Hi reader,

This is the first article of the company that I added most recently to my portfolio. The company belongs to an industry that I did not have exposure to, and I believe it complies with the most important characteristic of any investment: a low probability of permanent capital loss, coupled with a decent probability of enjoying a handsome return.

The name and the detailed research is reserved for paid subscribers, but I thought it would be a good idea to share the brief investment thesis for everyone. Here it is…

• The company owns excellent assets, some of which remain highly undervalued by the market. The nature of these assets (together with how the market values them) provide a more-than-adequate protection against permanent loss of capital (which is what an investor should always try to minimize). They also provide a good source of optionality.

• Much of that optionality and some of these assets can be ignored altogether and the path to a decent return is still credible.

• The company operates in attractive markets and has a management team with an excellent capital allocation track record. There is plenty of history to study this track record, despite the company pivoting several times over its long history.

• The company is still owned and managed by the founding family (they own about 30% of the outstanding shares). Their interests are clearly aligned with those of the shareholders, which is always important, but probably more so given the industries in which they operate.

• As a family-owned company with high insider ownership, it is focused on durability, thus further protecting against permanent capital loss.

• The company is currently significantly undervalued (in my view), and the management team is focused (among other things) on closing the current valuation gap.

• The accounting in no way reflects the real value of the company, something that gives an advantage to those investors willing to “get their hands dirty.” In a few words: the company screens poorly.

• Something that is not important (but noteworthy) is that this is a small company (capitalization less than $1 billion) and therefore “out of reach” of many large funds.

In this first article I’ll discuss several topics:

1. The long history of the company

2. What it does

3. Its financials

4. The growth drivers

If you want to read the remainder of the article, feel free to join Best Anchor Stocks. I am also planning on releasing a free article around next week that might interest you, so consider subscribing for free if you want to receive it in your inbox.

Have a great day!