><li>When it comes to investing, an important skill is what poker players call game selection.</li><li>In the poker world, it means finding the right opponents to play against.</li><li>In the investing context, it’s what Charlie Munger is referring to when he says “fish where the fish are”.</li></ul>

When it comes to investing, an important skill is what poker players call game selection.In the poker world, it means finding the right opponents to play against.In the investing context, it’s what Charlie Munger is referring to when he says “fish where the fish are”.

CEL Corporation offers homebuilding services. The Company provides land use consultancy, architectural and civil engineering design, building renovation and maintenance, apartment management, and other services. CEL also offers real estate sales, property management, and other services.

<ul><li>The cash comes from a one-off asset sale. CEL hasn’t been building cash on the balance sheet for years. While management has no intention of paying out the cash at present, they plan to use it for acquisitions. It won’t stay on the balance sheet for ever.</li><li>CEL’s operating business is not a great business, but it’s not terrible either. CEL earned an average of 15% pretax on capital employed over the last three years (FY20-FY22). The operating business earns above its cost of capital, is consistently profitable and ~40% of earnings are paid out as dividends.</li><li>Management has a lot of skin in the game. CEL’s founder and president, Masatsugu Shinno, owns 60% of the company, which aligns his interests with shareholders.</li></ul>

The cash comes from a one-off asset sale. CEL hasn’t been building cash on the balance sheet for years. While management has no intention of paying out the cash at present, they plan to use it for acquisitions. It won’t stay on the balance sheet for ever.CEL’s operating business is not a great business, but it’s not terrible either. CEL earned an average of 15% pretax on capital employed over the last three years (FY20-FY22). The operating business earns above its cost of capital, is consistently profitable and ~40% of earnings are paid out as dividends.Management has a lot of skin in the game. CEL’s founder and president, Masatsugu Shinno, owns 60% of the company, which aligns his interests with shareholders.

A Profitable Japanese Microcap Trading at a 53% Discount to NCAV.

Generals and Workouts
Deep Dives, Special Situations

The curious case of Cyteir Therapeutics

When it comes to investing, an important skill is what poker players call game selection. In the poker world, it means finding the right opponents...

Generals and Workouts

A Profitable Japanese Microcap Trading at a 53% Discount to NCAV.

My deep dive on CEL Corporation (5078.T). While management has no intention of paying out the cash at present, they plan to use it for acquisitions.

Generals and Workouts