Cameron: [00:00:00] Welcome back to QAV America. Tony, this is, uh, for new listeners. Welcome. We’re two Australian value investors talking about the American market. We’ve been talking about the Australian market for years. We’re like, let’s broaden our horizons. Let’s, let’s start investing in American stocks as well and applying value investing principles.

So each week on the show, we take a stock. That’s on our US buy list, and I do a deep dive into it. Let’s try and figure out why it’s turning up in our buy list, as we call ’em a pulled pork. But, uh, how have you been, Tony, since we last spoke 20 seconds ago?

Tony Kynaston: Thank you. Are we called QAV

Cameron: I,

Tony Kynaston: now? Is that, do we have to change our name? it’s no longer the Gulf of,

Cameron: yeah.

Tony Kynaston: it’s, or QAV.

Cameron: Yeah.

Tony Kynaston: QAV

Cameron: Well, originally we were, yeah, we were QAV Mexico, but then Trump said we had to change it to QAV America. Tony, a couple of weeks ago on this here [00:01:00] podcast, I did a deep dive on a company called Zep, Zep Health, Chinese Smartwatch Company. Within days of me publishing that their share price jumped up 400%.

Um, so I’m not saying I’m a genius. But, um,

Tony Kynaston: It’s

Cameron: some people say I’m the greatest genius who ever lived, so that was an interesting one. Um, they have. The this, this smartwatch technology that we talked about sounded pretty good, but apparently within a few days of me publishing that they came out and said that they expect the 30% year over year revenue growth growth for the second quarter of 2025.

This would be their first revenue increase in three years, and it was seen as a big turnaround. We did talk a lot in the Paul [00:02:00] pork about. Some of the structural things that they were doing and changing their branding. And, uh, they’ve also apparently signed a couple of prominent athletes, NFL running back, Derek Henry and Ultra Runner Rod Fava as brand ambassadors for a maze fit one of the brands that they market under.

On Amazon, which as I said, makes you think that it’s associated with Amazon, but it’s not. It’s just something they sell on Amazon anyway, so we don’t hold them.

Tony Kynaston: they had, low point price points, I think too, didn’t they? Which was their, one of their big

Cameron: Very low. Yeah. We don’t hold them, uh, in our portfolio. I wish we did, but our portfolio was full. We didn’t have any capital left to allocate to them or I would’ve bought them, but I did. Uh, the reason I found this out is I put together a spreadsheet just tracking the stocks that, uh, I’ve done a pulled pork on that we don’t hold in our official portfolio.

[00:03:00] And, uh, they’ve, some of them have done really well. Um, CX is up 49% since we talked about it at the end of March. That one Z is up 361% since we talked about ’em on the 11th of July. Some of the other big ones are Poco Holdings. Remember them? There was on the 1st of July. They’re up 20% since we talked about them on the 1st of July.

Precision Drilling Corporation we did at the end of June. They’re up 12% IHS holdings we did at the end of May. They’re up 18% Canadian Imperial and Bank of Commerce is up 16%. Uh, Dan OS Corporation is up. 13% Greek shipping company. The one that hasn’t done as well was NL Chile. It’s down 20% since we covered them in May, but the rest are all doing quite well since we’ve covered ’em on the show, which.

Is, you know, all jokes aside, just evidence of a couple of things. [00:04:00] Number one, the US market is kind of bonkers at the moment, so I think a lot of things are doing well over there. But also, you know, we are picking stocks that are, um, undervalued, doing good businesses that are undervalued, so we expect them to do well over time.

Tony Kynaston: and if you, I mean, it’s a kind of almost like a law of physics if you give. A lot of cash to good managers. They’re gonna invest it wisely and make money for shareholders. So, uh, that’s

Cameron: You hope?

Tony Kynaston: you hope. Yeah. All things being

Cameron: You hope?

Tony Kynaston: should happen. Yeah.

Cameron: Well, the stock that I’ve got for this week, Tony, is unusual in a couple of ways. Number one, it’s a NASDAQ stock. I think I said in last week’s show. We don’t tend to.

Tony Kynaston: Can you, whisper it to me before you announce it so I can. a four bagger this week. No, we don’t front run stocks. We should say that. We don’t. We don’t

Cameron: Yeah. What have you done?

Tony Kynaston: it. Yep.

Cameron: No, uh, it might be one of the ones that goes down 20% too. You dunno. [00:05:00] It’s a NASDAQ stock. We said last week that, you know, we don’t tend to get NASDAQ stocks a lot on our buy list. Technology stocks tend to be way too expensive for us, but this, for whatever reason, is an NASDAQ stock.

It’s also sort of a classic Berkshire type stock. Hmm.

Tony Kynaston: find it on the nasdaq, isn’t it? It’s, I couldn’t see the

Cameron: I dunno why it’s on the nasdaq.

Tony Kynaston: and this company. Yeah.

Cameron: No. Well, maybe when it floated back in 1995 it was. Anyway, the company is Seneca Foods, and I think if you’re a North American listener of this, you probably know Seneca Foods. I asked Chrissy, my American wife, Hey, you know Seneca Foods. She was like, yeah, of course. I was like, okay. Um, they, they distribute all around the world too, so I’m pretty sure we’ve bought.

Seneca Products had them here, but [00:06:00] they’re a, they’re a classic American company. Been around since 1949. Big into canning and food packaging. So beans, corn, fruit. Um. Anything that needs packaging. They’re the kings of packaging food and they’ve acquired a lot of different companies over the years. They’ve been around, but it’s, it’s, it’s like one of those classic Berkshire type businesses, unlike a lot of the companies that we’ve talked about in the last.

Few months, you know, like weird fracking operations and, and walking, um, oil wells and, and, and mobile phone towers in South Africa and smart watches in China, et cetera, et cetera. This is a boring food manufacturing business. And as I just said to you on an Australian show, I did have a question for you about it ’cause it is a little bit unusual.

It’s cashflow. Tri is a little bit unusual, but we’ll get to that [00:07:00] later. So their website, by the way, their tagline on their website is Farm Fresh Goodness made Great. I dunno if that’s a MAGA add-on. They’re making farm fresh food great again, or if they’ve had that pre maga, not sure

Tony Kynaston: Uh.

Cameron: but. The founding of it is a good story.

Founded in 1949 by a guy called Arthur Walcott, art Walcott, who had just graduated from doing a degree in, uh, business and economics at Cornell University in New York. He went to an auction in Dundee, New York. Uh, actually hadn’t graduated. He was a Cornell senior. He was looking for a good deal on a typewriter.

He ended up buying a bankrupt grape juice plant instead, which apparently did own at least one [00:08:00] typewriter. So you buy the bankrupt company and you get the typewriter thrown in kind of deal. He must have seen something in it. Because he took it over and I think the first year it did like a hundred thousand dollars in revenue.

Something small like that. Well, smallish but not bad.

Tony Kynaston: big

Cameron: And um,

Tony Kynaston: though.

Cameron: yeah, probably, yeah, would’ve been a lot. And he, but he turned it into an absolute monster company and he only passed away. In 2021, age 95, he was the chairman and president of Seneca Foods from 1949 to 1987, and then served as chairman of the board until he passed away at 95.

So yeah, he sort of reminded me of a Charlie Warren sort of guy, been around, run his thing, stuck to his knitting,

Tony Kynaston: it,

Cameron: a good

Tony Kynaston: out

Cameron: [00:09:00] solo visit. Yeah. Yeah, yeah. Um, in the 1950s, Seneca contracted with Minute Made to co-pack the first frozen grape juice in the United States. And today they produce canned, frozen, bottled fruits and vegetables sold under their own brand and also through major retailers, private labels.

In the 1990s, they did lots of act acquisitions and became for a period of time the world’s largest processor of canned vegetables. In 1995, the company went public. Today about 85% of their revenue comes from canned vegetables and fruits. The rest comes from pro frozen products, juices and snacks, and they have an EBITDA margin about 10 to 12%.

Um, I told you about Walcott. He was married to his wife Audrey for 72 years. [00:10:00] Married her and bought the bankrupt grape juice plant in the same year, 1949, while still a senior at Cornell. Got back from World War ii. Um, went and studied, married her, and did his thing. The CFO of the company is a Michael Walcott.

He’s also treasurer and senior vice president of the company. Not sure of the relationship, but judging by his photograph, I’m guessing he’s probably a grandson. Of the founder or maybe a very young son. Maybe he was, he and Audrey was still at it for a long time, and this guy’s his son, but he looks like he’s in his late thirties, early forties.

Read a bit from their 2025 annual report. Seneca is a leading provider of packaged fruits and vegetables with facilities located throughout the United States. Its high quality products are primarily sourced for more than 1,100 American Farms. The company’s product offering [00:11:00] includes canned, frozen, and jarred produce and snack chips.

Its products are sold under private label as well as national and regional brands that the company owns or licenses, including Seneca. Libby’s Green Giant, aunt Nelly’s, cherry Man, green Valley, and Reed. The company’s fruits and vegetables are sold nationwide by major grocery outlets, including supermarkets, mass merchandisers, limited assortment stores, club stores, and dollar stores.

The company also sells its products to food service distributors, restaurant chains, industrial markets, and other food processes. Export customers in approximately 55 countries and federal, state, and local governments for school and other food programs. Additionally, the company packs canned and frozen vegetables under contract packing agreements.

Seneca Foods Corporation conducts its business almost entirely in food packaging, which comprised 98% of the [00:12:00] company’s total net sales in fiscal year 2025. Uh, already said the breakdown before non-food packaging sales, which primarily related to the sale of cans, ends seed and outside revenue from the company’s aircraft operations.

Of course, why not rep, if you get enough tin cans, I dunno if you know this Tony, but you can make a plane. You get the tin cans

represented 2% of the company’s fiscal year 2025 net sales. So.

Tony Kynaston: Is that selling food to airlines to serve on the planes, or do they actually have an aviation

Cameron: they, yeah, they bought an airline. I saw that in the notes somewhere. I didn’t, I didn’t drill down. It was small. I, I, I’m guessing it’s for, you know, moving stuff. Like they have their own integrated airline. Yeah. Something. There’s my, my guess, but I didn’t get into it ’cause it’s such a small part of their business now this is also, this is from the [00:13:00] chairman’s.

Um. Report in their most recent annual report, fiscal year 2025 was challenging yet solid for Seneca Foods with net earnings of 41.2 million compared to 63.3 million the previous year. Major factors impacting profits include extreme weather during the planting and harvest seasons causing historically low crop yields.

And ongoing inflation pressures. Additionally, significant tariff related cost increases, particularly for steel tin plate added substantial expenses. The severe weather, especially in Minnesota and Wisconsin, resulted in just 70 to 75% of expected crop volumes, forcing plants to operate below capacity inflating unit costs.

However. Seneca leveraged plentiful inventories from 2023 to meet customer demand. Moving forward, the [00:14:00] company plans to operate at full capacity to rebuild inventories to normal levels. Steel tariffs remain a critical challenge. Since 2018, US domestic tin plate production capacity sharply declined forcing reliance on costly imports.

Recent tariff increases from 25% to 50% will further elevate costs, inevitably passed on to consumers. Despite these headwinds, overall unit volumes rose, nearly 6% boyed by strong performance and branded retail channels, including green, giant products and new innovations like canned pumpkin, which by the way, you ever tried to buy canned pumpkin in Australia

Tony Kynaston: haven’t, but we don’t do pumpkin pie, so I guess we don’t have much of it here. We don’t do,

Cameron: while? Well, I,

Tony Kynaston: Thanksgiving.

Cameron: I do make pumpkin pie

Tony Kynaston: good for you. Uhhuh,

Cameron: for Thanksgiving. For Chrissy every year.

Tony Kynaston: you are giving. [00:15:00] Thanks for Chrissy being here.

Cameron: I am. That’s exactly what I’m doing. Yeah. Yeah.

Tony Kynaston: you.

Cameron: And I’m giving thanks to her country for letting her escape 16 years ago and come to Australia. Um, uh, but yeah, it’s, it’s the one thing, I started it years ago. It’s like, um. My small attempt at uh, Thanksgiving was her favorite sort of holiday in the US and so I try and recreate a little bit by making pumpkin goodbye and I’m bloody good at it too.

But you over there they use canned pumpkin. We don’t have canned pumpkin here, so I have to get a real pumpkin and

Tony Kynaston: it up.

Cameron: it and puree it myself. Yeah. Yeah. It’s not a big deal, but yeah, you just can’t get tin pumpkin here. Chrissy’s always like, why is there no tint pumpkin in this country? I’m like,

Tony Kynaston: No

Cameron: We just have real pumpkin.

Tony Kynaston: Yeah.

Cameron: Yeah. Well, I mean, yeah, I guess pumpkin pie. I dunno what else you use tin pumpkin for, but yeah,

Tony Kynaston: could, uh, you could

Cameron: and pumpkin pie is a weird thing.

Tony Kynaston: scones, couldn’t you?

Cameron: It could. [00:16:00] Pumpkin pie is a weird thing if you’re not used to it. Like it took me a while to get used to savory dessert, you know? But I enjoy it now. I do a really low sugar one too.

I used to buy one. There was a place in Brisbane that sold them. I used to buy it, and then they went outta business. So anyway, I had to make my own.

Tony Kynaston: person who married an American. They’re like,

Cameron: No, you had to order like six weeks in advance. If you wanted a pumpkin pie for Thanksgiving. It was like boom, boom season for them. Anywho, uh, moving right along. Uh, tinned pumpkin. Yes. The snacks and glaze fruit segments had strong years through though tariff induced price hikes on imported ingredients like.

Pineapple and orange peel may impact future pricing. Seneca continues focusing on cost control, strong balance sheet management, debt to quality ratio at 0.62, and conservative liquidity strategies, positioning itself [00:17:00] to see strategic growth opportunities. The company maintains a robust workforce. I think they hire about.

27, 2800 people through competitive wages and significant investments in seasonal housing essential to sustaining operational efficiency. The president expressed confidence in Seneca’s long-term resilience, highlighting employee dedication and shareholder support, underscoring the critical role the company plays in providing nutritious, affordable food to consumers.

One of the things that he did talk about is inflation pressures in the US driving consumers towards more affordable canned products. So their, their unit costs are up because of tariffs, but they’ve, they’ve sort of integrated them into their pricing and, uh, they think more customers are gonna be buying canned foods as Trump’s tariffs make everyone go broke.

Um. There are,

Tony Kynaston: did the

Cameron: sort of a PR.

Tony Kynaston: say that?

Cameron: [00:18:00] No, that was, uh, I don’t wanna put words in his mouth, Tony. No. So why It’s cheap. Uh, you know, we’ve had a lot of crazy businesses that we’ve done Paul Porks on, um, over the last few months, and a lot of them are cheap for a lot of different reasons. This one. Hard to tell why it’s cheap from a value perspective, other than I think it’s just an old boring f.

Food canning business, which is again, why it, to me just screams like a classic Berkshire Hathaway kind of investment. It did have a rough couple of years, which might have hurt it. Um, as he said, you know, they had bad crops. They, they were, they lost money for the last couple of years. They had to really dig in and support the business.

Uh, they really had a great year in 2025, cashflow wise, profit wise, but it was [00:19:00] sort of a, a turnaround year, and I wouldn’t expect them to have that kind of year moving forwards. One of the things that they have done though, despite all of the challenges, is pay down nearly $300 million in debt. So that’s good.

It’s reducing their, um, interest expense slightly, but they’ve got a lot of compe, you know, a lot of mo type compe. Uh, competitive, competitive advantages. Huge scale, very strong and old retail relationships. Vertically integrated operations, which protect it from volatility and supply chain costs to some extent.

But it’s a mature industry. They don’t pay a dividend. They like to put the money back into the business, and they’re not sexy. You know, they, they don’t do, they don’t have an AI division, uh, they don’t have a chip manufacturing plant out the back. Um,

Tony Kynaston: stock promoting them.[00:20:00]

Cameron: no. Maybe we should, we should suggest that to them.

Tony Kynaston: QAV Meme Stock America.

Cameron: Yeah, well, just having it on this show is, is all it needs is Zep has proven, from a numbers perspective, the price to operating cash flow at the moment is 2.09. But this is what I wanted to ask you about. So I mentioned this earlier, so if I go over and look at their numbers in stock Edia, if I look at their operating cash flow from the last five years, so 2025, full year ending March, 2020 5, 330 5 million.

If I go back to 2024, it was negative 83 million 2023. It was negative 213 million. 2022. It was plus 30.2 2021 plus 180 3 and 2020 plus 1 [00:21:00] 27. So it’s been a choppy five years. And the 3 35 is, is like the best year they’ve had in 10 years by a long shot. So I don’t expect them to do that again year after year.

I mean, they’re not generating $335 million a year in cash flow. So whether or not their Pr/OpCaf priced operating cash flow will look as good a year from now or would’ve looked as good a year ago, probably not. But it does look that good right now. And so the one question I wanted to ask you is, if you’re looking at a company like this that’s had a rough couple of years, turned it around, had a really good year, but you know, and they’re forecasting that that won’t look like that forever.

Do you discount the really good year or do you say a really good year is a really good year? And we’re looking at today’s numbers [00:22:00] and that’s good enough for me.

Tony Kynaston: That’s exactly what I do. Um, again, this idea of if, if it’s a one-off year, um, look, I look, I might, I might pay attention if they sold something, for example, and that was. Uh, for some reason the assets went into cashflow. Doesn’t always do that. Usually goes into the balance sheet, but there could be some cases where they sold something, which did, um, that might sway me not to.

But look, if they can generate this cashflow and they’ve through some bad years, which is probably the right time to buy them, frankly. Uh, ’cause it’s not like. Um, if they’ve been through the bad years and they’ve survived and now they’ve had a good year, that says to me that, uh, they can withstand bad years.

And, um, so it’s, it’s, you know, buying when the going gets tough and then waiting for it to get better. And, uh, I take your point, this is a one off year for whatever reason. I think you mentioned off air that might’ve been because of inventory flows were a bit unusual. This year. So, [00:23:00] again, that might not happen in the future. Uh, but, but generally, like, it’s the, it’s not quite a law of physics, but you’ve got a company and it’s thrown off a lot of cash and the company is been around for a long time, it’s not gonna go broke. It’s got, as you say, moats. It’s pretty integrated into its industry. Um, and it’s got good management.

Um. it’s either the son or the grandson or the founder. So they probably learned a lot about the industry along the way. Giving good, giving a high amount of cash to someone, like that’s probably a good recipe for them to invest it wisely. Uh, and so yeah, it might be a one-off, but yeah, if they could put that back into the business, they’re gonna grow sales, I would’ve thought And improve the business, or as you say, pay down debt. To improve the balance sheet. So I’m, I’m happy taking the one off cash bump, and, and not discounting it, you know, based on an average over a number of years or something like that.

Cameron: Hmm. [00:24:00] Good. Well, I’m glad you feel that. Way, um. Some of the other numbers I said they’re not paying a dividend yield. Uh, the F score is a six, so that’s pretty good. Um, I wanted to just look at the Wikipedia numbers. They give them a quality ranking of 68. A value of 94, momentum of 68 and a stock rank of 93.

So from our perspective, pretty solid stock edia numbers. If you look at the five year chart, uh, it’s been going up in a straight line since it bottomed out in the middle of 2023. Middle of 2023 was trading at $32, and today it’s around $102, just north of $102. So. Great time to buy. It would’ve been

Tony Kynaston: Hmm.

Cameron: middle of 2023.

It’s gone up 300% since then, give or take. Uh, but despite [00:25:00] that still comes in very, very solidly with our numbers. Um, I’ve got some more quotes here before I get into the deep, deep before I get into the scoring. Um, let’s see what I’ve got here. The turnaround was driven by normalizing inventory levels, reducing working capital, drag and full monetization of the 2023 pack inventory that got them through the disastrous 20 12 20 24 season in FY 2023 and 2024 inventory built up.

Buildup inventory buildup ate cash. But in 2025, they flipped that around 325 million realized from inventory alone, which was the biggest single driver of their cash surge. So it wasn’t magic, it was just they had the inventory and they pulled it out and they sold the crap out of it. So that’s good business, right?

Tony Kynaston: [00:26:00] said prop calf was two, something like that, wasn’t it? Two times,

Cameron: Mm-hmm.

Tony Kynaston: even if, even if we average it over the good year and the bad year, and say you know, we should look at an average cashflow. It’s still gonna be a low prop cap. It’s still gonna be four or five times, I would’ve thought.

So it’s still,

Cameron: Low seven. Yeah.

Tony Kynaston: it’s, it’s below seven.

Cameron: Yeah. So not necessarily repeatable, that inventory reduction is a one-off event as they cleared stock, but it does, as you said, Lindsay puts ’em in a strong cash position where they can. Fund plant capacity or new acquisitions and they, they run a very tight operation debt wise as opposed to some of the businesses we’ve talked about recently carrying a lot of debt.

So let me crack into some of the other numbers. Um. They don’t have a qualified audit. I check their most recent annual report. Positive Market sentiment has been for quite some time. [00:27:00] Average daily trade is about 6 million. So good liquidity for pretty much everyone. Price, fiber and cash flow 2.0. Six 2.09, something like that.

Quality rank is a 68 outta 60, uh, sorry, a 68, which is above 60. So we give it a score for that. Stock rank is a 93, which is above a 90, so we score it for that. The F score is a six, so we score it for that. Priced, uh, is not less than intrinsic value number one. Our intrinsic value number one is $30 25. The price is around about 102, so it doesn’t score for IV one.

There’s no forecast. EPS doesn’t have a lot of broker coverage, surprisingly to me ’cause it’s such a old and relatively large business, but no forecast EPS. So we don’t have an IV number two. Price is above the book, but lower than book plus 30. [00:28:00] Book plus 30 is about 119 and the price is about 102. So I did score it for that.

It does have positive book value growth, it pa over the last few years. So it passes for that no dividend. So it doesn’t, uh, get a score for that. And the directors, from what I can tell, the CEO and the COO combined on about 6%. So less than the 10% that we want to score them for that. But all up they get a quality score, a QAV quality score of a hundred percent, 10 outta 10, uh, and a QAV score of 0.48.

So very good QAV score. So that is Seneca. S-E-N-E-A is the ticket code. They just couldn’t fit the.

Tony Kynaston: See.

Cameron: CI couldn’t fit the C in. I tried, couldn’t get it in. How much do you know [00:29:00] about Seneca? The, well, the Seneca, the, the older or Seneca? The younger.

Tony Kynaston: Uh, about as much as I knew about Seneca Food before you told me about it.

Cameron: Well, I know quite a bit about the Senecas because you know, with the Caesar show that I do, we’ve talked a lot about, particularly Seneca, the younger Seneca, the elder, the father was, uh. Uh, philosopher slash rhetoric ion in ancient Rome lived through the reigns of Augustus Tiberius and Caligula, and, uh, you know, had a relatively interesting career and, uh, wrote a lot of interesting works that have, uh, survived, some of which have survived.

But his son is the more interesting one. So his son was a very famous, stoic. Philosopher and was tutor to the Emperor Nero when he was a young lad. Hired to be his [00:30:00] tutor. And then when Niro became emperor, when he was, uh, 20 18, 20, something like that, Seneca became his advisor and basically ran the government for the first five years of Niro’s Reign, which is known as the golden years.

Um, it was, everything was great, everything was going well, and then. Niro turned on him and Seneca also got himself into a bit of trouble. There was, uh, rumors of him sleeping around with people he shouldn’t have been sleeping around with, and there were suggestions that he was involved in some sort of treasonous plot and, uh, I think he ended up having to, um.

Kill himself. He had to commit suicide. But uh, yeah, like a really interesting guy who tried to write [00:31:00] the situation in Rome in the early part of the empire.

Tony Kynaston: Okay.

Cameron: tried to bring a civilized approach to government for the first time since the death of Augustus. Really? And, uh, I dunno which one these guys named themselves after, but it, I assume the younger, but interesting to me when,

Tony Kynaston: no.

Cameron: Hmm,

Tony Kynaston: Tin food in the Seneca household. In Rome.

Cameron: yeah, yeah, they did, they did have ways of storing food, but. Uh, the company that we just talked about on the Australian show was called bgan. I guess after Rajni, these guys are called Seneca, I assume, after the stoic philosopher. So interesting. When you see companies that have deliberately chosen a very deliberate name, you imagine, to represent what they stand for in some way.

Tony Kynaston: did wonder if they were based in Seneca, [00:32:00] New York, which is a town named after Sydney, I would think, but they may have just named it after the

Cameron: Uh, interesting. Well, they were based up somewhere around upstate New York, so yeah, it could have been, could have just named themselves after that. And I’m reading too much into it. Alright, well that took the wind outta my sails. Thanks. Uh.

Tony Kynaston: hypothesizing. I, I don’t know.

Cameron: I dunno either. Anyway, check him out. Um, that’s, uh, Seneca, what do you think after all of that, Tony, as an investment?

Tony Kynaston: as we said before, a lot of people wouldn’t get excited by that, but I thought it was a great, a great, uh, thing to pull apart when, uh, I saw it on the notes before the show. I got excited. It’s a kind of classic value business. Long history. The founders passed on, but the family still involved, so a lot of history in managing it. of moat and a lot of cash. Buy at two times cash flow. I’d be snapping it up if I was in the us.

Cameron: You know, I, [00:33:00] you know, I follow the value investing subreddit and I, I see people post all the time on there that there’s no value buys left in the US they’re all talking about Google as being the value buy and that nothing’s left. Everything’s priced to perfection because of everyone’s got all the data and all the information.

And we are finding these companies week after week that, uh, have. Just great, great numbers from our perspective. Like every week, I’m, I,

Tony Kynaston: Niagara

Cameron: I never struggle.

Tony Kynaston: Yeah.

Cameron: Yeah. Like the, the, I did a new buy list for the US market, uh, yesterday and on the buy list, the final version of the buy list, there is 54 companies. That, um, you know, some, we’ve already talked about, some we already own.

There are some big brands like Vodafone, uh, Hertz, which I think we’ve talked about [00:34:00] Hertz before.

Tony Kynaston: did.

Cameron: Um,

Tony Kynaston: outta bankruptcy, or it

Cameron: of the,

Tony Kynaston: going into bankruptcy when we spoke about it years ago.

Cameron: hmm, don’t remember. United Airlines are on their, uh, shell. Is on there, Avis is on there. Um, so some very, very big brands on there, which you’ll be interested to drill down into. But then a lot of other companies, Methodex, A DO, ATCO, agro, a lot of financial companies. As we’ve said before, Waterstone Financial, synchrony Financial Up, FinTech holding.

O’Reilly Automotive, some of the other ones we’ve talked about. Uh, yearend Digital, I think I’ve talked about them. I looked at them. Stealth Gas is still on there. Mammoth Energy Services, who I nearly did. Um, by the way, their share code, their ticket code is Tusk, which is,

Tony Kynaston: Named off the

Cameron: I dunno what that’s got to do [00:35:00] with.

Tony Kynaston: yeah.

Cameron: Yeah, you would think so. But I think it’s named after the mammoth in their name. But it’s a pretty cool name. Tus pretty cool ticket code, but it’s just like over 50, over 50 companies on the buy list that, um, so there’s, there’s, there’s plenty of choice if you’re looking for value buy in the US

Tony Kynaston: And, we draw a, a reasonably arbitrary cutoff for the buy list too. So

Cameron: Yes.

Tony Kynaston: a more loose definition of value. You can find hundreds on the list, probably.

Cameron: So for new listeners, um, we have a cutoff of a 0.1 QAV score, but the reason we have that is just so we have a cutoff. Right. It was very arbitrary

Tony Kynaston: it gave

Cameron: when you came up with it.

Tony Kynaston: a list that we could easily manage and we’d always find something to buy, but it wasn’t too big to be unwieldy. Yeah.

Cameron: Yeah, but if I, um, like, okay, so if I. Look at my overall scoring sheet and go [00:36:00] down lower than that. Yeah, there’s hundreds.

Tony Kynaston: And if you

Cameron: yeah.

Tony Kynaston: once there’s, there’s about three and a half thousand, maybe 4,000 stocks on the US market. So if you took the top decile 400 stocks, you could, you

Cameron: Yeah.

Tony Kynaston: say there’s four. Stocks on the value buy list if we just kept going down the list until we had 10% of all stocks from a value ranking perspective.

Yeah.

Cameron: Yeah, so I don’t know why these people can’t find value stocks in the US market. ’cause I find ’em every week.

Tony Kynaston: And they go up, you said, and the portfolio’s been doing well too.

Cameron: oh yeah, I have, well, I haven’t done, uh, I should just do that before I go do an update on, uh, the, our US portfolio. Um.

 Well

Tony Kynaston: But it is

Cameron: in the last,

Tony Kynaston: you saying that you can’t find value stocks. I mean, Warren Buffet said it all the time too, that he’s been teaching this stuff for 50 or 60 years [00:37:00] and he still finds things to buy. Uh,

Cameron: yeah, so, um, our, our portfolio in the US has been running since September, 2023. It’s up. 59, 60% over that period of time versus the s and p 500, up about 43% in the last year. It’s basically been tracking just slightly, well, at the moment it’s about a little bit north of the s and p, it’s up about 19% versus the s and p 500, up about 17%.

Going back to going back six months ago, we were up 40% for that period versus the s and p up 10%. But Trump’s tariffs have played havoc with our portfolio, but it’s still beating the index for the last 12 months. Um, but the last six months it’s come down quite a bit, but some of our stocks are, you know, doing very well.

Willis Lease Finance Corp was up [00:38:00] 300%. It’s now up 200%, so it’s come down a bit in, in the last few months. Um, Euro Seas is up 84% since we bought it in over International is up 75% Foreign trade. Bank of Latin America is up 65%. Optimum Bank Holdings is up 40%. Regional management is up 37%, so they’ve all, you know, mostly doing very well.

NL Chile is the one that’s down out of all of them. It’s the only one that’s down. It’s down nearly 20% since we bought it, but, uh, I might have to get rid of it.

Tony Kynaston: getting close to a rule one then.

Cameron: Yeah, but lots of opportunity

Tony Kynaston: Yeah.

Cameron: market if you know where to look.

Tony Kynaston: Definitely, and you don’t get distracted by meme stocks, or you don’t get distracted by crypto or, um, anything else?

Cameron: Yeah, right. Thank you, Tony. That’s QAV America for this week.

Tony Kynaston: have, a good week, cam. Thank you.

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