September 2024 - Investing Brain Dump

PRKS, CG, Semis, EXPE, HBI, LKQ, etc.

If you’re interested in talking more about any of the below topics, feel free to drop a comment, DM me on Twitter (@stockthoughts81), or email me (stockthoughts81@gmail.com).

• PRKS seems really interesting. There is a good VIC writeup and a good one from Voss Capital.

  • They own SeaWorld, Busch Gardens, etc.

  • It is basically controlled by Hill Path Capital, a PE firm that has made great operational improvements over the course of the past ~5 years or so. A recently amended shareholder agreement essentially limits their voting power to 25% and would require any Hill Path acquisition to be supported by a majority of non Hill Path shareholders.

  • Recently launched a $500m buyback, which is huge on a ~$2.85b market cap and an even smaller float given how much Hill Path owns.

  • I don’t think the market is giving them any credit for international expansion or hotel developments which, as far as hotel developments go, seem relatively low risk.

• Carlyle still seems interesting. After the 1Q report, it seemed like the market was disappointed with the $5b in fundraising vis a vis KKR’s performance and a 2024 target of $40b. Well in 2Q, they raised $12.4b. While this was still well short of KKR’s $32b (roughly flat with $31b in the two prior quarters), it seems to provide good support for the $40b target. Still, the market didn’t like 2Q and I am not totally sure why.

• Fairlight Capital has one of the best 5 year track records I have seen. And I haven’t heard them talked about all that much. Only 7,762 followers on Twitter. They have compounded at 44% net since March 2019. Here’s the 2Q letter.

• Bottoms-up consensus estimates for WFE companies reflect some big years in 2025 and 2026:

• TER: “We are pretty bullish on 2025.”

• MKSI continues to execute well. Not exactly sure how to think through how much upside remains. This part of the semi-cycle can get tricky…

• EXPE remains interesting, in my opinion. Here is Evercore’s Mark Mahaney on why he has it as his #2 large cap internet long (as of May - PT down to $175 from $190 since then). While the macro got worse in July, it was nice to see that Vrbo had returned to growth by the end of 2Q24.

• A cure for writer’s block

• CCOI’s Dave Schaeffer on the LUMN deals: “I think what was announced the other day by this competitor was an acceptance of terms that we found uneconomic… My goal is not to borrow money at 7% to get a 3% return.”

• Karpathy on how to learn and become an expert (link)

• Gary Friedman bought $10m RH in the open market at $216 back in June

  • More than the cumulative amount of stock he has bought previously

• It’s really tough to analyze Dollar General right now. It seems like the key issue is whether or not they can get comps back to a level where they get some operating leverage (2.5-3%?). But there are so many different moving pieces. Temu, Walmart, non-consumables mix shift, possible brand impairment, dependence on snack sales, weak < $35k household, etc.

• Anyone going to the LKQ investor day next week in Nashville? Stock looks interesting. A key question seems to be - is ADAS really just a 100bps headwind?

• Harshita at Bernstein finally upgraded PYPL

• Some insider buying at SNBR.

• HBI looks interesting.

• Alpha Theory seems like a cool tool for positions sizing.

Disclosure: This is not investment advice and I/we may own positions in securities mentioned.