Zeke Ashton

Zeke Ashton

Last Update: 08-14-2017

Number of Stocks: 23
Number of New Stocks: 6

Total Value: $38 Mil
Q/Q Turnover: 30%

Countries: USA
Details: Top Buys | Top Sales | Top Holdings  Embed:

Zeke Ashton Watch

  • Zeke Ashton Comments on Interactive Brokers

    The Fund’s largest new holding in 2017 is Interactive Brokers (NASDAQ:IBKR) (not to be confused with IAC / Interactive Corp) which is a business that we have monitored and admired for several years. Interactive Brokers is a growing online investment brokerage business that caters mostly to financial professionals, smaller institutions, and proprietary trading shops. Our research indicates that the company is far and away the industry’s lowest cost provider of brokerage services and also offers superior trading execution. Despite strong account and user growth, the business has recently reported slowing revenue and earnings growth due in large part to the market’s recent historically low volatility. When stocks aren’t moving around, professional traders and investors have less to do, and Interactive Brokers gets less business. It is our view that the company may benefit substantially if market volatility reverts back towards historical levels. In addition, it would seem that the market direction is less important than the activity level of its customers, which generally increases when markets are moving a lot, whether up or down. Our analysis suggests that Interactive Brokers stock is relatively cheap due to recent (and we believe temporarily) depressed earnings, and given the substantial operating leverage in the business, an increase in client trading activity would likely have a magnified impact on operating profits and cash flow.


    From Zeke Ashton (Trades, Portfolio)'s Centaur Management semi-annual 2017 shareholder letter.   


  • Zeke Ashton Comments on Alleghany

    We significantly trimmed the Fund’s position in Alleghany during early 2017 and as of April 30th the position size was below 2% of Fund NAV. We have owned Alleghany (NYSE:Y) in the Fund for many years, occasionally adding to our position on price weakness and occasionally trimming on price strength. The business itself has been remarkably consistent over the last 15 years or so. Using book value per share (or BVPS, which is generally the preferred metric for assessing wealth creation for insurance companies) Alleghany grew at an annualized rate of 8.5% for the five years ended December 31, 2016. Over the trailing ten year period, the annualized BVPS growth was 7.8% and for the trailing 15 years the growth rate was 8.0%. Interestingly, the common stock has appreciated at a 16.3% compound annualized growth rate over the last five calendar years through 2016, or roughly double the book value growth in that period. As a result of the recent stock price appreciation, the shares traded at the time of our last sale of just over 120% of the most recently reported book value. We’ve historically purchased shares at prices at or below 90% of book value, and Alleghany has wisely repurchased its own shares at attractive prices below book value over the last several years. From 2009 to 2016, the highest price the market was willing to pay for Alleghany was rarely higher than 105% of book value, and on average once per year one could buy shares at prices at or below 90% of book value. The last time Alleghany stock routinely traded as high as 120% of book value was in 2007 just before the financial crisis, and the stock price lagged book value growth for nearly five years thereafter despite solid business results. I bring Alleghany to your attention because it serves as a fairly typical example of what has been going on in the stock market over the past five years, where broad stock market performance has been running much hotter than underlying business performance. We decided to retain a small position in Alleghany because we felt that holding a small residual investment in a consistent and conservatively managed business like Alleghany at a higher than average 1.2X multiple to book value is still preferable to most other alternatives we are able to currently identify. But we cannot justify keeping Alleghany at a larger position size unless we can conjure up reasonable scenarios that would allow Alleghany to suddenly compound book value per share at much higher than the 8% annualized rate it has managed over the last 5, 10, and 15 years. Unfortunately we haven’t been able to come up with a reasonable scenario in which Alleghany suddenly enjoys a much higher growth rate than it has produced in the past.


    From Zeke Ashton (Trades, Portfolio)'s Centaur Management semi-annual 2017 shareholder letter.   


  • Zeke Ashton's Centaur Mutual Funds Semi-Annual 2017 Report

    Dear Centaur Total Return Fund Investors:

      


  • Dividends and Total Returns Add Up for Zeke Ashton

    Zeke Ashton (TradesPortfolio) may run a concentrated portfolio, just a couple of dozen stocks at most, but he finds it difficult to stay fully invested in this market.


    He wants to find above-average total returns and get them, likes to collect dividends and sometimes write covered calls. Above all, he searches for quality stocks in fields he understands well.

      


  • Zeke Ashton Comments on IAC/Interactive Group

    IAC/Interactive Group (NASDAQ:IAC) is a leading media and internet conglomerate that has a multi-decade track record of developing valuable media companies, which have in the past included Expedia, TripAdvisor, Ticketmaster, and The Home Shopping Network. Today, IAC owns a collection of businesses that includes HomeAdvisor, the leading marketplace connecting homeowners with service professionals for home improvement projects, and Vimeo, a fast-growing video platform and video-on-demand marketplace. The most valuable asset at IAC is the company’s majority ownership interest in Match Group. Match is the world’s largest online dating services provider comprising 45 different brands that IAC took public through an IPO in late 2015. IAC continues to own more than 80% interest in Match (NASDAQ:MTCH), which we think is a unique and under-appreciated asset. We have been impressed with the company’s strong history of value creation and recent capital allocation savvy, and we believe that both Match Group and HomeAdvisor have reached a point of industry leadership following a multi-year “land grab” strategy and that both businesses are now demonstrating impressive profitability growth as the businesses mature. We think these businesses could combine continued strong revenue growth with expanding profit margins for several years, and we believed at the time of our purchase of IAC shares that the market price did not fully reflect the value creation potential inherent in these businesses as well as the company’s portfolio of other internet and media assets.

      


  • Zeke Ashton Comments on Cognizant Solutions

    Cognizant Solutions (NASDAQ:CTSH) is a leading provider of outsourced business processing and technology solutions, providing mission-critical services to a base of over 1,200 mostly large global corporate customers primarily in the areas of banking and insurance, healthcare, logistics, and manufacturing. As an indication of just how successful Cognizant has been, a quick review of the financials from 2005 to 2015 reveals a business that grew top-line revenue roughly 14-fold from $885 million to $12.4 billion. Even more impressively, cash flow profitability improved from $68 million to $1.8 billion (roughly 26-fold) during the same span as the company achieved scale and operating leverage. We initially began buying Cognizant stock following the “Brexit” vote. We added to the Fund’s position when the stock sold off further in late September after the company disclosed an internal investigation related to improper payments made by company personnel in India that could be in violation of U.S. anti-bribery laws. We made this incremental investment in the belief that this unfortunate situation is likely to be an issue that will ultimately be resolved without significant financial liability or reputational damage to Cognizant. The stock had already recovered some of its losses by the end of October.

      


  • Zeke Ashton Comments on Berkshire Hathaway

    Berkshire Hathaway (NYSE:BRK.B) is of course managed by Warren Buffett (Trades, Portfolio), who is justifiably recognized as one of the world’s most successful investors and the torch-bearer for the value investing style of capital allocation. Unlike many stocks in today’s expensive environment, Berkshire Hathaway remains very reasonably valued on historical measures relative to earnings and book value, and we believe the company’s immense balance sheet strength remains a rare competitive advantage.

      


  • Zeke Ashton's Centaur Management 2016 Annual Letter to Investors

    Dear Centaur Total Return Fund Investors:

      


  • Zeke Ashton's Best-Performing Assets

    Zeke Ashton (Trades, Portfolio) is the managing partner of Centaur Capital Partners and manages the investments for the Centaur Value Fund. He manages a portfolio composed of 29 stocks with a total value of $52 million. The following are his best investments of the year.


    Brown & Brown Inc. (BRO) with a market cap of $6.28 billion has gained 41.4% year to date. The guru's stake represents 3.61% of his total assets.

      


  • Learning From the Biggest Mistakes of Institutional Investors

    Every investor makes mistakes. If someone tells you they do not, they are either lying or too inexperienced.


    Mistakes are a natural part of investing. Even Warren Buffett (Trades, Portfolio), who is widely considered the world’s most knowledgeable investor, has made some serious errors in his career. In fact, Buffett has said acquiring Berkshire Hathaway (NYSE:BRK.A)(NYSE:BRK.B) was his biggest mistake, and look how that turned out.

      


  • Zeke Ashton Reduces, Eliminates Multiple Positions in 3rd Quarter

    Zeke Ashton (Trades, Portfolio) is a managing partner at Centaur Capital Partners and manages the Centaur Value Fund. During the third quarter, the guru made the following trades:


    The investor reduced his position in Apple Inc. (NASDAQ:AAPL) by 50.94%. The trade had an impact of -3.9% on the portfolio.

      


  • Warning Signs Identify Value Declining Companies

    Among U.S. companies, Leucadia National (Trades, Portfolio) Corp. (NYSE:LUK) has declining profit margins and a weakened financial outlook. As the beef-processing company shows warning signs of potential bankruptcy, several gurus look elsewhere for growth and value.


    Brief discussion about the warning signs

      


  • 15 Questions With Tom Jacobs

    Today we are interviewing investing author Tom Jacobs. We talk about how he got his start in the market, the first stock he ever bought as well as the bargains he is finding in today's market.


    1. How did you get started investing?

      


  • Zeke Ashton Invests in 10 New Holdings

    Five of Zeke Ashton (Trades, Portfolio)’s top six transactions in the second quarter were acquisitions of shares in companies that are new to the portfolio.


    Ashton invested in 10 new holdings in all.

      


  • Zeke Ashton Comments on Iconix Group

    As long‐time investors probably are aware, our strategy is highly flexible and from time to time we make investments in securities other than common stocks, most commonly convertible or high yield corporate bonds. In March the Fund purchased a modest position in a corporate bond issued by Iconix Group (NASDAQ:ICON), a company we are quite familiar with by virtue of having owned the common stock for two extended stretches in past years. Our track record on the equity is mixed: we made good money on it the first time we owned it as it de‐levered coming out of the 2008‐2009 crisis. The second time around we sold at a loss as the company re‐levered into the easy credit environment of 2014‐2015 and we became increasingly uncomfortable with the debt profile as well as other issues that we would consider to have been self‐inflicted by an overly aggressive management team. Iconix has since replaced its management, but entered the year needing to roll out a substantial amount of debt due to mature at mid‐year 2016. Though the company carries more debt than is healthy, the underlying business is in pretty good shape and the company generates substantial cash flow. We considered buying the stock, but despite a depressed price we elected to pass due to our long‐held aversion to owning equity when there is a large amount of debt in front of our ownership position. As we evaluated the credit structure, however, we found a risk/return profile we could get comfortable with and purchased junior bonds that are due to mature in early 2018. We bought the bonds at roughly 67 cents on the dollar in late March, at which time the annualized yield‐to‐maturity was in the mid‐20% range. Our purchase occurred immediately following the company’s announcement of a new five‐year credit agreement that would allow Iconix to repay its 2016 bonds, leaving the March 2018 bonds as the next issue in the maturity ladder. We believe these bonds are much safer than the purchase price would suggest, and we expect to hold the securities to maturity and collect the full par amount.

    From Zeke Ashton (Trades, Portfolio)'s 2016 semi-annual report.  


  • Zeke Ashton's Centaur Total Return Fund Semi-Annual 2016 Report

    Dear Centaur Total Return Fund Investors:

      


  • Zeke Ashton Purchases Stake in Dave & Buster's

    Guru Zeke Ashton (Trades, Portfolio) purchased a 45,000-share stake in Dave & Buster's Entertainment Inc. (NASDAQ:PLAY) in the first quarter.


    Dave & Buster's Entertainment was founded in Dallas in 1982 when two entrepreneurs, David Corriveau and Buster Corley, decided to combine their businesses to form a single entertainment business. Corley operated a well-regarded restaurant, and Corriveau ran a place for fun and games for adults. They decided their businesses should merge under one roof to form what is now known as Dave & Buster’s Entertainment.

      


  • Zeke Ashton Sells 13 Stakes in 4th Quarter

    Zeke Ashton (Trades, Portfolio), managing partner of Centaur Capital Partners, sold 13 stakes in his portfolio in the fourth quarter. It was only the second time since 2013 that Ashton’s quarterly sales of existing stakes have been in double digits.


    Ashton sold his 497,500-share stake in Kulicke & Soffa Industries Inc. (NASDAQ:KLIC), a Singapore-based semiconductor, LED and electronic assembly equipment company, for an average price of $10.94 per share. The divestiture had a -7.15% impact on Ashton’s portfolio.

      


  • Zeke Ashton Purchases 140,000 Shares of Tetra Tech

    Guru Zeke Ashton (Trades, Portfolio)'s Centaur Capital Partners bought a 140,000-share stake in Tetra Tech Inc. (NASDAQ:TTEK) in the fourth quarter.


    Tetra Tech is a leading provider of consulting, engineering, program management, construction management and technical services. The company supports government and commercial clients by providing innovative solutions focused on water, environment, infrastructure, resource management, energy and international development.

      


  • Zeke Ashton's Top Trades During 4th Quarter

    Zeke Ashton (Trades, Portfolio) is the managing partner of Centaur Capital Partners and manages the investments for the Centaur Value Fund. He is also manager of the Tilson Dividend Fund. He manages a portfolio with a total value of $35 million, and the following are his most heavily weighted trades during the fourth quarter.


    The investor acquired 38,500 shares in Apple Inc. (AAPL) with an impact of 11.7% on the portfolio.

      


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