Theme of the Week
Thematic Review
In general, we intend to provide more follow-through on the ideas that we mention: both on the thematic and the ED side. None of that “remember that tiny kliff note 5 months ago, turns out there was a lot of alpha in this”.
When we believe something is worth watching, we’ll keep you updated. As an example, it would have been difficult to miss our stance on Marex (MRX).
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
Want to just cut through the noise and get actionable event-driven ideas?
KEDM Lite is a must for event-driven investors.
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 subscribers to the annual plan will get access to the KEDM Discord room. All KEDM Pro subscribers get Lite for free!
Kliff Note of the Week
Buyback Notes: Flagging Zegona (ZEG LN), which looks interesting at these levels. A roughly €8bn EV, almost €800m in operating cash flow and a credible path to €1bn in a couple of years on visible lsd growth on top of a bunch of cost savings / efficiency measures kicking in.
No taxes given plenty of NOLs, interesting upside optionality (eg Ranco), strong management alignment. And a 15% buyback incoming. Could see >100% upside based on normalized yield assumptions alone.
Golden Handcuff Monitor: AAR Corp (AIR) just granted CEO John Holmes a special one-time performance equity award of 161,500 shares, separate from his regular annual LTI, with vesting tied entirely to stock price targets.
The backdrop for the grant is just strong: record FY2026 results, 19% revenue growth, a 12.1% adjusted EBITDA margin, and net leverage already down to 2.03× after integrating multiple acquisitions.
That context makes the $ 175, $200, and $250 hurdles more credible. AAR remains our preferred way to play the aerospace after-market theme.
CEO Turnover Notes: Stride’s (LRN) CEO James Rhyu was replaced by old-timer Robert Knowling. Is the 71-year-old CEO the right person to run a company that’s struggling with tech implementations, or is he better suited to manage relations with school boards?
To calm the markets, LRN pre-released earnings in line with expectations, but they failed to comment on enrollment figures, which spooked markets. This has been a volatile name. If they guide to a return to growth in Q1, this should re-rate from the 9x FCF it currently trades at.
If for some reason enrollments decline because parents are holding a grudge after a year of tech issues, watch out below. Operating leverage is very strong here. Mr. Knowling’s contract includes a change-of-control provision.
13D and Activist Notes: Soken Chemical (4972 JP) recently adopted an anti-takeover policy in response to Axium Cap’s aggressive increase in its stake. Soken mentioned that Axium had not adequately explained its intentions.
Meanwhile, the shares dropped quite a bit, with Axium probably saying ‘thank you’. Soken is back to growth while also boosting operating margins to new highs.
Solid FCF generation and over 40% of its market cap in current assets (mostly cash) net of total liabilities. ~12x LTM PE.
Investor Letter Notes: AnaptysBio (ANAB) is an asset-light royalty company that collects royalties on sales of Jemperli, a fast-growing cancer drug commercialized in partnership with GSK.
But the story doesn’t end here. ANAB accused GSK of violating its commercial agreement, and, depending on the outcome of the trial, Laughing Water Capital thinks the shares could be worth $300.
Summers Value Fund also identified two scenarios: a) higher profit for ANAB in the future, b) ANAB getting acquired. The July court hearing didn’t reach any settlement, and the post-trial argument is scheduled for Oct 20.
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.