Important reminder: We recently launched KEDM Lite!
KEDM Lite fills something that was sorely missing. The small and mid-cap event-driven space, full of overlooked opportunities, needed its own dedicated product.
That’s why we introduced KEDM Lite, our newest addition to the KEDM family. KEDM Lite will focus on actionable investment ideas.
Each weekly issue of Lite delivers:
- 30+ actionable special situations and event-driven ideas (42–46 issues per year)
- Deeper focus on small and mid-caps, where alpha often hides
- Happy Hour webinars with our own Kuppy and guests, plus AMA sessions
- Full Lite archive access, growing into thousands of highlights over time
Early Subscriber Pricing: Less than $40/month on an annual plan — practically symbolic.
*Early subscribers to the annual plan will get access to the KEDM Discord room
Theme of the Week
Housing Update
Let’s go back to the housing market of 2021. A year into Covid, we were still stuck at home flattening the curve (or at least flattening our couch cushions). Businesses closed, and people lost their jobs. Whoever was fortunate enough to keep their job was told to work from home.
To keep us from protesting on the street, we were all given stimmies, which most degenerates gambled into the hottest SPAC. Surprisingly, it worked. We were all flush with cash and bored out of our minds.
In addition, J Pow took interest rates to 0%, thereby kick-starting the hottest housing market since the GFC. With mortgage rates at 2.7%, we could suddenly afford our wives’ dream house.
And even if you didn’t buy a bigger house, spending so much time at home made you aware of all the squeaky flooring, the decking that needed upgrading, the windows that were beginning to look old, or the doors that didn’t sufficiently block the noise made by your children playing around the house while you were trying to mute them during a Zoom call.
As you’ll remember, we were big housing bulls at KEDM. We were invested across the supply chain: distributors of building materials such as Builders FirstSource (BLDR), manufacturers of windows such as Cornerstone, or siding and OSB such as Louisiana Pacific (LPX). Basically, we owned anything that could be nailed to a house and marked up…
Kliff Note of the Week
Spin-off Monitor: Swedish industrial SKF (SKFB SS) is making progress on its Automotive business spin. The company is to be called SKF Vertevo, with a target listing on Nasdaq Stockholm around Q4 2026. This one will be interesting as well.
The future spin makes bearings and components for car manufacturers and has much lower margins and different cycles than SKF’s industrial businesses. After the spin, SKF will retain its higher-margin industrial market exposure (e.g., aerospace, energy, and automation).
On the other hand, the Automotive spin might be in for a rough ride, which could eventually lead to an interesting price. On the watchlist.
13D Monitor: Gregory Fortunoff continues to increase its position in Kingstone (KINS), arguing that the company is undervalued despite strong operational progress (including materially reduced debt and strengthened reinsurance programs, both of which have significantly improved earnings stability).
Fortunoff is now pushing the board to start evaluating strategic alternatives (i.c, selling the company). Makes sense in our view: KINS is back to double-digit growth with expanding margins, yet still trading at <7x PE.
M&A Monitor: FactSet (FDS) has already popped up on our Fallen Angels monitors (which will soon be added again) and is now reported to be attracting interest from Thoma Bravo and Hellman & Friedman.
Clearly, the -50% return over the past year, despite steady msd% topline growth, 95% subscription value retention, strong cash generation, and a healthy balance sheet, makes it screen like a good LBO candidate, roughly 11.5x PE.
Baron Capital has been steadily increasing its stake (now at over 10%).
“If you like these Kliff Notes, you’ll love KEDM Lite. Every week, Lite flags 30+ timely, actionable event-driven and special situations ideas.”
Strategic Alternatives Monitor: Just a few months ago, real estate developer Stratus Properties (STRS) announced that it would review strategic alternatives to ‘maximise value’. The review clearly mentioned ‘a plan of dissolution and liquidation’.
No surprise to see they’ve already finished the strategic review, deciding to liquidate and distribute the net proceeds to shareholders. Interestingly, recent asset disposals (Kingwood Place, Lantana Place, and West Killeen Market) were above book value. Trading at ~0.75x book.
Listing Change Monitor: Regarding the now-recurring Euro defense theme, Czech arms maker Colt CZ (CZG CP) is seeking a dual listing on Euronext Amsterdam.
The Czech arms maker is already listed in Prague and wants broader investor visibility and improved liquidity. The company has grown through major deals but is also seeing organic growth ramp up.
The move makes a LOT of sense; Colt has a $2.7bn market cap and is still trading at ~13x 2025 EBITDA, despite having similar growth and margins as other Euro peers trading at over 20x. We would not be surprised to see that gap close rapidly on a dual listing. Worth checking out.
Other Interesting ED Action: With oil wreaking havoc and volatility spiking, of course, we keep an eye on dear old Flow Traders (FLOW NA). This one has been good for plenty of nice trades in the past.
A reminder that Flow benefits from prolonged high volatility and strong vol spikes. With record high exchange volumes (across the product board), the spike in volatility and higher than average volumes and volatility in crypto (where FLOW has been expanding), the current share price does not seem to price it all in.
KEDM Event Driven Monitor scans over 20 corporate events for market moving information and distills them into our propietary “Kliff Notes.” One profitable trade should more than cover an annual subscription and access to the Event Driven chatroom!