Theme of the Week
We have repeatedly gone on record calling out the market’s increasing stupidity. We’ve had a Ponzi (bitcoin) reach $2t in market cap. We’ve had the Ponzi of ponzi schemes (MSTR) argue for S&P500 inclusion as though they were a real business.
We’ve seen the short squeeze in silver, which Wall Street has tried to re-engineer unsuccessfully since the 70’s. We’ve had a couple of nuclear and quantum science projects, and their stocks have gone vertical.
We’ve done various articles on crypto and on bitcoin treasury companies. We called bitcoin the ultimate ‘greater fool’ asset, which would go up as long as there was a greater fool to step in every year.
It looked like MSTR was the ultimate greater fool, one that would be difficult to top. Then, of course came the AI (infra) craze. But the end result always seems inevitable. The greatest surprise is often that the supply of greater fools seems to be never-ending.
Talking about factor rotation into value feels a bit like being part of a religious cult that’s predicting the apocalypse. It’s easy to make bold predictions, and it can get you a lot of followers, but for many decades, the call for the apocalypse has been wrong to the point that if it ever happens, nobody will believe it, even though it’s staring you right in the face.
Kuppy’s Tweet of the Week
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Kliff Note of the Week
Spin-off Monitor: Grifols (GRF SM) is considering listing its US plasma business in the US, potentially raising to $5b. Interesting, as this move would imply a value of the US unit far higher than all of Grifols.
It would also help to reduce debt. Grifols is currently trading at roughly the same valuation as during the Brookfield (failed) takeover saga.
Insider Cluster Buy Monitor: Old KEDM flag Butler National (BUKS) continues to perform, and insiders are still adding shares on the open market. The last quarter (ending Jan. 2026) showed very strong, accelerating revenue growth and an EBITDA margin of>40%.
As a reminder, Butler has a casino and an aerospace business (because why not). It’s mainly the latter that is performing quite well.
Plenty of aircraft need (military) modifications. Still 8x LTM EV/ EBITDA (though EBITDA can be lumpy), strong margins, ramping cash flow, no coverage.
Announced Buyback Monitor: Sunbelt (SUNB) held its investor day following its recent UK listing. The shares have been somewhat pressured by the selloff in industrials. Analysts are also updating their models and finding that IFRS EBITDA might be an overstatement relative to EBITDA under US GAAP.
Mid-term guidance was underwhelming, with a predicted 5% rental revenue CAGR and 8%+ EPS CAGR. This is a good business, and it’s been a 100-bagger for a reason, but for an industrial to do well, your end markets have to grow.
IPO Monitor: We are getting closer to SpaceX’s IPO, which could be a large catalyst for Echostar (SATS). The latest reporting puts the market cap at $1.75tn – or whatever, at this point. We’ve previously flagged EchoStar as an interesting NAV play with the SpaceX IPO as a nice kicker.
As a reminder, while we didn’t do a deep dive, we guesstimate that between the remaining spectrum assets (mostly AWS-3), PayTV, Hughes, Retail Wireless, and some debt, taxes, and lease termination costs, this covers 60-110% of the current NAV – excluding a lsd% stake in SpaceX (now ~2.2% after the xAI integration?
Anyways, this alone should cover the market cap). The financials still look messy as Echostar awaits the ~$23bn cash from the AT&T spectrum deal (by mid-June?).
CEO Turnover Monitor: Electronics retailer Currys (CURY LN) dropped quite a bit on the news that CEO Alex Baldock will step down after eight years. We get why the market is not happy; this is the guy who successfully turned the business around, stabilizing margins, reducing pension liabilities, and strongly improving the balance sheet.
On the other hand, the business is much more solid now and growing, with the correction coming on top of the recent market volatility. 4x EV/EBITDA.
Bankruptcy Exit Monitor: It’s been a while since Ferrellgas (FGPR) emerged from bankruptcy. Still, they finally managed to get rid of their Class B share overhang, materially simplifying the equity and increasing the float.
The current capital structure consists of 11.4m Class A units ($307m market cap), $1.45bn of debt, and roughly $700m of preferred (plus $175m of accretion), for a total enterprise value of $2.4bn against $333m of TTM EBITDA (7.3x).
With EBITDA potentially reaching $350–375m and peers trading closer to 9x, this implies an equity value of $50–60, versus $27 today. The balance sheet remains the key risk given the extremely high leverage, but with the structure now cleaner, the equity screens as inexpensive if the company executes on modest EBITDA growth.
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!