Research Vault

  • All Initiation Reports have the price at initiation and upside potential listed
  • Bias towards small and mid capitalizations; sector agnostic; about 90% U.S. & 10% Foreign names
  • Each "Open" position will be sized between 5%-15% in the Pernas Portfolio
  • All closed positions will have the performance result listed
  • About 40% of Pernas Research's Initiation Reports receive a "neutral" rating. Read about why we publish neutrals here

(NAS:SGH) Smart Global Holdings: Pivoting to an AI Specialist

Smart Global Holdings is made up of three subsidiaries and although the company’s past shows a diversified holding company, it is now evolving to an operating one. SGH is in the early innings of their turnaround, namely focusing the company on High Performance Computing (HPC) around their brand Penguin Solutions (this will also be the name of the company in the near future). While we are optimistic about the company's prospects, we require further evidence of execution of their HPC segment along with increased enterprise adoption of AI solutions, either on-premise or at the edge, before considering

    • Initiation Price: $20.95
    • Upside: Neutral
    • Current Status: No Position

(NAS:UPWK) Upwork: The Undervalued Giant in Freelancing

Upwork (UPWK) is a global leader in the online freelance marketplace, offering a platform for businesses and independent professionals (aka freelancers) to connect and collaborate. The stock has declined by ~85% from its highs, due to concerns over slowing growth and fears of AI disruption. However, our analysis shows that these concerns are misplaced. The slowdown in growth is driven by temporary cyclical factors, and the long-term trend of businesses increasingly relying on skilled freelancers is set to continue. The market perception is that the business case for Upwork is weakening when in fact it is strengthening...

    • Initiation Price: $9.64
    • Upside: 70%
    • Current Status: Closed
    • Result: 66%

(NYSE:PATH) UI PATH: Automating or Getting Automated Away?

PATH specializes in developing automated workflow systems for companies. It boasts over 11k customers including 80% of the Fortune 10 and 61% of the Fortune 500. Their customers span industries and include Adobe, Applied Materials, Chevron, CrowdStrike, CVS Health, and Uber. As enterprise spending has slowed and the threat of Gen AI has introduced obsolescence risk, PATH has dropped approximately 80% since its IPO in 2021. However, we believe that generative AI can enhance PATH's future prospects by significantly boosting business automation workflows. PATH can capitalize on its existing enterprise ...

    • Initiation Price: $12.17
    • Upside: Neutral
    • Current Status: No Position

Burberry ::UPDATE:: ADD

We added to our Burberry position (LSE:BRBY). Burberry is down roughly 45% since our initiation report in February, with today marking a 16% drawdown on the news that the CEO is stepping down on the heels of another bad quarter (same store comps were down 20% yoy and the dividend was cut). When Akeroyd came to Burberry, the strategy was to go upscale to take advantage of the brand heat generated by the new creative director Daniel Lee. The strategy proved aggressive- their core customer was squeezed by both deteriorating financial conditions and higher priced items. Under the new CEO Joshua Schulman...

(NAS:XMTR) Xometry: The Future Digital Manufacturing Leviathan

Xometry (NAS:XMTR) is the leading disruptor in digital manufacturing, connecting businesses needing custom parts with a global network of manufacturers capable of producing those parts. Their platform reduces high search costs, long lead times, and quoting frictions typically associated with hiring smaller (non-contract) manufacturers. Like most class of ’21 IPOs, Xometry came to market too early and at too high a price, which has contributed to a near 85% sell-off since highs. Sentiment has soured, and the market is being overly punitive regarding Xometry’s business fluctuations and even mischaracterizing its...

    • Initiation Price: $11.33
    • Upside: 60%
    • Current Status: Open

(NAS:AGX) Argan Inc: Powering America

Argan, Inc. is a prominent engineering, procurement, and construction (EPC) company, primarily operating through its subsidiary, Gemma Power Systems, which specializes in designing and constructing natural gas power plants. Clients engage Argan, Inc. to deliver turnkey services, encompassing the entire process from design to procurement and construction of these plants. Currently, natural gas plants account for approximately 43% of the United States' energy production, a significant increase from 30% a decade ago. Despite the growth in natural gas usage, its future in the U.S. remains uncertain due to the rising adoption ...

    • Initiation Price: $70.63
    • Upside: Neutral
    • Current Status: No Position

Remitly ::UPDATE:: ADD

We had added to our Remitly position (NAS:RELY). Remitly reported its earnings yesterday after the market closed. Despite posting a solid earnings report, the market responded negatively, sending the stock down as much as 23% in after-hours trading. As I write, RELY is trading at $15.35, marking a new 52-week low. Some analysts have pointed out a slight/tiny revenue miss, but all metrics were within the range management had anticipated. The management team continues to execute on their growth strategy, and the business is scaling as expected. Critics may point to high stock-based

(LSE:CARD) Card Factory: Unwrapping the Potential

Card Factory, a leading UK-based, vertically integrated retailer of greeting cards and a significant seller of celebration essentials and gifts (balloons, party supplies, picture frames, stuffed toys, etc.), has cultivated a strong brand identity by excelling in value, quality, and selection. Despite competitors possibly matching them on two of these dimensions, it's highly unlikely any can surpass Card Factory across all three. Card Factory is in a position to earn high returns on capital for many years to come. Volumes of the greeting card market are set to remain flat or be in slight decline, and the market is viewing Card Factory as a ...

    • Initiation Price: £1.08
    • Upside: 50%
    • Current Status: Open

Rex American ::UPDATE:: CLOSED

We have exited out of Rex American (NYSE:REX). REX is up 50% since our initiation report (here). We stated that there was ~50% upside in the report. REX is one of the best-run ethanol producers in the US. REX has never lost money in the last decade despite volatile commodity cycles and generated record profits in 2023 due to high crush spreads. Contrast this to other publicly listed competitors such as Alto and GPRE that floundered despite a favorable environment. Although we believe the management team is superb, our reason…

    • Current Status: Closed
    • Result: +50%

Doc Martens ::UPDATE:: ADD

One of our core positions, Doc Martens (LSE:DOCS), dropped 34% today before slightly recovering a few percentage points to close down 29% on the day. The market responded to two significant announcements:

1. DOCS issued a trading update forecasting a challenging year ahead for wholesale revenue in FY 2025, continuing the difficulties faced in FY 2024. The market had anticipated better news on the wholesale front. Additionally, the company has experienced single-digit inflation in its cost base, which will not be passed on to consumers in the form of higher prices.