Thursday, January 23rd, Spruce Point Capital Management will issue a unique and new forensic research report on a multi-billion dollar company. Founder and CIO Ben Axler will discuss the idea live on The Exchange on CNBC at 1pm EST. In the 15 years since issuing our first “Strong Sell” opinion, we have repeatedly raised the red flag when we come across companies that are experiencing rapid share price outperformance in brutally competitive, commodity-like industries.
Read hedge fund letters here
A good story stock often becomes a momentum stock and then a musical chairs stock once the party ends. Candidly, throwing cold water on a stock parade has also become harder since we first started writing critical reports. To have an edge these days against an AI-trained quantum computing super investor, you really need public insights and information not easily accessible.
Our favorite research angle is writing letters to government agencies through Freedom of Information Act (FOIA) requests. Every once in a while, you strike gold and all it takes is frequent follow up to make sure that government is working for you. But, you have to know which doors to knock on. In this case, we knocked on the doors to provide us with unique insights into two of the company’s top five customers, including its top and most material customer.
We will show with documentary evidence why we believe the market is misestimating and misvaluing the sustainability and quality of the company’s revenue trajectory. This story becomes all-the-more interesting when you consider that the company recently expanded its balance sheet, placing it at the top of the pyramid in terms of financial leverage in its industry. Leverage works wonders when things are great but can be disastrous when missteps occur. As a result, we believe the company has to execute perfectly to sustain its industry leading valuation and we will provide evidence why we believe their execution is anything but perfect.
Download and view the report, disclaimers, additional information, and exclusive updates by visiting www.sprucepointcap.com.
About Spruce Point
Spruce Point Capital Management, LLC is a forensic fundamentally-oriented investment manager that focuses on short-selling, value and special situation investment opportunities.
