The following securities represent core holdings in Global Value Investment Corp’s (GVIC) composite of managed accounts as of 03/31/2020. Individual account holdings may differ.
Representative Equity Holdings
Allied Motion Technologies Inc. (AMOT) A US-based industrial automation business engaged in the provision of motion control products, marketed to original equipment manufacturers and end users. The company’s activities include designing, manufacturing, and selling of motors, electronic motion controls, gearing, and optical encoders. AMOT offers brush and brushless DC motors, coreless DC motors, integrated brushless motor-drives, gear motors, gearing, modular digital servo drives, motion controllers, incremental and absolute optical encoders, and associated motion control-related products to several critical and diverse end markets. The share price remains below our appraised value.
Atlas Corp. (ATCO) A globally operated asset manager that owns and operates subsidiary businesses engaged in oceangoing containerized transportation (Seaspan Corporation) and utility-scale customized power solutions (APR Energy). The company’s long-term strategy focuses on deploying capital across multiple verticals to create growth opportunities for its shareholders. The share price remains well below our appraised value.
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. Management has developed and is executing a strategic plan that we expect will lead to meaningful value creation. A normalization of revenues and margins should cause AUTO to trade in line with historic multiples. The share price remains well below our appraised value.
Core Molding Technologies, Inc. (CMT) A US-based manufacturer of sheet molding compound and various fiberglass- and plastic-based heat-molded products. The company’s customers include manufacturers of heavy-duty trucks, automobiles, personal recreational vehicles, and a variety of consumer and industrial goods that incorporate high-strength molded components. CMT recent acquired Horizon Plastics, a Canadian manufacturer of high-strength structural plastic components; the combined company presents attractive synergistic opportunities. CEO David Duvall is leading an operational turnaround that focuses heavily on manufacturing efficiencies; early results are evident. An imminent debt refinancing transaction should assuage lingering concerns about near-term liquidity. The company has operations throughout North America. The share price remains well below our appraised value.
Corning Incorporated (GLW) A US-based global manufacturing business that produces display glass, fiber optic cables, emission control products, medical and pharmaceutical equipment, and specialty glass. 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 global telecommunication infrastructure. As a result of recent market volatility, the share price remains well below our appraised value.
Flexsteel Industries, Inc. (FLXS) A US-based manufacturer of wooden, metal, and upholstered furniture. Under the leaderships of new CEO and industry veteran Jerry Dittmer, the company has implemented and is executing a comprehensive turnaround plan. Changes to executive management were recently completed with the announcement of a new CFO, which we view as a positive development. We expect FLXS to recover lost revenue, implement control costs, rationalize its operating footprint, and return to its previous margin profile. The company has a strong cash position and no debt. FLXS will continue to play a role in fulfilling the need for furniture across a range of price points while adapting to changing customer preferences. Executives and directors have been exceptionally active in purchasing common stock, which we view as an encouraging sign of progress. The share price remains well below our appraised value.
Fluent, Inc. (FLNT) A US-based digital marketing business offering performance-based marketing solutions through targeted digital interactions. FLNT is growing rapidly, and we anticipate that investors will soon 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. The share price remains well below our appraised value.
Fluor Corporation (FLR) A US-based, globally operated, preeminent provider of engineering, procurement, and construction services. FLR operates through five segments: Energy and Chemicals, Mining and Industrial, Infrastructure and Power, Diversified Services, and Government. Fluor is a well-managed, leading EPC provider and one of only a handful in the world with the scale, technical expertise, and financial wherewithal to undertake large and technically challenging projects. The shares have been depressed due to mismanagement by the former executive management team, which has been replaced. The share price remains well below our appraised value.
Gulf Island Fabrication, Inc. (GIFI) A US-based fabricator of complex steel structures, modules and marine vessels, and a provider of project management, hookup, commissioning, repair, maintenance and civil construction services. The company’s customers include U.S. and international energy producers; refining, petrochemical, LNG, industrial, power and marine operators; EPC companies; and the US Government., GIFI has a strong liquidity position after rightsizing its physical footprint, and trades at a substantial discount to net cash per share. Recent changes to the board of directors and executive management will provide fresh perspectives on capital allocation and corporate strategy. We expect continued growth in backlog and improved execution, resulting in meaningful share price appreciation. The share price remains well below our appraised value.
Hooker Furniture Corporation (HOFT) A US-based manufacturer and seller of furniture. HOFT sells a wide variety of casegoods and upholstered products. The company maintains a large network of third-party manufacturing partners in Southeast Asia as well as a domestic manufacturing footprint focusing on high-end and custom-made items. HOFT’s customers include independent furniture stores, specialty retailers, department stores, catalog and internet merchants, interior designers, and national and regional chains. HOFT’s ecommerce distribution is well-developed, a reflection of the company’s adaptive corporate strategy. The company is conservatively positioned and pays an attractive dividend. The shares price remains well below our appraised value.
Kraft Heinz Company (KHC) A US-based diversified manufacturer and marketer of food and beverages products. In 2015, Warren Buffett’s Berkshire Hathaway and investment firm 3G Capital orchestrated the merger of Kraft Foods and H.J. Heinz; the two investment firms hold a combined equity position in KHC of nearly 50%. Aggressive cost cutting after the merger led to an underinvestment in legacy brands, resulting in an impairment of goodwill in early 2019. Market sentiment is decidedly negative, but we believe KHC’s business is fundamentally sound. Recently appointed CEO Miguel Patricio has taken a measured approach to brand development and rationalizing KHC’s product portfolio, which we expect to be a catalyst to value creation. The share price remains well below our appraised value.
LSB Industries, Inc. (LXU) A US-based producer of nitrogen-based agriculture and industrial products at three owned facilities and one non-owned staffed plant. Ongoing changes to operational and maintenance procedures have meaningfully improved onstream rates. Growth opportunities exist in both the cyclical agricultural fertilizer segment and the high-margin industrial and mining segment. Historical execution issues are fading from the market’s memory, although the company’s capital structure is heavily weighted towards debt. We expect further balance sheet strengthening as cash flow improves. Coupled with continued operational reliability, this should lead to significant stock price appreciation. The share price remains well below our appraised value.
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 the rent-controlled multi-family housing market in New York City and continues to grow 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. NYCB has resumed growth after several stagnant years. We remain optimistic about the potential for it to acquire another bank or be acquired after a recent discussion with senior management. This well managed business continues to pay an attractive dividend. The share price remains below our appraised value.
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 LPG shipping market, which 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. The share price remains well below our appraised value.
Subsea 7 S.A. (SUBCY) A London, England-based, globally operated company engaged in the provision of engineering and construction services to the offshore drilling industry. It provides cost-effective technical solutions to enable the delivery of complex projects in all water depths and challenging environments. The Seaway Heavy Lifting and Siem Offshore Contractors subsidiary businesses provide exposure to the growing offshore renewable energy market. Its technology portfolio is among the best in its industry, and its balance sheet has low leverage, leaving it in an enviable position amid the current oil price slump and COVID-19 pandemic. The share price remains well below our appraised value.
TravelCenters of America Inc. (TA) A US-based operator and franchisor of travel centers. TA’s products and services include diesel fuel and gasoline, truck repair and maintenance services, full-service restaurants, quick serve restaurants, travel and convenience stores, and various driver amenities. The company operates travel centers under TA, Petro Stopping Centers and TA Express brand names. Its properties are concentrated along the US interstate highway system and larger state highways. In early 2020, TA hired a new CEO and new CFO, who together should bring a fresh perspective on corporate strategy and a renewed focus on cost control and earnings growth. The company’s portfolio of unique assets has substantial intrinsic value. The share price remains well below our appraised 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. A disciplined management team has consistently executed on growth and efficiency initiatives, driving long-term shareholder value. The acquisition of Dielectrics increases exposure to fast-growing medical markets, and we anticipate similar accretive transactions in the future. From a financial standpoint, the business is exceptionally fundamentally sound and there are several obvious avenues to continued growth. The share price remains below our appraised value.
Wayside Technology Group, Inc. (WSTG) A US-based, globally operated technology wholesale company that distributes 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. Changes implemented by management are beginning to bear fruit, and we expect both top and bottom-line growth to continue and accelerate. The share price remains below our appraised value.
Representative Fixed Income Holdings
CoreCivic Inc. (21871NAA9)
Coupon Rate: 4.75%
Maturity Date: 10/15/1027
S&P Rating: BB
Fluor Corporation (343412AF9)
Coupon Rate: 4.28%
Maturity Date: 09/15/2028
S&P Rating: BBB-
GE Capital Corporation (36966THT2)
Coupon Rate: Variable
Maturity Date: 03/15/2023
S&P Rating: BBB+
Kraft Heinz Food Co. (50077LAD8)
Coupon Rate: 3.00%
Maturity Date: 06/01/2026
S&P Rating: BB+
Owens & Minor, Inc. (690732AE2)
Coupon Rate: 4.375%
Maturity Date: 12/15/2024
S&P Rating: B-
Pitney Bowes Inc. (724479AN0)
Coupon Rate: 5.20%
Maturity Date: 04/01/2023
S&P Rating: BB
Royal Caribbean Cruises Ltd. (780153AG7)
Coupon Rate: 7.50%
Maturity Date: 10/15/2027
S&P Rating: BBB-
Royal Caribbean Cruises Ltd. (780153AU6)
Coupon Rate: 5.25%
Maturity Date: 11/15/2022
S&P Rating: BBB-
Under Armour, Inc. (904311AA5)
Coupon Rate: 3.25%
Maturity Date: 06/15/2026
S&P Rating: BB
United States TIPS (912828V49)
Coupon Rate: 0.375%
Maturity Date: 01/15/2027
S&P Rating: AAA
United States TIPS (912810PV4)
Coupon Rate: 1.75%
Maturity Date: 01/15/2028
S&P 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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