Below is a brief excerpt from our Q2 2025 issue of Hidden Value Stocks, Read the full Hidden Value Stocks Q2 2025 Issue here.
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Judson Traphagen holds a B.A. in History from Denison University and an MBA from Columbia Business School. Right after college, he began working for former Goldman Sachs investment banker Paul Kazarian at Japonica Partners.
“I was the lowest man on the totem pole in a very small firm, but I was lucky to be part of an extraordinary deal: we acquired bankrupt Allegheny International out of Chapter 11, with backing from Michael Steinhardt and Michael Price,” Traphagen said. “All of the Japonica employees went to work at what was re-named Sunbeam-Oster. We worked 100 hours a week for years turning around the company.“
He did everything from preparing all the spreadsheets and board presentations to making the coffee for those board meetings and sleeping on the floors of manufacturing facilities in rural Mississippi.
“It was an incredible opportunity for a young guy out of college; I learned a ton, and not just about finance. I learned the value of hard work, sacrifice, having a positive attitude and the importance of flawless execution,” Traphagen added. “We eventually took the company public, generating extraordinary returns for Steinhardt and Price.” There’s a great HBS case study on the deal.”
He said that experience toughened him up to work for his next challenging boss: his father, Ross Traphagen Jr.
“Upon leaving Japonica, I helped set up and run his family office,” Traphagen said.” “He had been a Goldman Sachs partner in investment banking.”
He said they operated like most family offices, except they did more direct private equity investments while also managing a public portfolio, picking individual stocks much like a large personal account.
“For better or worse, I made all the amateur mistakes on my own dime before starting to manage OPM,” he added.
Traphagen also serves on the boards and investment committees of the Eaglebrook School and the TEAK Fellowship.
Background on Plough Penny Partners
Traphagen is a long-biased, fundamental growth investor who prefers to target long holding periods of three to five years and keep a concentrated portfolio of 10 to 20 long positions and opportunistic shorts. He employs this approach at Plough Penny Partners, holding the vast majority of his liquid assets in the fund and with no new investments outside the fund.
Plough Penny Partners is a long-term-oriented investment firm that focuses on high-growth technology companies. The firm invests globally in internet, software and fintech companies, utilizing a rigorous fundamental research-driven approach and is market-cap agnostic. Plough Penny targets superior returns over multiple years via concentrated investments in market-defining companies with exceptional management.
Traphagen named his firm Plough Penny Partners after his childhood home in rural New Jersey, a slightly rundown and faded Georgian home called Plough Penny Hill. When the home was built in the 1800s, the builders unearthed a chest of New Jersey state coins called plough pennies, which are widely available on the internet today. The home’s previous owners named it after the New Jersey state coin, although it was torn down many years ago.
Getting into fund management
Traphagen has long been interested in stocks and investing, and he always knew he would eventually work for himself. He started working in the mailroom at Goldman Sachs when he was 14 years old and began subscribing to The Wall Street Journal as a teenager. “My dad was a very smart and successful man, but didn’t have the highest EQ,” Traphagen explained. ”I don’t think he knew what to talk about with a kid, so we bonded over talking about stocks and business.”
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Read the full Hidden Value Stocks Q2 2025 Issue here.
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“I rented desks to a group of other sharp investors — we would have lunch together and talk about what everyone was working on- an idea I stole from Richard Rainwater,” Traphagen added. “Today, the firm is lean and focused: it's me, a very smart senior analyst I’ve known for a decade, an outsourced research team in India, and a part-time virtual admin. We currently work out of WeWork in Midtown NYC.”
Advice and inspiration
When getting into fund management, the best advice Traphagen received was to keep his operating costs variable and low and not to scale up expenses in anticipation of raising AUM.
“Don’t listen to LPs who tell you to spend money on infrastructure and a team,” he added. “Keep your LP base diversified. Try not to take ‘hot’ money. Of course, realistically, no fund turns away an LP to adhere to the last two points. Don’t let marketing distract you from managing your portfolio.”
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Traphagen and his team generated a hefty 51% gross return for 2024 and now is up 1% year to date as of March 24.
“We have been lucky this year; in January 2025 we felt the market was overvalued and speculative activity was rampant,” he said. “We dialed down exposure dramatically before this year’s correction.” Plough Penny’s top long positions currently are....
Read the full Hidden Value Stocks Q2 2025 Issue here.
Introduction to Alyx Wood and Kernow Asset Management
Alyx Wood and Edward Hugo co-founded Kernow Asset Management in 2019. Wood serves as chief investment officer, while Hugo is the CEO. He named the firm Kernow because it means “Cornwall” in the old Celtic Cornish language, and Wood has a family home in Cornwall, which he says is his favorite place in the world.
Wood grew up in West Sussex, U.K., the oldest of four children in what he describes as a “very lucky upbringing.” His father is a chartered accountant and teaches accounting, so numbers have always been easy and natural for him.
Wood majored in economics at university and secured a graduate job in London. Wood has been investing since he was 15, and he also met a KPMG partner when he was young, so a career in asset management just made sense.
Kernow’s strategy
The Kernow team utilizes a long/ short equity strategy, seeking to capture contrarian alpha from U.K. equities by using fundamental analysis paired with catalyst-driven mean reversion investments. According to Wood, the result is a concentrated and directional portfolio of “hidden quality longs and forensic accounting shorts.”
“Our strategy aims to find mispriced U.K. equities and trade them as they pass back through their fundamental equilibrium over time,” he explained. “We operate in the widening market gap between short-term quant-orientated traders and closet indexers.”
When prioritizing his investment strategy, Wood looks to work out what the market inefficiencies are and how they work and are closed. He aims to be part of the price discovery and market pricing, with the goal of being paid by the market for that service. In developing his strategy, Wood considers how that edge will be sustained and how he will be better than anyone else in that niche area.
He assembled his team by asking the “best and hungriest” people he knew if they “would like to do something truly amazing with their lives.”
Best long
When asked about his best or most memorable investments, Wood said Games Workshop was “the one that made all the others possible,” adding that it did 42x for him at a full conviction weighting.
Describing the company as “the largest and the most successful tabletop fantasy and futuristic battle-games country in the world,” he said the “original investor perception” was “an unreliable dividend, eccentric management and no growth.”
However, Wood found several reasons to invest, including great intellectual property and culture. The company also owns all its sites, has no debt and is fully vertically integrated. Further, Wood said Games Workshop has the correct dividend strategy, meaning all dividends are special, and has 40% internal rates of return and 40% return on equity. He added that the company is a scalable proposition and has a game-changing new CEO at the time of investment in 2015.
Read the full Hidden Value Stocks Q2 2025 Issue here.
Best short
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For the love of investing
Outside the world of finance, Wood says he is inspired by Bernard Matissier, a French sailor who sailed solo around the world faster than anyone else. However, when he came to the finish line, he didn’t dock and capture the fame and fortune of winning the race. He continued to sail for three more months — just because he loved to sail and didn’t want to commercialize it.
Kernow’s top long positions currently are....
Read the full Hidden Value Stocks Q2 2025 Issue here.
