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Everest RE Premiums and Margins Climb

• 2.4% Dividend with 9% expected dividend growth.
• Well-managed reinsurer, consistently growing portfolio without substantially changing the risk profile.
• Improving loss ratio combined with increasing premium revenues expanding margins and profits.
• Investment income bolstered by rising interest rates.
• Expanding into European markets.
• Experienced management targeting over 13% shareholder returns.

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Recent Sale: PayPal’s Hostile Change in User Policy

PayPal has been sold as its policy to confiscate users’ money for breaching its “Acceptable Use Policy” (AUP) is a breach of fiduciary responsibilities and trust. A payment network cannot hope to maintain acceptance and grow if it is claiming the ability to seize users’ funds. While PayPal has modified the policy slightly, they still have the ability to confiscate $2,500 for AUP violations. Even if this is reversed, the damage to PayPal’s reputation is irreversible in the near term and merchants will look for more trustworthy payment systems.

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Fiserv: Gaining Leadership in Payments with Huge Free Cash

• Free cash machine with over $5 billion a year, expecting 20% growth in earnings per share.
• Core payments business remains strong and stable, with market share growth in point-of-sale systems with Clover.
• One of the main processing partners for Zelle, processing nearly $500 billion in P2P transactions a year.
• Targeting technology-rich competitive advantage, raising guidance after outperformance in 2Q22.
• Recovery from margin contraction in 1Q22, projecting >5% organic revenue growth in all reportable segments and margin expansion of over 1%.

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Trulieve Cannabis’s Growth Has Not Gone Up in Smoke

• Legalization of Recreational use in Florida is slated for a ballot initiative in November 2024.
• Expanding its footprint significantly with 30 new stores planned in FY22.
• Most profitable cannabis company.
• Expects to be free-cash positive in FY23.
• Profitability Poised to surge if SAFE Banking Act is ever enacted.

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EnerSys: Charging Up For Dominance In Industrials

• Largest market share globally, with 22% of industrial electrification using ENS systems.
• Record backlog of $1.3 billion in orders, with an estimated $5 billion added to the total addressable market in FY23.
• Expanding margins through tracking megatrends and targeting efficiency improvements.
• Deployment of M&A to gain foothold in new product markets or to improve production of existing products.


Navios Embarks on Modernization Amid Demand Tailwinds

• Second largest American-owned shipping fleets, with 188 vessels in stock.
• Broad client base including top names in oil, dry bulk, and other maritime carrying firms.
• Contracted days exceed operating costs for the year, with 48.7% of open shipping days available for spot market or other contracts.
• Expansion plan includes adding 22 new ships by 1Q25 to abide by new environmental and safety standards.
• Long-term contracts guarantee at least $2.4 billion in revenue through 2027.


Gold Stocks Compellingly Attractive After 40% Pull Back from April Highs

Gold Stocks have pulled back 40% from their April highs as measured by the GDX, gold miner ETF. Markets are assuming inflation has peaked and will come down to reasonable levels. The combination of possible recession and the Fed’s quantitative tightening has lead markets to assume inflation will be brought under control. We believe it is unlikely that the runaway inflation can be brought down to 2-3% in the short term.

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Meta’s Headwinds and Strategic Misalignment Are Not Virtual

• Too little too late on revamp of adverting algorithm, poor adaptation to Apple’s new privacy rules.
• Significant fall in ARPU, despite increases in ad impressions and increases in monthly active users.
• Expensive barriers for entry for consumers and developers in the Metaverse.
• Headwinds may be difficult to surmount with hiring freeze.


Gold Fields Targets Yamana for Synergies

• Yamana Acquisition target for Gold Fields (GFI) at an announced 33.8% premium using GFI stock.
• Estimated Fair Value of GFI is $16.50 per share.
• Combination of takeover premium and appreciation of GFI is compelling.
• Combined entity would have long mine life with significant brownfield and greenfield expansion opportunities available.

Building Benjamins

Flash Sale of Meta Platforms (Meta)

Flash Sale of Meta Platforms August 1, 2022 We have sold our position in Meta Platforms, Inc. (META) The company’s attempted pivot to dominance in the Metaverse seems unlikely to be successful. META appears to be overcharging potential developers to utilize its platform causing limited uptake. In addition, the core Facebook business is having difficulty…