Theme of the Week
Fund Letters
As a matter of tradition, fund managers write to their LPs once a quarter to update them on the fund’s performance. The format is ubiquitous and has changed little over the years. It starts with some words on performance, followed by Buffett quotes in the event of prolonged underperformance.
Then we get the part that we’re all here for: the actionable investment ideas. We’re not looking for mutual funds that allocate 2% of their AuM to their favorite Mag7. We’re looking for the quirky portfolio manager who’s put most of his LPs’ money in that one stock that he’s been studying for years. We want to read the letter from the manager who sees things differently, and who identifies investment trends that nobody is talking about.
For years, KEDM has been tracking around 600 investment letters every quarter. That’s a lot of information to work through, and you probably found the data as overwhelming as we did. Fortunately, we have a team of analysts working through those letters (of course, armed with various AI subscriptions and newly built tools) to distill them into a couple of macro takeaways and identify the best stock pitches.
Kuppy’s Tweet of the Week
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Kliff Note of the Week
Announced Spin Notes: REZI’s spin-off ADI Global Distribution (ADIG) held its investor day recently. ADIG’s story centered on thermostats, safety, security, and water controls, targeting mid-single-digit organic revenue growth and 23-25% adjusted EBITDA margins through product innovation, operating leverage, and software.
Roughly 80% of revenue is tied to repair and remodel, limiting housing-cycle risk, while management sees additional upside from an eventual housing recovery.
Cluster Buying Notes: ProQR Therapeutics (PRQR) CEO Daniel de Boer bought $513K across two separate purchases on July 7 and July 9, and a company director bought another $229.5K in late June (real money for a Dutch CEO).
PRQR is a small-cap RNA-editing biotech backed by a major pharma partner: Eli Lilly. Their collaboration, running since 2021 and expanded in 2022, could pay ProQR up to $3.75 billion in milestones plus royalties, real validation for a company this size.
The balance sheet just got stronger too: ProQR raised roughly $59 million in late June 2026, with Lilly buying in alongside the public offering to keep its stake intact, a vote of confidence from the partner who knows their science best.
CEO Turnover Notes: Copart (CPRT) announced that its previous CEO, Jay Adair, will get back in the saddle. We recently wrote that compounders are on sale and CPRT deserves some attention here.
CPRT runs an online auction platform for total-loss vehicles, in a duopoly with IAA (part of RBA). CPRT is every compounder’s dream, having 200-bagged in their 30-year history as a public company.
It’s got 2 moats (density of the junk-yard network and liquidity in a 2-sided auction platform), is defensive (in a recession, car values drop and more insurance companies will declare a car a total loss), and, until this year, used to be high-growth.
Golden Handcuff Monitor: Digimarc (DMRC) just brought in Paul Carreiro as CEO (ex-Elemica, Kinaxis, Infor), a pure enterprise software sales operator, not a tech guy. Going outside for a sales-heavy profile suggests they believe the product is solid, but the commercial execution has been the issue.
He’s been granted 752,600 performance units that pay out only if the stock hits $14, $22, and $38 (currently at $7.17) within four years. Surprisingly, the company reported a going concern warning at the time of the PSU grant.
Odd timing, or does the CEO think this is just a minor blip?
13D Monitor: Fermi (FRMI)’s already tense governance fight just kicked up another notch after former CFO and director Miles Everson resigned from the board, citing concerns about his access to board information and the handling of the recent convertible note financing.
Some investors may read his exit as further support for calls to shake up the board and tighten governance. At the same time, the company maintains that its current strategy and leadership team are best positioned to deliver long-term value for shareholders.
Disclaimer. KEDM is provided for informative purposes only. No due diligence has (yet) been performed on the names on this list. The list might change strongly on a regular basis. This overview does not constitute advice; always do your own due diligence. For the full disclaimer, please go here.