Fundamental Equity Research

The Fundamental Finance Playbook is dedicated to bottom-up analysis and research of stocks and other securities. I try to publish research notes and more elaborate write-ups periodically but since it is a side-job for me, finding the time to produce in-depth content is an exercise in futility. 

You should know and I should disclaim that none of the content on the Fundamental Finance Playbook constitutes investment advice. You are on the internet and here its the rule of caveat emptor, especially when it’s free content from someone who is not a professional investment advisor. Read at your own risk.

Companies and business models that I focus on can be segmented as follows:

Holding Companies and Conglomerates

Holding companies and other conglomerates that operate multiple business models or in more than one industry tend to be priced in public markets at a discount to its net asset value. Nonetheless, sum-of-part valuations of holding companies tend to end up disappointing investors unless there is a clear intention of management to close these conglomerate discounts through corporate actions and financial engineering.

Exor N.V. (BIT:EXO)

Exor is holding company where most of the wealth of the Agnelli family is concentrated. Since John Elkann gained control within the Agnelli dynasty, Exor has been on a long journey to reinvent itself into a more diversified holding company, through spin-offs, mergers, acquisitions and venture investments. Exor holds controlling stakes in FCA, Ferrari, CNH Industrial and Partner Re.

Asset Management Companies

The asset management industry has been going through a transformative period. As funds have been flowing into passive strategies, active asset managers have suffered. Conventional mutual fund structures have lost ground to Exchange Traded Funds, which offer a more tax-efficient structure for most investors. As baby boomers have reached retirement age, this generation has been redeeming their savings whilst the preference of younger generations tilts to Robo-advisors.


FRMO Corp is a holding company that owns various assets in finance and asset management. FRMO Corp’s main asset a stake in Horizon Kinetics Asset Management. Horizon Kinetics offers a set of investment products based on proprietary fundamental research, both through repeatedly managed accounts, as well as through its subsidiary, Kinetics Mutual Funds.

Dundee Corp (TSE:DC.A)

Dundee Corp is primarily an alternative asset management company focused on the precious metals industry. That has, however, not been the investment thesis behind Dundee Corporation. Dundee has been going through a extreme restructuring over the last years, and is primarily a turnournd story.

Stock Exchanges and Market Data

Stock Exchanges are extremely powerful business models. The operation of national stock exchanges, derivative markets and bond trading platforms is subject of much public scrutiny and regulation. As such, companies that operate these highly regulated markets, operate within high entry barriers.

In addition, exchanges have high network effects and do not require high capital expenditures on an ongoing basis. These companies have extremely high operating margins and free cash flows. On the other hand, there are limited organic growth opportunities.

Euronext (EPA:ENX)

Euronext is a pan-European stock exchange, the largest in Europe and the sixth-largest in the world. Euronext operates regulated exchanges in Belgium, France, Ireland, The Netherlands, Norway and Portugal. With close to 1,500 listed issuers worth €3.8 trillion in market capitalization as of end June 2020.

Euronext also operates regulated and transparent derivatives markets and is the largest platform for debt and funds listings in the world. Its total product offering includes Equities, FX, Exchange Traded Funds, Warrants & Certificates, Bonds, Derivatives, Commodities and Indices.

CBOE Global Markets (BATS:CBOE)

Cboe Global Markets, Inc. is one of the world’s largest exchange holding companies. The company offers trading across a diverse range of products in multiple asset classes and geographies, including options, futures, U.S. and European equities, exchange-traded products (ETPs), global foreign exchange (FX) and volatility products based on the Cboe Volatility Index (VIX Index), recognized as the world’s premier gauge of U.S. equity market volatility.

Cboe’s subsidiaries include the largest options exchange and the third largest stock exchange operator in the U.S. In addition, the company operates one of the largest stock exchanges by value traded in Europe and is a leading market globally for ETP listings and trading.

Online Marketplaces and eCommerce

The internet has offered great consumer benefits for society by aggregating supply and drastically reducing search costs in almost any consumer industry. Online marketplaces and other aggregators tend, when successful, will operate under strong network effects. The problem this poses for buinsess analysts and other fundamel investors, is that network effects are best observed in hindsight. Inc (OSTK)

Overstock runs a furniture and home decor online retailer as well as investing in blockchain-focused ventures through its subsidiary Medici Ventures, and its subsidiary, tZero. The history of Overstock is case study onto itself, as the company has gone through tumultuous ride since entering the public markets.

UpWork Inc (UPWK)

UpWork operates one of the leading platforms for freelancing and specialized talent globally. Upwork has built an expansive and unique repository of data on its platform, which, when combined with machine learning capabilities, enables Upwork to best predict the availability, interest, and skill relevance of specific freelancers for specific projects. Once a freelancer is matched with a job, the platform offers collaboration and communication features, time tracking and invoicing, and two-way feedback and review systems to better manage the lifecycle of project engagements.

Liberty TripAdvisor (LTRPA)

Liberty TripAdvisor is a holding company whose main asset is a controlling stake in TripAdvisor (TRIP). Though Liberty TripAdvisor’s economic ownership of TripAdvisor is only 23%, the company controls 52% of the voting power. The company entered the public markets through a spin-off from Liberty Interactive in 2014.

Brands and Intangible Assets

Peter Thiel is know for saying that successful companies are often built around secrets. The job of an equity analyst, or anyone performing any kind of bottom-up fundamental analysis of company, is to try to understand what the secret actually is. In many cases, these secrets will be intangible. It will not be something that the analyst will easily find on the company’s balance sheet.

Lucas Bols N.V. (AMS:BOLS)

Lucas Bols is the world’s oldest distilled spirits brand and one of the oldest Dutch companies still active. The company owns a portfolio of more than 20 brands across a range of spirits products, including liqueurs, genever, gin and vodka. Lucas Bols has the number one position in liqueur ranges worldwide (excluding the US) and is the world’s largest player in the genever segment. 

Micro Cap and OTC Companies

There are different detentions of what constitutes a Micro Cap company. According to a Microcap any publicly traded company with a market capitalization from $50 to $250 million. Companies with a market capitalization under $50 million are generally referred to as Nano Caps, but I will include them here as well.

Microcap stocks are often not listed on national exchanges. These stocks will be traded over-the-counter (OTC) through alternative trading systems. In many cases, Microcap stocks are “dark”, which for U.S. based companies means that they do not report their financials to the SEC. Although this is the case, many dark companies do report financials to their shareholders, albeit not on the level that SEC reporting would require them.

Winland Holdings (OTC:WELX)

Winland Holdings Corporation is the holding company for Winland Electronics, Winland Capital Corp. and Winland Mining, all wholly-owned subsidiaries of the Company. Winland Electronics specializes in sensor-based, critical condition monitoring devices. Winland Capital Corp is a specialized investment company and Winland Mining is a cryptocurrency mining business that currently operates 200 Bitmain S19 95 TH/S, cryptocurrency miners.

CentralNic (AIM:CNIC)

CentralNic (AIM:CNIC) is a company that sells domain names and related services to resellers and directly to big corporate clients as well as small businesses. CentralNic Group PLC is listed on the Alternative Investment Market (AIM) of the London Stock Exchange.

Customers are very sticky in the domain business given the high levels of automation and high switching costs, with transfers between providers amounting to a small proportion of all transactions. This customer stickiness, combined with the high value and quality of earnings of existing customer books, makes the domain industry a very attractive and relatively low-risk industry in which to acquire businesses.

Research Watchlist

There are a number of companies that I follow and/or have invested in but have not yet written up. Here is a list of stocks that I currently track for various reasons: