Discover our rich history of findings asymmetric opportunities
At Moretus Investments, we excel in identifying undervalued assets in the public equity markets. Our meticulous research and innovative strategies have consistently yielded superior returns for our diverse clientele, from individuals to institutions.
Bold ideas that turned out right time and time again.
Carvana
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- ▹Carvana went from $360 to $4 per share with a short interest of 88% of total float.
- ▹At the end of 2022, the main narrative in the professional investment community was a broad-based recession.
- ▹We ignored the macro environment and focused on the business, which probably had the toughest year in its existence.
- ▹Carvana was over-extended, with a recent acquisition and slump in car prices.
- ▹However, the market cap was down to $400M and insiders were buying shares aggressively.
- ▹Alternative data allowed us to track company-specific progress in real-time, significantly reducing the risk of permanent capital loss because of bankruptcy.
- ▹In my investment management career, I have never heard an executive so determined to turn a situation around as Ernie Garcia in Q4 2022 on the Carvana earnings call.
- ▹Last quarter, Carvana was the most profitable automotive retailer in the US.
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Cardlytics
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- ▹The stock price was down to $3 per share from $150 in 2021.
- ▹Company had a dispute with Bridg on an acquisition, which created uncertainty in the stock price. This was a great time to buy, as the market was overreacting to the news.
- ▹Cardlytics offers value to advertisers by providing data on consumer's credit card usage and to banks by driving engagement with the bank's app
- ▹The market is constantly underestimating the ability of Cardlytics to grow and scale post-covid. Which allowed us to generate multiple triple digit entry and exit points.
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Olaplex
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- ▹The stock price was down to $1.22 post IPO from $22 in 2021
- ▹Olaplex that went viral on TikTok was able to grow sales and revenue exponentially
- ▹Their strength (Viral Social Media Marketing) turned into a weakness. They mishandled misinformation online, which did severe damage to their brand
- ▹With a New CEO in place, a turnaround plan and attractive valuation, we were able to enter at a good price
- ▹Michael Burry (Big Short) invested $3M in Olaplex, after we made the recommendation, which confirmed our value thesis
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Coursera
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- ▹Stock down 83% from IPO high of $63 in 2021 to all-time low of $6.61
- ▹Deeply undervalued at $300M EV and 0.47x EV/Revenue vs. edu-tech peers at 2-3x
- ▹Clean balance sheet with $600M+ cash and minimal debt provides runway
- ▹Sustainable 10%+ growth with 60%+ gross margins and improving unit economics
- ▹Strong MOAT via partnerships with 275+ universities including Yale, Stanford, Google
- ▹Scalable platform: marginal cost near zero for additional students/courses
- ▹AI likely to augment not replace structured learning and credentials
- ▹Regulatory barriers protect accredited education from pure AI disruption
- ▹Contrarian play against overblown AI disruption fears in education
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Viasat
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- ▹Stock down 50% in 3 months, trading at 0.23x P/S - lowest multiple since 1997 IPO
- ▹Market cap of $1.2B severely undervalues $4.6B revenue business with improving margins
- ▹$1.9B cash + $3.4B current assets provide runway through capex-heavy period
- ▹FCF positive expected by Q1 2026 as capex normalizes from $1.2B to $700M
- ▹GEO satellites superior for video streaming (80% of internet traffic) vs LEO
- ▹Viasat-3 offers 1TB+ capacity with dynamic allocation vs. Starlink's fixed bandwidth
- ▹Mature regulatory framework protects GEO vs. growing LEO environmental concerns
- ▹Base case: 122% upside at zero growth (5% FCF margin on $4.7B revenue)
- ▹Growth case: 10x upside potential with 7% revenue CAGR and margin expansion
- ▹Key risk: Successful deployment of Viasat-3 L2/L3 satellites in 2024
- ▹High barriers to entry (capital + regulatory) protect from disruption
- ▹Management demonstrating market responsiveness with re-segmentation
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Investing in financial markets involves the risk of loss and there is no guarantee that all or any capital invested will be repaid. Past performance neither guarantees nor reliably indicates future performance. The value of investments and the income from them will fluctuate with world financial markets and international currency exchange rates.