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

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...

(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

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 ...

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…

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.

META ::UPDATE:: TRIM

We have trimmed META (NAS:META). It is up 175% since our initiation report in March 2022 (report here). We added to our position in November 2022 as a myriad of fears drove META down 50% from initiation (here). META is a compelling reminder of how inefficient markets can be. In the span of a little over a year, narratives have reversed for META in almost all domains: Contrary to earlier apprehensions, META has weathered the Apple Ad Tracking Transparency storm and now has record engagement and ad revenues; TikTok fears have diminished as the platform has increasingly become a focal point of geopolitical tension;

(LSE:AWE) Alphawave Semi: Surfing the AI Wave?

We believe two factors are driving the AI megatrend: Higher computation and higher networking needs. AI applications demand high bandwidth and low latency, crucial factors for both training and inference workloads.  We believe that AI technology is still in its nascent stages, and are actively seeking companies poised to benefit from this trend. AWE emerged as a compelling prospect, positioned to leverage these evolving networking trends. However, we found evaluating their competitive positioning challenging, especially considering the integration risks associated with their recent acquisitions...
    • Initiation Price: £1.75
    • Upside: Neutral

Titan Machinery ::UPDATE:: CLOSED

We have exited out of Titan Machinery (NAS:TITN). It is down about 15% from the time we initiated our position in July 2023 (report here). We stated that TITN had upside potential of 30% and since then, the below factor has influenced our decision to sell. The complexity within their business operations has proven to be more significant than we initially anticipated. We believed that TITN’s operational changes over the last several years, which aimed to increase efficiencies and cashflows, were more sustainable. However, the environment from rapidly...