Great article! Fascinated by the calculations on time to terminality on the NOLs - never considered trying to attempt this as I am skeptical about reasoning to any normalized earnings for this business given its profile. Simply put, I see a position in PNP as a bet on management quality and disposition in the VMS niche.
Correct. At these levels you are betting on them managing their positions better than an index. But, on rare occasion, you can even travel through time and by their portfolio below their own cost. This is a nice safety margin to have.
Just got round to this. Many thanks - very impressive & thorough.
The big question for me right now is about Damien Leonard. There doesn't seem to be much information about him. My instinct is that, without a lot more comfort on this, it can be dangerous to back the 'son of a Jockey'. Of course there are exceptions - the Dumas family have done well at Hermes, and there are some great dynasties in India. But right now, I have seen no information that would make me want to entrust my capital to him for the next 10 years.
At least available history of Pinetree speaks to his name. In 3 years, you will have a decade of track record (and what a decade it was). I am not betting on him because of who his father is, but simply based on results I see, and the sphere where Pinetree is focused. There is much value to be uncovered in special situations, and SaaS world is full of them now, but I have far less time and capacity to do it on my own than people in Pinetree. So I delegated at an opportune moment, below the cost of their portfolio. At the end, it is a matter of personal comfort. You should not invest in them, as most likely you would feel the urge to sell them in the next downturn due to lack of trust.
Thanks for your thoughts. Agreed. And you got in at a good time. I own SGN, so fish in similar waters - I suspect I may end up going through the Pinetree portfolio for ideas.
From their annual MD&A. During quarterly updates, sometimes they leave clues if some positions are reduced, increased or sold out. In some cases, SEC disclosures also help identify them, like TruBridge in 2024.
They disclose it in their annual MD&A. Apart from that SEC filings sometimes help during period between year ends. Quarterly MD&A give clues on sales or additional purchases of existing holdings.
Excellent!
Excellent deep dive. Legend!
It is just one way of looking at it. I could be wrong on so many things though.
Great stuff. Thanks for sharing!
"(I would guess six Leonards are involved)"
While that's possible, my guess was that "L6" meant "L + 6 letters" or "Leonard", kind of like A16Z means "AndreessenHorowitz"
Makes sense. Could have helped me to avoid an odd question to one of colleagues of mine from France, if L6 means something to him. 😉
Great article! Fascinated by the calculations on time to terminality on the NOLs - never considered trying to attempt this as I am skeptical about reasoning to any normalized earnings for this business given its profile. Simply put, I see a position in PNP as a bet on management quality and disposition in the VMS niche.
Correct. At these levels you are betting on them managing their positions better than an index. But, on rare occasion, you can even travel through time and by their portfolio below their own cost. This is a nice safety margin to have.
Awesome
Just got round to this. Many thanks - very impressive & thorough.
The big question for me right now is about Damien Leonard. There doesn't seem to be much information about him. My instinct is that, without a lot more comfort on this, it can be dangerous to back the 'son of a Jockey'. Of course there are exceptions - the Dumas family have done well at Hermes, and there are some great dynasties in India. But right now, I have seen no information that would make me want to entrust my capital to him for the next 10 years.
At least available history of Pinetree speaks to his name. In 3 years, you will have a decade of track record (and what a decade it was). I am not betting on him because of who his father is, but simply based on results I see, and the sphere where Pinetree is focused. There is much value to be uncovered in special situations, and SaaS world is full of them now, but I have far less time and capacity to do it on my own than people in Pinetree. So I delegated at an opportune moment, below the cost of their portfolio. At the end, it is a matter of personal comfort. You should not invest in them, as most likely you would feel the urge to sell them in the next downturn due to lack of trust.
Thanks for your thoughts. Agreed. And you got in at a good time. I own SGN, so fish in similar waters - I suspect I may end up going through the Pinetree portfolio for ideas.
Great description that requires a lot of work. Thank you.
Where did you find the companies that they have in portofolio?
Excellent deep dive! Thank you! Where did you find the tables with Pinetree's holdings?
From their annual MD&A. During quarterly updates, sometimes they leave clues if some positions are reduced, increased or sold out. In some cases, SEC disclosures also help identify them, like TruBridge in 2024.
Thank you for this excellent write up.
They disclose it in their annual MD&A. Apart from that SEC filings sometimes help during period between year ends. Quarterly MD&A give clues on sales or additional purchases of existing holdings.