Jacobus Enslin @Enslinjaco: "𝙉𝙤𝙫𝙚𝙢𝙗𝙚𝙧 𝟮𝟬𝟮𝟱 𝙪𝙥𝙙𝙖𝙩𝙚 𝙋𝙚𝙧𝙛𝙤𝙧𝙢𝙖𝙣𝙘𝙚 •..."

United Kingdom

𝙉𝙤𝙫𝙚𝙢𝙗𝙚𝙧 𝟮𝟬𝟮𝟱 𝙪𝙥𝙙𝙖𝙩𝙚 𝙋𝙚𝙧𝙛𝙤𝙧𝙢𝙖𝙣𝙘𝙚 • The portfolio returned -5.43% in November vs 0.13% for the SP500. • YTD the portfolio returned 37.69% vs the SP500 return of 16.45%. • The annualized return since inception of the portfolio is 22.41% vs 12.15% for the SP500. 𝘾𝙤𝙢𝙢𝙚𝙣𝙩𝙖𝙧𝙮 The drawdown in November is almost entirely attributable to the position in $ASPI (ASP Isotopes Inc) (ASP Isotopes). As mentioned in my previous post, this position will be very volatile due to the pre-commercial status of the company. I admit there have been some questionable actions taken by the management team, especially related to dilutive capital raises and the allocation of that capital. This is potentially a red flag and justifies the sell-off. That being said there are many catalysts on the horizon over the next 6 months including the spinout of their QLE subsidiary, first commercial sales of isotopes from their existing 3 plants, commissioning of 4 new isotope plants and the approval of their Renergen acquisition. If ASPI can execute on their stated goals, I believe the fair value of the company is around $20 per share, representing ~200% upside. I am unlikely to add to the position, at least until the QLE spinout has been completed and in the same breath I’ll exit the position if any more red flags emerge as my confidence in the management team has been eroded. A recent new addition to the portfolio is the Polish company, $INPST.NV (InPost SA) InPost is a Polish logistics company that pioneered the operation of Automated Parcel Machines (APMs) for e-commerce platforms. InPost has 70% share of the APM market in Poland and is actively expanding across Europe and the UK (international segment). With e-commerce penetration growing, APM penetration increasing, and international expansion underway, I believe InPost is well-positioned for a multi-year growth trajectory. Their margins, returns on capital, and free cashflow should normalize over the next three quarters, setting the stage for renewed expansion and long-term value creation. Inpost has a market cap of PLN 22bn. Their Polish business is extremely cash generative at PLN 2.1bn FCF per year. The international segment is Ebitda positive but FCF negative due to them spending about PLN 1bn on expansion capex in the international segment. On a consolidated group level Inpost is generating about PLN 1bn in FCF (+2bn Poland; -1bn international) which puts them on a P/FCF multiple of 22x. If you calculate their normalised FCF, by adding back expansion capex the business is trading at around 10x FCF. This is an undemanding multiple for a business with a very big moat. One then needs to add the future growth of the international segment as utilisation rates there pick up closer to that of Poland. This could easily add another PLN 1bn to FCF, which would mean the company is valued at <7x expected future FCF. I see it as the Polish segment providing a decent margin of safety from a valuation perspective while the international segment offers the potential for a lot of future growth. One aspect of European companies I have come to realise is that they get punished for spending FCF on expanding their operations, even if the funds are spent on high ROI projects. I therefore think there is a risk that Inpost stays cheap until their expansion capex slows down. This is the same dynamic playing out at $BFIT.NV (Basic-Fit N.V) I will therefore keep the allocation at a single digit % as I don’t want to get caught in a value trap for years. Inpost ticks a lot of boxes for me, including being founder led, high revenue growth (>20%), high +rising ebitda margins (>25%) and long runway to reinvest capital at a high ROI. My more in-depth analysis can be found here: balanciercapital.substack.com/p/inpost-sa-ams-inpst?r=3ehfwb I have also added a position in $PYPL (PayPal Holdings) (Paypal). The thesis is quite simple. In order for Paypal’s stock price to double over the next 5 years, three things need to happen: 1) FCF needs to grow by a min of 3% per annum 2) They need to keep repurchasing 7% of their own stock each year and 3) their multiple needs to expand from 11x to 15x. I view this as a low hurdle – they are already doing point 1 and 2. I looked at Paypal 2 years ago and decided to pass as they were a very bloated company as evidenced by their revenue per employee being much lower than competitors. Since then, under the new Ceo, they have reduced headcount meaningfully while also introducing new verticals for growth. I don’t see a high risk of permanent capital loss. Best regards Jacob

Not investment advice. The author may have financial interests in the mentioned instruments.