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@TBstockinvestor Wouldn’t be surprised if this is a prelude to a take private. Hopefully minority shareholders get a reasonable price if that occurs.

Evolution $evo $evvty buyback might be "only" 15% But 45% of stock is held by the founders and kenneth dart. Almost 30% of shares "up for sale" are being bought

@DrewCohenMoney It probably took some time to get the BoD comfortable with taking on leverage for a larger buyback.

So why did $EVO take so much time to decide on a buyback???

@compoundpapi Great call on the public LBO. Looks like they’re taking on debt to fund a larger buyback.

@TBstockinvestor Also possible they are expecting fines from UKGC and the California litigation.

The delay in Evolution $evo $evvty Share buyback has to be tied to an acquistion. Currently nothing else makes sense. Maybe they want to wait for the galaxy gaming acquisition to be finished up before going for a second player. It would make a little more sense then.

@deepvalueco In hindsight seems clear that the company was overearning post-COVID. Seems like mean reversion to me. Will probs still grow MSD over the LT.

Alternatively:

Soft L4L from Action for 3i, 2.4% in May drag from France & Germany Stake up to 65.4% £750M buyback announced

@ErnestWongBWM My interpretation of this is that the owner-operators of these businesses who are actually close to their customers see minimal AI threat and are thus not willing to sell at a discount.

"There's a real disconnect between the SaaS apocalypse/publicly-traded stuff and private markets" $CSU.TO

@DevinLaSarre Feel like the market puts more value on the short term tailwind from new product launches and discounts the erosion of terminal value from competition

The FDA's new Guidance for Industry carries radical implications that are not all strictly positive for major manufacturers, but investors are too busy doing cartwheels to question it

@ohcapideas How do you think about stability of their underwriting profit given the impending soft market? Seems difficult to project how much premiums could possibly shrink.

@aledade3 They have a chart of duration. Implied average is around 3-4 years.

Haven't updated this for Q1 and it's a "roughly right" tracking. You can see how modeling $FFH.TO this way really swings the fair value quite a bit. That's because of a few reasons - one, earnings significantly improved during this period and you're using the 3-year average earnings, so the increase lagged a lot until 2024 or so when the model kind of says "ok now that we have mutliple years averaged together, we'll consider this increase in earnings normal." And then also, FV in excess over CV has been growing from around $1B to over $3B too. It's not a science, but even the 5-year average over the whole time frame is a P/B of over 1.7x. And that is essentially Fairfax's fair value if you believe underwriting profits are sustainable at current levels and interest rates are fairly normal. Right now, Fairfax is earning about 5% on the bond and cash portfolios. One thing is sure, 1.3x right now is too cheap.

@ohcapideas Does Fairfax disclose the expected avg duration of their insurance liabilities?

Interest income on cash and short term investments is all that’s deducted. In theory, if float is invested in fixed income you capitalize the interest income rather than value it at market. But if cash and short term investments are excess and investable than it does make sense yo value then at their market value. This kind of breaks down when FFH invests float at really short durations, which they did a few years ago. Today, though, float and fixed income are pretty close to each other.

@janklp It would be uncomfortable to the extent it happens quickly and puts them in a liquidity crunch, forcing them to raise capital or sell off assets. Altho fair point, lost decade is unlikely. Could see it wiping out a year of earnings tho.

@aledade3 Just to put it in context with an example. If the stock would drop 70% to $505.20, then there would be a ~$2,1 bn. loss on the swaps. That is a very tough hit in the face. But we are talking about 8% of equity. Do you think such an extreme scenario would mean another lost decade?

My take on the Fairfaix $ffh Q1 2026 results. Apparently, Mr. Market and I are in strong disagreement about what this business should be worth. What am I missing? Looking for some pushback on the X machine that can prevent me from making this already sizable position even bigger.

@janklp I think it is absolutely fundamental. It could lead to a negative flywheel where adverse market sentiment pushes down the share price, which leads to losses on the TRS, which leads to further worsening of market sentiment. If we have another lost decade it will be bc of the TRS.

@aledade3 Do you consider this to be a fundamental business risk for the long term investor? Or more a risk regarding quarterly noise that makes it harder to come to a clear picture of underlying earnings?

@BigBlockVette69 @Mr_Neutral_Man @StocksOddball @swingsonly @DevinLaSarre I mean this was also true 5 years ago and they’ve had highest TSR in tobacco since then. Low valuation + disciplined capital allocation can make up for a lot.

@Mr_Neutral_Man @StocksOddball @swingsonly @DevinLaSarre The MS report on $IMB was very worrisome. They are very exposed to the U.S. market and being the #3 or #4 player in the U.S. between $BTI and $MO is NOT where you want to be. Then fighting it out with $PM and $BTI globally ? I looked at $IMB and then bailed. 🙄

This chart is for my nicotine bros $BTI $PM both trading at much lower EV/EBITDA multiples than similar revenue growth rate consumer staple companies $BTI trades at under 10 times EBITDA while similar growth rate $PG $PEP $KMB $DEO etc all trade at much higher multiples. If you believe that modern oral, i.e. pouches etc will eventually replace combustibles, both $BTI and $PM are significantly cheaper than their counter parts consumer staples with similar growth rate You either get lower multiple at same growth rate or same multiple at much higher growth rate @DevinLaSarre @compoundpapi Warning: Asked Claude to pull this data, likely some error, but believe it is directionally correct

@compoundpapi Glass half empty is they move on to banning pouches and vapes and the whole market goes illicit? Still long tho lol.

@gnufs I’m predicting we get little if any clarity on any of these issues and continued whining about the “external environment” lol

REGULATORY - UKGC investigation - $GLXZ acquisition outlook - US outlook after Nevada's Asia supply ban - Measures on $EVO's competitors to join European ringfencing - End-goal against Playtech

My areas of interest at tomorrow's $EVO Q1 results: SALES - Y/Y Live Casino growth trend - Europe: Decline status - Asia: Signs of recovery in USD - Americas & Africa: Status of double-digit USD growth - Consumer outreach - Any popular release before Q3/Q4 Monopoly live games

@compoundpapi $EVO’s game shows are social / entertainment products. More competitive w the likes of short form video if anything.

@compoundpapi I would contest the notion love casino is a direct competitors to prediction markets. I think prediction markets attract people who “monitor the situation” and believe they have some fundamental edge in predicting geopolitical events.

@cohibainvestor @compoundpapi Smart guy but pretty unlikely given he’s 71 years old lol

@compoundpapi I've said this before and I’ll say it again. I wouldn’t be surprised if he ends up being one of the richest men in the world.

@compoundpapi @kevg1412 As an A- and B-stage VC, my basic MO is to follow companies for 1-2 years before investing and assess managements’ progress against their previously forecasted milestones. I think this is common in the industry and the same as what you should be doing for public cos anyway.

"$600K buys 10%--very rich deal" Don Valentine on investing in Apple in 1977