Weekly Digest – 22 September 2025
3 more stock ideas and a brief update
Macro News:
No major surprises last week. I’m not intending to comment heavily on macro as there is plenty of commentators already doing that job. The only notable point I’ll make is inflation in the UK came in at 3.8% and reinforces my belief that we are in a period that benefits real assets.
Sometimes a simple-sounding idea can do a lot of heavy lifting. The simple idea that is acting as my north star, is that when private sector debt to GDP is elevated you have to worry about private sector bankruptcies bringing that debt down. In which case, worry about deflation and buy bonds to hedge equity risk.
When public sector debt to GDP is high, worry about inflation bringing it down and buy real assets to hedge your equity risk.
This framework continues to serve me well.
Stock Update:
By way of follow up to last week’s digest: Last week's post
Nektar Therapeutics finished up 12.53% last week. They announced positive trial results last Thursday that suggest a longer lasting effect from their drug Rezpeg. I’m still bullish on the stock and not looking to trim the position yet.
Three stocks to watch:
Power Metallic Mines ($PNPN.V)
Small Canadian listed mining exploration company. Current market cap is $263m.
They have a promising polymetallic deposit – meaning multiple metals (nickel, copper, silver, gold and PGMs).
The polymetallic nature of the deposit is advantageous because it provides multiple revenue streams from a single mining operation. Instead of betting on just one commodity price, Power Metallic can extract and sell nickel, copper, silver, gold and platinum group metals from the same site. This diversifies their revenue risk - if copper prices fall, strong gold or nickel prices might offset the impact. It also improves the overall economics since the fixed costs of mining and processing infrastructure get spread across multiple valuable outputs.
The CEO put out a short twitter video last week, saying they are releasing assay news on Monday as well as some other unspecified good news they just received.
The thing that makes this company really interesting to me, right now, is that they intend to list in the US, in October. I always look out for these occasions. When a small cap stock with an interesting story suddenly becomes more easily available to US retail investors – rapid repricing can occur. The investor base also includes some well known mining investors, that gives some additional comfort to generalist investors.
I’m long the stock. It’s a speculative stock as with all mining exploration companies, and will also move with commodity prices.
It is available on the HL, Saxo, & interactive investor platforms.
Texas Pacific Land ($TPL)
The biggest company I’ve written about so far, with a whopping $21b market cap.
Owns almost 900,000 acres of land in the Permian Basis and gets royalties on oil & gas produced on their land. In recent years started earning royalties on water sales as well as developing a water business – similar to Waterbridge (link below) which carried out its IPO last week.
It turns out that dealing with water issues is a big issue when producing oil and gas in the Permian, and the amount of water to be dealt with is a growing problem.
But back to the energy side of the business.
TPL is my only energy play at present. I will probably do a longer piece on it shortly. One thing I think the market is missing is the outlook for natural gas pricing at the Waha terminal, which is frequently at a big discount to Henry Hub. There are reasons why this looks likely to change in the next couple of years, and TPL would benefit as their gas royalties are priced at Waha prices.
This is more of a buy and hold, compounder type of stock holding for me – one that adds something different to my portfolio which has a lot of less liquid small cap stocks.
Risks include commodity price volatility and a premium valuation (43x trailing P/E), though this multiple may be justified for a business owning non-depreciating land assets.
Seaport Entertainment Group ($SEG)
Back to the small caps! ($311m). This one was a spin off from Howard Hughes last year. It immediately caught the attention of many investors who have read Joel Greenblatt's oddly-titled but excellent book on special situation investing. The book advised the reader that any time you see a spin off with a rights issue – stop what you’re doing and start researching.
Seaport was spun off as a slightly odd collection of assets that frankly hadn’t been working for Howard Hughes. The assets include air-rights over a Las Vegas hotel, a baseball team, a stadium….and most interesting to me, a bunch of New York real estate.
Given the small size, most institutional investors wouldn’t be doing the work on Seaport. Even if they did and found it interesting, they couldn’t take a meaningful position – so it’s not worth the research time to them.
It is to us though.
When I was researching the business last year, I found a very good Substack account belonging to Chris Waller. He’s a former small-cap equity analyst, now running his own fund in the US. I paid to subscribe to his Hidden Gems Investing Substack as he put out a very good 35-page report on Seaport (and another this last week as follow up). His research reinforced my view that the assets are worth considerably more than the current market cap would suggest.
The way I’m looking at Seaport now is:
The company has $162m of net cash on its balance sheet.
The value of the combined properties is estimated at more than double the market cap.
I view it as effectively a turnaround situation. As Greenblatt’s book also stated, it is often the second year of a spin-off where the new management has had a bit of time to work when the real outperformance happens. It was August 2024, when the spin off completed, so we are now in that phase.
The management have made sensible changes to make the New York real estate complex, more of a destination venue. Sensible things like putting a roof over an outdoor terrace, so you can hold events in the winter as well as summer are welcome.
Signing an anchor client for the destination in the form of an immersive experience venue (Meow Wolf) also sounds like progress.
I will leave the reader to explore the company in more detail at their leisure (the Value Hive podcast had an episode with Chris Waller on Seaport).
I don’t have an immediate catalyst in my expectations; this is a position that I expect to play out over the next 18 months or so.
The current share price is $24.5, I would start looking to scale out of the position, all other things staying constant, if it got above $40.
Risks include the execution challenges of turning around underperforming real estate assets and the inherent illiquidity of property investments.
That’s all for this weekly digest. Have a great week.
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