Unlocking Hidden Value: I like this company a lot. They have a ton of working capital on their balance sheet. A few hard assets that are worth close to the value of the entire company. In addition costs will come down as lower costs inventory starts to get sold. There are also a few other hidden catalysts that could get the attention of more investors.

Top 60 Books Ever: Over the years, I have carefully compiled a curated list of the best books that have captivated me across various domains. From the world of investing and business to the realms of life, accounting, and philosophy, these books have left a lasting impact on my perspective and understanding of the world.

Driller Day: Good morning everyone. Today we are going to chat briefly on why offshore drillers moved so rapidly yesterday. But before we get into the good stuff, first a word from today’s sponsor… A Banksy got everyday investors 32% returns? Mm-hmm, sure. So, what’s the catch?

Cheap Stock Idea: This is one of my new favorite positions. The company is illiquid as they come. The equity is cheap. Compared to more well known peers the valuation is at a big discount. And there is a clear catalyst over the next few months that could significantly re-rate the stock.

Speculative Position : I put on a very small speculative position this morning. I have never invested in this industry ever. But after doing a few hours of due diligence and the trends I am seeing in the market, I think this could be a quick flip. The industry appears to be at a cycle bottom and with a few industry wide catalysts over the near-term, there could be real operating leverage.

Offshore Drillers: If you have been following Grit Alpha for the past year you should know that the offshore drilling industry is one of my favorite undervalued industries. The thesis is simple: offshore drillers are trading well below replacement cost and the economics to operate a drillship is rapidly improving.

Restructuring Idea: I love obscure stock ideas that Wall Street (mainstream investors) are not talking about. Small issues that are bombed out. Industries that are not the talk of the cocktail party. Shunned and beaten down. One of my favorite places to find these obscure stock ideas are in the bankrupt and restructuring space.

Easy Double: This is a pretty interesting situation that could quickly double with minimal risk given the strong balance sheet, ability to generate free cash flow and special situation that will allow investors the trade the name for the first time in years. With all of the assets on the balance sheet, including a huge cash position, owned equipment, a pile of accounts receivable, owned inventory and the only liabilities a few payables, the company is your typical Ben Graham, net-net, that is so

Russell Rebalancing (real list): My apologizes. I sent out the list from 2022 on an accident. Here is the list from 2023 of companies getting deleted. The 2022 post will be deleted from the website. Sorry for spamming your email. Every year the Russell 3000 rebalances the index. This means a bunch of stocks will be added to the index and others will be kicked out.

Russell Rebalancing: Every year the Russell 3000 rebalances the index. This means a bunch of stocks will be added to the index and others will be kicked out. The day stocks are added to the Russell they get upward pressure as the index buys the shares required to be added to the index.

Juicy Spread: On June 1st, 2023, I wrote up a merger arbitrage idea that had a juicy 9.0% spread to the acquisition price. The company in question was a pink sheet illiquid shitco with a market cap under $7 million. If the deal to be acquired was approved, investors were locking in a quick 9% return in short order. A crazy high return if you annualize it.

Housing Crisis?: I’ve been scratching my head for the past six months. Interest rates have skyrocketed upward resulting in everyone’s cost of capital increasing. Common sense would imply a downward reversion of housing prices. But we have seen the complete opposite. Housing prices across the board have increased despite the rather sharp increase in housing prices.

Equity Raise: Over the weekend and on Monday I continued to dig into a small little manufacturer that has become a larger position in my portfolio. The stock is cheap. It is trading close to a zero enterprise value and if you add back the equity position they own in a publicly traded stock you are getting paid to own the company. Not only is it cheap on an enterprise value basis, but the if you go through public acquisitions in the industry the stock has 50% upside today — based on price to sale

Insider Buys: Good morning everyone. Last week we covered a “hidden” EV company that is trading for less than zero. They have a large pile of cash. They own a 70% interest in a publicly traded company that is up 200%. And they are right on the cusp of profitability. The market doesn’t seem to know this company even exists. Any investor who does their homework should see the clear undervaluation of this company and the potential for it to become a multi-bagger. If you missed the report you can re

Hidden EV Company: This might be one of the most interesting special situations in the public markets today. A recent IPO that trades in nano-cap land and owns 66% of an EV company who has seen their share price increase 178% over the past month. Big named EV investors are calling this the “Tesla of the water”.

Volatility is Opportunity: I have been investing in the public markets for over a decade. Throughout this time I invested in multiple industries, businesses and researched over 500 different companies. From personal experience, I can confidently say that public market investors are an interesting breed. Investors in this space will claim to be long-term investors.

Compelling Buyout Play: Merger arbitrate idea with a juicy 9.0% spread

Second Swing: I extensively covered the catalyst with Title 42 getting removed and the opportunity to be had with prison equities that own assets at the Southern border. I covered GEO Group (GEO) and it went up close to 20% in a week given the anticipation of Title 42 getting removed. Title 42 is now removed and the stock has collapsed to extreme lows.

How To Outperform The Market : Good morning everyone. I hope everyone had a great Memorial Day and nice three day weekend. Today I wrote about my strategy I use to invest in public markets. But before we get into the newsletter this morning, first a word from today’s sponsor… A Global Retail Gamechanger

Broken Business Sold: Qurate Retail dumps money losing Zulily and instantly reduces leverage ratios and improves EBITDA and Free Cash Flow

Bonds: I spent my entire career investing in public equities. Nothing complex. Just buying small companies for a discount to their implied intrinsic value. I’m a value investor so my goal is to buy undervalued assets under liquidation value. After figuring out liquidation value I model out the stream of cash flows for an indefinite period of time.

Let's Talk About Oil: Good morning everyone. Oil and gas continues to be one of the most volatile sectors to invest in. Despite the volatility I continue to hold a meaningful amount of oil and gas names in my portfolio. I think the sector is undervalue, underappreciated and will likely outperform over the next few years.

Ongoing Sale: Strategic alternatives still ongoing with meaningful upside over the next 12 months and management sells the remaining division

Insider Buys: The best insider buys of the week

Sell: I have written this name up twice in the past twelve months. The stock has done well since both write-ups. At the peak we are up 25% or so in less than a year. The business has done well and just like I was modeling it to do. Not many people follow the situation so if you can get smart on the company and understand the moving parts, cash flows become easy to model.