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:RELY) Remitly: X-Border Digital Remittance Winner

Remitly is poised to become the global leader in cross-border digital remittances. While consistently gaining market share from traditional players like Western Union and MoneyGram, the ongoing shift from cash-to-cash remittances to digital transactions provides a significant tailwind. Although the company is only recently projecting positive cash flows, scale economics for digital remittances are attractive. As their volumes grow, they will continue to renegotiate lower variable costs and spread their fixed costs over a much larger customer base.  Their digital solution, infrastructure, and fraud detection capabilities are...

    • Initiation Price: $25.22
    • Upside: 100%
    • Current Status: Open

(NAS:RELL) Richardson Electronics: A Niche Specialist

Richardson Electronics (‘RELL’) is a distributor that provides engineering solutions through systems integration, prototype design, and manufacturing. It is a distributor that acts as an extension of both a company’s salesforce and engineering force. In the last couple of years, RELL has seen rapid success with its new Green Energy solutions with offerings such as power management for ultracapacitors and electric train batteries. This segment has gone from $10mm to $50mm in the span of 3 years, representing 20% of revenues. The long-term trends of green energy should continue to benefit RELL as the number of...

    • Initiation Price: $12.59
    • Upside: 50%
    • Current Status: Closed
    • Result: +10%

(NYSE:WU) Western Union: Significant Potential or Irrelevant Relic?

Our research into Western Union initially sparked excitement due to its globally recognized brand and recent ~50% decline in stock value due to increased pessimism surrounding its longevity. Our gut feeling was that their sizeable digital offering was overlooked and disruption fears were overblown creating a potential opportunity for long-term oriented investors. Additionally, it seemed likely that actions Western Union had taken to reduce fees due to competition had passed its inflection point. However, upon conducting a thorough analysis, we realized that predicting Western Union's market share over the...

    • Initiation Price: $12.18
    • Upside: Neutral
    • Current Status: No Position

SES imagotag ::UPDATE:: HOLD

SES is up more than 40% since our update to add to the position. We believed there were numerous fallacies in the first report, and it was corroborated by management and auditors. Their responses to the short reports are available on SES imagotag’s IR page. The response of the company was empirical and emphatic. The short seller wrote a second report and we wrote a response to some of the points below. SES imagotag also responded yesterday to the short report in the same manner as the first and it can viewed here...

    • Current Status: Closed
    • Result: +185%

(NYSE:TITN) Titan Machinery: A Giant Amongst Dealerships

Titan Machinery ("TITN") is the leading dealer of CNH Industrial equipment ("CNHI"), boasting a network of approximately 120 dealerships spanning the globe. CNHI is the second largest agricultural original equipment manufacturer (OEM) worldwide, ranking behind industry giant John Deere. Titan Machinery operates its dealerships predominantly within the United States, offering a comprehensive range of CNHI equipment complemented by dedicated parts and service provisions. These dealerships function on a semi-exclusive basis with CNHI equipment. TITN has undergone significant operational changes over the...

    • Initiation Price: $29.50
    • Upside: 30% /
    • Current Status: Closed
    • Result: -15%

SES Imagotag ::UPDATE:: ADD

There was a short report issued on SES imagotag on June 22nd, causing the share price to plummet 60%. We think this presents a good buying opportunity and are long SES imagotag. For background, SES imagotag has both Deloitte and KPMG auditing their books over the last 6 years (France requires that public companies are jointly audited). This is not to say that makes SES infallible, but we think it’s relevant as companies with misleading financial statements/fraudulent generally are audited by no-name firms coupled with frequent auditor changes...

    • Current Status: Closed
    • Result: +185%

(NAS:ZUMZ) Zumiez: Old School Retail

Zumiez is a lifestyle retailer that has sold off 70% from 2021 highs due to recessionary fears surrounding discretionary companies and small caps. Despite facing several short-term macro and micro challenges, such as recessionary pressures and competition aggressively discounting bloated inventories, Zumiez has a proven track record of surviving and thriving through business cycles. They achieve this by selling exclusive apparel that customers want, managing inventory effectively, employing minimal to no leverage, and negotiating intelligent leases. The company has successfully executed these strategies for over 40...

    • Initiation Price: $16.07
    • Upside: 70%
    • Current Status: Closed
    • Result: +11%

(NYSE:CPRI) Capri Holdings: Luxury in Limbo

Capri Holdings is a fashion company that owns brands Michael Kors, Versace, and Jimmy Choo. Capri Holdings began as Michael Kors which exploded onto the accessible luxury scene in the early 2000s, rapidly taking share from incumbents such as Coach. However, Michael Kors expanded into retail and wholesale channels too rapidly resulting in brand dilution. Long-time CEO John Idol is committed to restoring Michael Kors to a more premium brand by using a similar playbook executed by peer fashion brand Coach: increasing quality and marketing spend, reducing store footprints, and subsequently...

    • Initiation Price: $41.50
    • Upside: Neutral
    • Current Status: No Position

(NYSE:GIL) Gildan Activewear: Printwear Leader But Waiting for Better Entry

Gildan is the largest manufacturer of low-cost basic apparel for the Printwear industry (see appendix below for industry primer), producing roughly 1.2 billion shirts per year. This is a company with a durable manufacturing advantage that we will own if the opportunity presents itself, but we are holding off for now and assigning Gildan a neutral rating. We believe their Printwear segment is vulnerable to a slowdown in unit sales within the next 12-24 months and their Branded Products segment, sold through brick-and-mortar retailers, is in a secular downtrend. Gildan’s culture is optimized for manufacturing...

    • Initiation Price: $33.2
    • Upside: Neutral
    • Current Status: No Position

(NYSE:NRP) Natural Resource Partners: Royalties With Protected Downside

Natural Resource Partners is an MLP that owns the mineral rights to roughly 13mm acres in the Appalachia Basin and Wyoming. Currently, their primary natural resources are thermal and metallurgical coal. Given the low-cost business of collecting royalties with a protected downside, an ownership stake in a low-cost producer of soda ash, and potential upside in carbon capture, we believe NRP is undervalued by at least 30%. Although coal is a dying industry, there are pockets of resilience that should prove durable for the near term, namely metallurgical coal production...

    • Initiation Price: $57.01
    • Upside: 30%
    • Current Status: Open