The archive awakens
One of our promises to our subscribers is that our thematic write-ups and Kliff Notes will always be human-generated. In a world with too much information, a human filtering out the alpha-generating ideas is valuable. We will keep doing that.
But at the same time, we are sitting on more than 6 years of data. When was the last time you pulled up a KEDM from 2023 to read our thoughts on a company you own? Exactly. But that can change.
Indeed, we’re now rolling out a KEDM MCP server.
Trust us, we had no idea what that meant either. But now we certainly do. Here’s what it comes down to: you can now access our full history through either Claude or ChatGPT, just by asking. It takes 1 minute to set it up, and it’s a lot of fun.
For example, you simply ask “What does KEDM think about this stock?”. This integrates perfectly into your workflow, no need to open our website and download a PDF.
Or if you didn’t have time to read the whole issue on Sunday and you’re too busy to catch up on Monday, ask Claude for a summary of the most actionable ideas.
Just pure gold.
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Kliff Note of the Week
Cluster Buying Notes: Big open-market purchases from insiders at HB Fuller (FUL), clearly buying the dip. And the action here is still going. HB Fuller is buying UK medical adhesives maker Advanced Medical Solutions (AMS LN) for roughly $942m in cash.
The deal is moving along, and it is expected to close by year-end. Activist Ancora opposes the deal because it adds debt and offered $1.2-1.4bn in cash for Fuller’s building adhesives unit (on a $4.7bn company EV), which the company rejected. Ancora is demanding a strategic review.
Fuller’s strong Q3 results give it a good defense, but the fight continues.
Investor Day Notes: French satellite operator SES (SESG FP) has had a rough stretch, with revenue and EBITDA falling and the stock down about 50%. But a few catalysts are coming up.
There’s talk about early monetization of its huge US C‑band spectrum proceeds (roughly €3.1bn net), instead of waiting until 2030. That would be quite material on an $8.6bn EV. There’s also the upcoming Intelsat merger, where SES should be able to squeeze out large synergies.
It’s all blurry, but things could move fast here. There’s a CMD coming up on Nov. 9. Given the shares’ horrible momentum, that might make for a nice trade.
CEO Turnover Notes: This company, with a humble name, popped up on screens after its CEO’s sudden resignation. We’d never heard of Praemium (PPS AU), but given the market’s reaction (up 9% initially), investors were hoping for something.
Praemium is a fast‑growing platform business, showing solid growth, margin expansion, and FCF generation, backed by a healthy net cash balance sheet. ~7x forward EV/EBITDA doesn’t look representative.
We understand that with a new CEO there might be (again) interest in selling the company. A reminder that Netwealth previously offered $1.50 p/s. HD Capital Partners has a nice write-up on it.
13D and Activist Notes: More activists are piling up on Strata Critical Medical (SRTA), with Third Point disclosing a 5.8% stake and pushing for a strategic review (a sale). We flagged this one in April.
The shares moved up quite a bit soon after but are now roughly flat since. Strata has a unique profile, specializing in air and ground organ transportation. Solid top-line growth driven by secular tailwinds (regulation, health, aging population), inflecting operating earnings, and a solid balance sheet.
Coverage is picking up, with liquidity and visibility improving. Roughly 10x forward EV/EBITDA (on our guesstimated EBITDA), for 20-25% EBITDA growth pa over the medium-term.
Investor Letter Notes: Protean Select Fund had a short write-up on physical security key manufacturer Yubico AB (YUBICO SS). The stock nearly doubled in the last 3 months from its historical low, mostly due to rising demand for ‘un-hackable’ security keys amid growing users’ account security concerns related to AI.
The company has partnered with OpenAI, which recommended YubiKeys to its users. Authentication keys and software could be another niche sector to benefit from rising AI usage.
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.