The following securities represent core holdings in Global Value Investment Corp’s (GVIC) composite of managed accounts as of 12/31/2018. Individual account holdings may differ.
Representative Equity Holdings
AutoWeb, Inc. (AUTO)
A US-based automotive marketing services company providing high-quality consumer leads, internet advertising, and associated marketing services to automotive dealers and manufacturers throughout the United States. The company’s products include new and used vehicle lead generation programs, which allow consumers to submit requests for pricing and availability of specific vehicle makes and models within a geographic area, and online advertising programs including impression-based and click-through ads. New CEO Jared Rowe is developing a strategic plan that we expect will lead to meaningful value creation and has hired several qualified executives recently. A normalization of revenues and margins should cause AUTO to trade in line with historic multiples.
Bristow Group Inc. (BRS)
A US-based global provider of industrial aviation services to the offshore energy industry in Africa, the Americas, the Asia-Pacific region, and the North Sea and Caspian Sea areas. Its helicopters are used principally to transport personnel between onshore bases and offshore oil and gas production platforms, drilling rigs, and other installations, as well as to transport time-sensitive equipment to such offshore locations. BRS also provides search and rescue (SAR) services to offshore oil and gas companies and governments, as well as fixed-wing air transportation services in support of the company’s offshore helicopter operations. A recently-announce acquisition presents compelling diversification opportunities, but the company is issuing a substantial amount of equity as part of its financing.
Corning Incorporated (GLW)
A US-based global manufacturing business that produces LCD displays, specialty glasses and ceramics, fiber optic cables, emission control products, and laboratory and research equipment. Widely-known products include Gorilla Glass, a durable display glass used in mobile electronic devices, and Valor Glass pharmaceutical vials, in which the company is investing heavily. GLW is among the foremost providers of fiber optic cables, which will play an increasingly important role in continuing development of telecommunication infrastructure.
Fluent, Inc. (FLNT)
A US-based digital marketing business that recently spun off its fledgling regulated data analytics business in a transaction that we believe will be highly accretive to shareholders. As Fluent’s financial characteristics as a standalone company become clear, we anticipate that investors will appreciate the business’s healthy margins and cash generation potential, resulting in significant price appreciation. Excesses cash from operations may be used to prepay debt or for accretive acquisitions. The company possesses a desirable competitive position, unique products, and a young and innovative workforce. We maintain a high degree of confidence in Fluent’s management team.
Gulf Island Fabrication, Inc. (GIFI)
A US-based fabricator of complex offshore steel structures for customers in the oil and gas and other marine industries. GIFI also fabricates marine vessels, including tugboats, offshore supply vessels, civilian transportation vessels, and government vessels. The company is well-positioned to participate in a developing US offshore wind energy market, and plans to announce a large contract to serve as the primary contractor for a liquified gas export facility on the Mississippi Gulf Coast. The recent sale of a redundant property provided much-needed liquidity until larger contracts materialize. We expect continued improvement in backlog and general business conditions.
Liquidity Services, Inc. (LQDT)
A US-based online marketplace operator specializing in surplus, salvage, and scrap assets. LQDT is in the midst of a corporate brand and marketing reorganization that we expect to result in revenue growth and margin expansion, causing an increase in shareholder value. A multi-year investment in improved technology should result in increased efficiency and cost savings. After several anemic periods, the company is showing signs of growth in its core markets.
LSB Industries, Inc. (LXU)
A-US based producer of nitrogen-based agriculture and industrial products at three domestic facilities and one non-owned staffed plant. Ongoing changes to operational and maintenance procedures will improve onstream rates. Margins on industrial products are attractive and relatively stable. A cyclical upswing in agricultural fertilizer pricing is underway, which should lead to improved margins in the agriculture segment. A recent debt refinance has provided additional operating flexibility, and we expect further balance sheet strengthening as cash flow improves. LXU has demonstrated excellent execution under new management.
New York Community Bank, Inc. (NYCB)
A US-based mid-tier consumer and commercial bank offering deposit and loan products and services. NYCB has established a niche lending position in rent-controlled residential multi-family housing buildings in New York City and has recently shown growth in its specialty commercial financing business. Loan loss provisions and actual write-offs are substantially and consistently among the lowest in its peer group. Recently legislation raised the threshold that defines a Systematically Important Financial Institution (SIFI) from $50 billion to $250 billion. We anticipate NYCB will resume growth and remain optimistic about the potential for it to acquire another bank or be acquired.
Red Violet, Inc. (RDVT)
A US-based data analytics business that was recently spun off as a stand-alone entity. Red Violet provides information and verification services akin to a credit reporting agency. Its flagship product, FOREWARN, has experienced early success with real estate agencies seeking to vet home buyers. Red Violet’s management team has operated in the data analytics industry for several years.
Seaspan Corporation (SSW)
A Hong Kong-based, globally-operated independent owner and manager of oceangoing container ships which are chartered on long-term, fixed-rate time charters to various established container liner companies. Market recovery from a period of depressed charter rates due to an oversupply of vessels is underway. We believe industry and economic conditions remain favorable in the medium- to long-term. As new management continues to reshape the balance sheet, we anticipate strategic acquisitions.
StealthGas Inc. (GASS)
An Athens, Greece-based, globally-operated shipping company that provides seaborne transportation of liquified petroleum gas (LPG). GASS is dominant in the small-sized pressurized gas shipping market. The LPG shipping market continues to improve with accelerating demand for product transportation and a favorable outlook for global fleet growth in the segment. We believe GASS is trading at an attractive discount to net asset value and has significant appreciation potential.
Subsea 7 S.A. (SUBCY)
A London, England-based, globally-operated company providing seabed-to-surface engineering, construction, and services to the offshore energy industry. SUBCY’s stock was disproportionately discounted during a period of reduced offshore oil and gas exploration and production activity but has benefitted from improving markets and normalizing capital expenditures by its customers. The acquisition of Seaway Heavy Lifting has provided exposure to the growing offshore renewable energy market. SUBCY’s technology portfolio is among the best in its industry.
TravelCenters of America LLC (TA)
A US-based business operating and franchising North American highway system travel centers with fuel and convenience store services for business and casual travelers. Expansion of the core travel centers business coupled with improvements in servicing capabilities position the company for revenue growth and margin improvement. The company’s portfolio of unique assets has substantial intrinsic value.
UFP Technologies, Inc. (UFPT)
A US-based designer, engineer, and producer of high-grade foam and molded fiber solutions for electronic, medical, and specialty packaged products. UFPT recently completed a reorganization of its production assets to more efficiently serve its growing customer base in a highly-fragmented industry. Management has executed on its plant consolidation and rationalization plan, and in the process continued to drive shareholder value. The recent acquisition of Dielectrics increases exposure to lucrative medical markets.
Wayside Technology Group, Inc. (WSTG)
A US-based, globally-operated technology wholesale company that resells computer software and hardware developed by others, as well as provides technical and related customer services. Top-line growth has been consistent but net margins have been compressed. A new CEO should bring enhanced financial discipline and strategic vision to the company.
Representative Fixed Income Holdings
Alcoa Inc. (013817AW1)
Coupon Rate: 5.125%
Maturity Date: 10/01/2024
Credit Rating: BBB-
eBay Inc. (278642AJ2)
Coupon Rate: Variable
Maturity Date: 08/01/2019
Credit Rating: BBB+
GE Capital Corporation (36966THT2)
Coupon Rate: Variable
Maturity Date: 03/15/2023
Credit Rating: BBB+
Kraft Heinz Food Co. (50077LAD8)
Coupon Rate: 3.00%
Maturity Date: 06/01/2026
Credit Rating: BBB
Owens & Minor, Inc. (690732AE2)
Coupon Rate: 4.375%
Maturity Date: 12/15/2024
Credit Rating: BB
Pitney Bowes Inc. (724479AN0)
Coupon Rate: 4.95%
Maturity Date: 04/01/2023
Credit Rating: BB+
Rent-A-Center, Inc. (76009NAK6)
Coupon Rate: 4.75%
Maturity Date: 05/01/2021
Credit Rating: CCC
Trinity Industries, Inc. (896522AH2)
Coupon Rate: 4.55%
Maturity Date: 10/01/2024
Credit Rating: BBB-
United States TIPS (912828V49)
Coupon Rate: 0.375%
Maturity Date: 01/15/2027
Credit Rating: AAA
United States TIPS (912810PV4)
Coupon Rate: 1.75%
Maturity Date: 01/15/2028
Credit Rating: AAA
Global Value Investment Corp. (GVIC) has prepared the information on this page from sources and data believed to be reliable, but makes no representation as to its accuracy or completeness. The securities mentioned above are provided for information purposes only and are only current as of the date indicated above. Due to various factors, including changing market conditions, the securities listed may no longer be reflective of the current securities recommended by GVIC, and are subject to change without prior notice.
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