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Nice investor presentation - Islamorada Investment Management


slkiel
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Cale Smith started something called a Spoke Fund a few years ago, which are essentially managed accounts where the portfolio has a significant investment with the same holdings. He's grown assets fairly rapidly and has had great returns. You may enjoy his presentation from his annual meeting. He talks about JCP, VELT, and MKL. Full disclosure, I consider him a friend. Great guy, highly ethical, very smart. He may even be on the forum.

 

https://www.islainvest.com/2013/07/17/annual-investor-meeting-presentation/

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I have followed his ideas for a while.  His CLWR spectrum value call was a very good one.  I thought his "no sale" scenario was a bit rosy, but of course that turned out to be moot.

 

I got impatient  on that one - should've stuck around.  Kudos to those like Cale that had the conviction.

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I haven't looked into VELT at all, but maybe I should given how it's now bouncing around its 52 week low. I don't know that I have any insights there though. Have to expand the circle of competence. If anyone has additional thoughts on it, it would be interesting to hear them.

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I haven't looked into VELT at all, but maybe I should given how it's now bouncing around its 52 week low. I don't know that I have any insights there though. Have to expand the circle of competence. If anyone has additional thoughts on it, it would be interesting to hear them.

 

Looked at this briefly. The company seems to be a leader in it's field but I was not happy at what I saw under the rug. I don't see how this company can last till the end of the year without massively diluting ( at lower and lower prices) or raising debt . The DSO is large and I don't see how the receivables as % of assets, could come down quickly to provide them with liquidity. They really have liquidity issues and I am not very comfortable trusting bankers ( although it is likely they are going to waive the breach of financial covenenants for the next few quarters) to keep this alive for long without a change in the liquidity situation. Also the CEO seems to make very optimistic projections..most of which do not come to pass - not a sign of very prudent or honest management. So, I am not sure I can trust the CEO's projections of free cash flow as mentioned in the presentation.

 

In any case this seems to be a lottery ticket stock with a lot of risk but a chance to make a lot of money if the co. can somehow manage itself through this transition period.

 

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