Good morning everyone. Markets were on fire last week. It appears as if investors are thinking the Fed will slowdown their rate hikes and potentially reverse course sometime in the next twelve months. Should rates decline discount rates will fall again and valuations will rise across the board. I continue to stay bullish on stocks over the long-term and I’m finding a lot of interesting investment opportunities so far in 2023.

Last week I wrote about a company I think will get acquired over the next 12-18 months. It is a special situation with desirable assets in key markets. A catalyst just occurred in the stock just a few weeks ago and I don’t think the market understands the opportunity. Check the full write-up out here. Investment opportunities like this only come once in a blue moon.

I also published an article over the weekend highlighting my new favorite industry. Assets in this industry are trading at twenty cents on the dollar and economics continue to improve for the space. Over the next few years assets prices should trade more in line with tangible book value (or even higher) and implies a 4-6x upside for the industry. The full article can be viewed here.

The trading week is shorter this week but expect the same level of research and analysis in your inbox. Alpha Letter Pro subscribers, I will see you in the Telegram channel were we can chat about stocks. Now before we get into the insider buying activity of the past week, first a word from today’s sponsor…

“Internet Of Things” Now Includes Your Brain

NOT Sci-Fi: Naqi is making it possible to control all of your digital devices by *thinking*.

And you can invest in their company before the Global Smart Earbud market (a real thing) grows a projected 764% by 2030.

The web of interconnected phones, tablets, wrist watches, cars, fridges, toasters, etc…keeps getting bigger. In fact, the total IoT market is projected to hit $2T by 2029.

Before you let Elon Musk talk you into an expensive brain implant – Naqi uses a simple earbud.

And the science is surprisingly simple, too…

There are these things called “microgestures”, or tiny physical movements we make that no one else sees. Naqi figured out how to turn them into commands that potentially control billions of digital devices all around us.

Naqi has the potential to connect biological humans to essentially all things digital. But instead of being afraid…

Get a piece of this fast-growing market by becoming a Naqi shareholder.

Insider buying activity

We had a lot of insider transactions over the past week. I only included insiders who work at the company so this list is excluding any 10% plus holder such as an investment firm that has continued to purchase stock in the open market. If you want the full list for the week that includes a 10% holder reply to this email and I will send it over.

Let’s dig into the insider transactions.

Trinity Place Holdings (TPHS): It is a pretty small transaction of only $460 but the assets here look pretty interesting. The market cap is $27 million. The company has a cash position (including restricted cash) of $11.6 million and $241 million of debt, resulting in an enterprise value of $257 million. So for $257 million you get a property located at 77 Greenwich Street in Lower Manhattan, which is a real estate development nearing completion consisting of a 90-unit residential condominium tower, retail space and a New York elementary school. The company also owns a recently built 105-unit, 12-story multi-family property located at 237 11th Street in Brooklyn, New York. The company also owns a 10% interest in the recently built 234-unit multi-family property at 250 North 10th street in Brooklyn, New York and also a property occupied by retail tenants in Paramus, New Jersey. The company also owns intellectual property consisting of FilenesBasement.com and rights to the Stanly Blacker brand, IP associated with Running of the Brides event and An Educated Consumer is Our Best Customer slogan. The company is currently not profitable but once the completion of 77 Greenwich is complete there could be net income. To offset that net income there is $268 million of federal net operating loss carryforwards that could reduce taxable income or capital gains. There were also other large insider buys before the New Year that look pretty interesting. Finally, Third Avenue and Michael Price are large shareholders in the company. The assets here look pretty interesting and it’s likely the company is undervalued. I might spend some time digging into the NAV and seeing what value I come out with. This is a good way to own New York real estate, potentially for next to nothing.
Hudson Global (HSON): The CEO of Hudson Global purchased $46,551 worth of his own company on January 9th. The company has a $70 million market cap and the stock recently nose dived from $37 per share to $25 per share in November. The company provides talent and recruitment sourcing for employees/employers which is an industry I have never dug into before. But the drop in the stock price looks interesting and the recent buy from the CEO is a show of confidence. TTM P/E ratio is only 8.0x which seems reasonable.
Karat Packaging (KRT): The VP of Manufacturing purchased $13,440 worth of Karat Packaging just last week. I’ve never heard of this company before but the stock looks like it recently went public and has fallen from $20 per share to only $15 per share over the past year. The market cap is $300 million and they have around $33 million of net debt. The company distributes disposable products such as plastic cups and forks to restaurants and other end-users and looks to be generating $30 million or so of operating income per year. Trading around 10x EV/EBIT isn’t bad so it might make sense to do a bit more work here and understand the industry and the goals of the management team. The stock is relatively unheard of so anyone who wants to be an expert on the equity could be.
American Resources Corporation (AREC): The CEO of American Resources purchased $6,900 worth of stock last week. The purchase price is small but the assets look interesting enough to spend sometime on. The company owns, controls and is developing met coal assets. There is revenue but the company is currently unprofitable given the developing cost they expense. There is also a short report on the company that any potential investor should read through. Also some related party liabilities and convertible debt. Despite the hair, should met coal prices skyrocket again, high costs producers like American Resources will do well, at least from as share price perspective. It might be hard to get to a fair valuation as a real investor in assets, but this one could be good for short term traders.
Martin Midstream Partners (MMLP): Two small insider buys from the CEO and CFO, but still buys in a beaten down stock nonetheless. Over the past ten years the stock has collapsed 90% and is trading with a share price of only $3.25 and a market cap of $126 million. The company operates as an MLP in the oil and gas industry and has $577 million of net debt. There is probably enough assets here to protect an investors downside, but at the end of the day you are dealing with an MLP so you will have to file a K-1 in every state Martin Midstream does business in, which can be a big headache. I might do a bit of digging here as the stock price is pretty beaten down.

That’s it for this week on insider transactions. If anyone sees anything else interesting on the full list reply to this email or comment below. I’d love to dig into some other stocks.

Disclaimer: The publisher does not guarantee the accuracy or completeness of the information provided in this page. All statements and expressions herein are the sole opinion of the author or paid advertiser.

Alpha Letter is a publisher of financial information, not an investment advisor. We do not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient.

THE INFORMATION CONTAINED ON THIS WEBSITE IS NOT AND SHOULD NOT BE CONSTRUED AS INVESTMENT ADVICE, AND DOES NOT PURPORT TO BE AND DOES NOT EXPRESS ANY OPINION AS TO THE PRICE AT WHICH THE SECURITIES OF ANY COMPANY MAY TRADE AT ANY TIME. THE INFORMATION AND OPINIONS PROVIDED HEREIN SHOULD NOT BE TAKEN AS SPECIFIC ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. INVESTORS SHOULD MAKE THEIR OWN INVESTIGATION AND DECISIONS REGARDING THE PROSPECTS OF ANY COMPANY DISCUSSED HEREIN BASED ON SUCH INVESTORS’ OWN REVIEW OF PUBLICLY AVAILABLE INFORMATION AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN.

No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned.

Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable. They are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur. Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities discussed herein. The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and the publisher undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material.

The publisher, its affiliates, and clients of the a publisher or its affiliates may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.

Neither the publisher nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein.

By using the Site or any affiliated social media account, you are indicating your consent and agreement to this disclaimer and our terms of use. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.

For Full Terms of Use Click HERE. For the Privacy Policy Click HERE.

alphaletter.co (“Alpha”) is a website owned and operated by Substack. Alpha is paid fees by the companies that make investment offerings on this website. Be aware that payment of these fees may put Alpha in a conflict of interest with the investor. By accessing this website or any page thereof, you agree to be bound by the Terms of Use and Privacy Policy, in effect at the time you access this website or any page thereof. The Terms of Use and Privacy Policy may be amended from time to time. Nothing on this website shall constitute an offer to sell, or a solicitation of an offer to buy or subscribe for, any securities to any person in any jurisdiction where such an offer or solicitation is against the law or to anyone to whom it is unlawful to make such offer or solicitation. Alpha is not an underwriter, broker-dealer, Title III crowdfunding portal or a valuation service and does not engage in any activities requiring any such registration. Alpha does not provide advice on investments or structure transactions. Offerings made under Regulation A under the U.S. Securities Act of 1933, as amended (the "Securities Act") are available to U.S. investors who are “accredited investors” as defined by Rule 501 of Regulation D under the Securities Act well as non-accredited investors, who are subject to certain investment limitations as set forth in Regulation A under the Securities Act. In order to invest in Regulation A offerings, investors may be asked to fill out a certification and provide necessary documentation as proof of your income and/or net worth to verify that you are qualified to invest in offerings posted on this website. All securities listed on this site are being offered by, and all information included on this site is the responsibility of, the applicable issuer of such securities. Alpha does not verify the adequacy, accuracy or completeness of any information. Neither Alpha nor any of its officers, directors, agents and employees makes any warranty, express or implied, of any kind whatsoever related to the adequacy, accuracy, valuations of securities or completeness of any information on this site or the use of information on this site. Neither Alpha nor any of its directors, officers, employees, representatives, affiliates or agents shall have any liability whatsoever arising from any error or incompleteness of fact, or lack of care in the preparation of, any of the materials posted on this website. Investing in securities, especially those issued by start-up companies, involves substantial risk. investors should be able to bear the loss of their entire investment and should make their own determination of whether or not to make any investment based on their own independent evaluation and analysis

Grit Alpha

Buy New York Real Estate for Nothing!