Research Vault

  • About 80% of Pernas Research's Initiation Reports are “buy” and the rest are "neutral"
  • 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 "buy" will have a position size between 5%-15% in the Pernas Portfolio

(NAS:SMED) Sharps Compliance: An Operator In The Medical Waste Industry

Sharps Compliance (NYSE:SMED) collects and disposes of medical waste; this includes everything from unused medication to used syringes. SMED has received tailwinds from COVID as the vaccines have effectively doubled their medical waste from its two biggest clients, Rite Aid and CVS. We believe SMED is an interesting and simple candidate to research as part of our dive into the waste industry as there are only two medical waste players- Stericycle and SMED. This duopoly is dominated by Stericycle, the 1000 lb gorilla which has revenues 20x greater than that…

    • Initiation Price: $6.85
    • Upside: Neutral

Iteris ::UPDATE:: CLOSED

We have closed out ITI for a loss of 14%. The thesis for ITI was that due to their business footprint with thousands of government transportation offices across the country, they would directly benefit from the upcoming infrastructure bill. Our estimates turned out to be too optimistic about the size of the infrastructure bill and the subsequent uplift in demand that would result. Forecasting regulation is always an opaque exercise. In the taxonomy of investing errors, ITI would fall under "overpaying".

(NYSE:DLA) Delta Apparel: Printing Apparel And FCF

Delta Apparel (DLA) is a vertically integrated apparel company that is composed of three segments: a manufacturer of basic and private labels, apparel brands, and most recently a Direct to Garment (DTG) fulfiller for brands and retailers. DLA has leveraged its competitive advantages from being a vertically integrated apparel company towards DTG so that it can supply printed custom shirts to brands and retailers in a faster and cheaper fashion than competitors. Given the rapid rise of DTG and DLA’s competitive position in this industry, DLA has about one hundred…

    • Initiation Price: $29.51
    • Upside: 70% [[**Closed 2/1/2022**]]

(PAR:SESL) SES Imagotag: The Dominant Player Digitizing Retailers

The global retail sector is gargantuan, with about $30 Trillion in sales, the US makes up about 15% of this. The retail sector has been facing both revenue and margin compression as it is squeezed by rapidly growing e-commerce players. The future looks bleak unless the retail experience fundamentally changes. The digitization of retailers is looking to be the solution. It has the potential to increase revenues and margins for retailers while bettering the customer experience, a win-win. As this industry evolves, there will be a blurring between the retail…

    • Initiation Price: €48.95
    • Upside: 100%

(NAS:ITI) Iteris: A Niche Within A Niche

Iteris is a transportation company that is a vertically integrated provider of hardware, software, and consulting services to the signalized intersection industry. They have their hardware in nearly thirty percent of the signalized intersections in the USA and process petabytes of traffic data per day. ITI is leveraging its hardware footprint and long-term adviser relationships with thousands of municipal agencies to upsell its innovative SAAS offerings. ITI has recently positioned itself as a pure-play transportation company and is well poised to ride the USA’s needed infrastructure upgrade and the coming…

    • Initiation Price: $6.37
    • Upside: 70% [[**Closed 9/16/2021**]]

Channel Advisor ::UPDATE:: CLOSED

We sold ECOM for a gain of 22%. Our thesis was that channel managers would continue to be prevalent for retailers and DTC brands as it was in their interest to spread a “fishing net” as wide as possible. We believed the e-commerce trend had been accelerated due to COVID and as the leading channel manager, Channel Advisor would stand to benefit. However, recent data suggests that e-commerce has not accelerated ten years into the future, but instead only 1-2 years. Along with Shopify becoming a more existential threat and…

(NAS:AOUT) American Outdoor Brands: An Undervalued Spinoff

American Outdoor Brands spun off from Smith and Wesson in July of 2020. AOUT is composed of both outdoor and gun accessory brands. Due to COVID and the subsequently accelerated affinity for outdoor activities, about half of AOUT’s brands have experienced triple-digit growth yoy. Given AOUT’s strong brands and their success in e-commerce and DTC, we believe AOUT is in a terrific position to take advantage of the record number of hunters and campers that have recently entered the market. Background AOUT is composed of an assortment of brands that…

    • Initiation Price: $19.4
    • Upside: 70% [[**Closed 11/30/2022**]]

(NAS:ECOM) ChannelAdvisor: The De Facto Channel Manager

Due to COVID, the e-commerce environment has accelerated about ten years into the future. We believe that with the reduced churn rate and more relevant offerings, ChannelAdvisor (ECOM) is poised to take advantage of the more competitive e-commerce environment. Background ChannelAdvisor is a market-leading channel manager that enables brands and retailers to integrate, manage and optimize their merchandise sales across a hundred plus online channels including Amazon, Etsy, Shopify, Google, eBay, Walmart, Facebook, and many more. ECOM offers solutions such as marketplace integration, analytics, digital marketing, inventory management, and drop…

    • Initiation Price: $18.57
    • Upside: 60% [[**Closed 2/26/2021**]]

(NAS:FREE) Whole Earth: A Sweet Company To Buy

Whole Earth (NASDAQ:FREE) is a consumer package company with multiple market-leading brands trading at around 10x 2021 earnings. Given its dominance in the artificial sweetener and licorice industries along with a rapidly growing natural sweetener segment, we believe FREE has a 50 to 100 percent upside from here. Background Whole Earth became public via the ACT II SPAC in June 2020. This acquisition bought two subsidiaries – Merisant and MAFCO – from Ron Perelman’s conglomerate into the public light. Under the conglomerate, these two companies languished in obscurity and funneled…

    • Initiation Price: $11.47
    • Upside: 50% [[**Closed 1/21/2022**]]

(NYSE:LEU) Centrus Energy: A Low Risk High Reward Play On Uranium

Centrus is a compelling risk-reward play on the future of US uranium enrichment. It is the sole US-owned uranium enrichment manufacturer, representing billions of dollars of IP and centrifugal technology. Combined with their recent price reset on their long-term contracts making them considerably more profitable, there are multiple ways to win with Centrus. Background Centrus Energy (LEU) represents the efforts of the American government’s uranium enrichment program that was spun off in 1999 for roughly 3B dollars. It was heavily reliant on government backing to support its facilities and after…

    • Initiation Price: $10.04
    • Upside: 200% [[**Closed 2/28/2022**]]