Calendar:

Last Week:
- Pitched TUSK on Yet Another Value Podcast. Investor feedback included below.
- Inside The Buy-Side No. 12: Pod Shop Analyst Netting Scenarios

Coming Up:
- Apprentice Program Lesson 3 Thursday, June 5th 11 AM ET. We will be joined by Hugh Anderson a former PM at SAC & Lombard. Register here (it’s free).  
- Releasing JAZZ: Value with an Oncology Catalyst with Sriker Nadipuram from Critical Value Asset Management.
- Releasing the “GPU Whisperer” with Aaron Ginn, the CEO of Hydra Host. Get exclusive private company insights on the Data Center & GPU market from one of the countries top experts. It’s a must watch for anyone invested in the cloud, AI or GPU space. Registration required.

TUSK Episode With Yet Another Value Podcast

Last week I joined Yet Another Value Podcast with Andrew Walker to pitch TUSK and look for holes in my thesis. After the conversation, it was crystal clear to me that the communication and execution of the cash balance is the key to unlocking long-term value at TUSK. Near-term, the O&G market and collecting money related to PREPA and Puerto Rico is unlikely to be counted until its in the bank.

In response to his classic question of what the market is missing?

1) The market is giving a discount to the cash on hand of 10-15% since the company has been FCF negative recently and has not clearly communicated a capital deployment strategy.
2) The market is not giving the company credit for the $30-50 MM of "near" cash since $40 MM of it is from PREPA and the market wants to have it before TUSK gets credit given the history.
3) The market does not yet realize the company could be about FCF neutral going forward with two frac spreads working and with the recent addition of the aircraft's in the rental business.
4) The market has not focused on the success this company has had in incubating industrial businesses. For example, the recent T&D sale (think mini PWR) was sold for $108 MM or 4x TBV (or 11x the initial purchase price of under $10 MM) after 8 years of incubation. The company is also incubating other industrial businesses such as engineering professional services, fiber installation, aircraft, telehandler and crane rental. 

Instead the market has focused on the traditionally larger energy businesses that have been more volatile and are coming off one of the worst years ever for natural gas prices in the Northeast U.S. with $2.21/mmcf. I view the energy exposure (NE natural gas levered) as a "free" option given the company is trading below cash.

TUSK Episode Investor Feedback:

1) Giving credit for the $20 MM A/R from PREPA is uncertain and there is also a Puerto Rico tax liability and a large NOL that could influence that A/R. I took the $20 MM A/R out of my valuation due to the uncertainty around it and the potentially offsetting tax liability and NOL.

2) I added in $8 MM of value for the $5 MM of book value of the Held for Sale Assets that were added to Current Assets as of March 31, 2025.

These two items had a net reduction of $0.25 as seen below.

*Not investment Advice. I am biased as I am a shareholder.

Click the link below to watch the full discussion.

Inside the Buy-Side - Blog No. 12:
Pod Shop Analyst Netting Scenarios

One of my colleagues put it succinctly to me once: there are 4 scenarios at the pod shops (he was an Analyst at MLP at the time, then went to Citadel likely for a nice guarantee, then came back to MLP to the same team as a PM).

1) Team up + Analyst up = Analyst gets paid
2) Team up + Analyst down = Analyst gets 0 or small token, maybe 1 more try
3) Team down + Analyst up = No bonus pool, Analyst might get a token from the top dog, team might get canned and Analyst gets put on a new team
4) Team down + Analyst down = no bonus pool and lucky to stay in seat or have a team or be re-podded.

Goes back to rule #1 Do not lose money. And Rule #2: refer to rule #1

The key is to be on a team of people that all (or most) make money in the same year.

My two cents is this was a bearish view point and the percent of profit years can be higher. If you get a bonus in 2/3 years that is reasonable (even if you are profitable each year). But, there is a wide range of outcomes. All that said, the pods are a great place to get training, have access to great mentors and have ample capital to run without having to market.

Keep grinding. Garden leave is only a couple years away.

Pitch The PM Apprentice Program Lesson 3

This week the Apprentice Program will be joined by former SAC and Lombard PM, Hugh Anderson. The lesson will start at 11 am EST this Thursday. Use the link below to register for the lesson.

It is an absolute privilege to have Hugh join us. Here is a preview of the agenda:

1) Hugh's Approach to Analyst Training as taught at The Independent Center for Analyst Development that Hugh recently started to mentor up and coming Analysts at top funds on a 1v1 coaching basis.

2) How to think about a stock within the context of an Industry with a case study on Transocean (RIG).

3) What an investor can learn from reading, "On Being Certain" by Robert Burton and the importance of psychological mindset on investors.

4) The recent TUSK episode on Yet Another Value Podcast with Andrew Walker.

As Warren Buffet would say, "When a manager with a reputation for brilliance tackles a business with a reputation for bad economics, the reputation of the business remains intact."

Click the image below to register for the lesson. Join the group on LinkedIn and receive updates on future meetings!

About Us

Pitch The PM is the Professional Investor's Podcast that provides a deep-dive into a stock's investment case using the Variant View Investment Checklist. It is an open exploration of the research process in real time using high-conviction ideas from top PM’s and Analysts. Join the journey as Doug fills out his Buffett advised, 20-slot lifetime punch card. We learn and laugh together. 

The Variant View Investment Checklist is the process that combines:

• A decade of experience managing $1B at Citadel & Millennium, 

• Studying the great investors like Buffett, Munger, Lynch & Greenblatt, 

• and the latest AI tools to improve idea velocity, accuracy and conviction.

Westport Alpha Group is a family office consortium of like minded finance professionals. Individuals may engage in Special Purpose Vehicle’s (SPV’s), Separately Managed Accounts (SMA’s) or act as an Independent Sponsor for a private company or in a public company take-private. This is not a solicitation to sell/buy any security or engage in any services. This is not an attempt to form a group.

Pitch The PM is hosted by Doug Garber, a former Citadel Analyst and Millennium Senior Portfolio Manager. Doug was initially trained at Citadel by a former SAC/Point 72 Analyst who worked directly for Steve Cohen before becoming a PM at Citadel. Doug was ranked as a top five analyst while at Citadel’s Surveyor Capital and was the only one to receive that designation twice during his tenure. He managed a multi-sector, multi-strategy team at Millennium under Katahdin Capital. Prior to his buy-side career, Doug worked in sell-side equity research honing modeling and primary research skills. Doug is currently the CIO and DoR at the Westport Alpha Group.

Doug graduated from Tulane University with a BSM and Master of Finance. He was selected to participate in the Darwin Fenner Student Managed Endowment Fund that utilized quantitative factors to outperform its benchmark and be an Investment Research Manager in the Burkenroad Reports “Stocks Under Rocks” equity research program. Doug has a passion for iterating on the investment process and a quirky sense of humor. He lives in Westport, CT with his wife, Lexi, and three kids. When he is not reading a 10-K, you can find him coaching youth soccer, inverted on his yoga mat or on an eFoil looking for Zuck.

Disclaimer

Past performance is not indicative of future results. Neither Pitch The PM nor its author (s) guarantee any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed in this material or on the show. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies mentioned on this website or on the show may not be suitable for you. This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned on this letter, on the website or on the show. Before acting on information on this website, in this letter or on the show, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.

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