Portfolio Update 5.31.21

May 31, 2021

Here’s the VDL portfolio as of end of May 2021…

VDL Portfolio as of 5/31/21


There are 39 positions in total and the distribution of each bucket hasn’t changed much lately… Though cash is lower than the typical 10% or so that I normally carry… Despite markets at all-time highs, I’ve still been finding a handful of good ideas to invest in.

Distribution of positions



This group is still dominated by B Riley and Viatris at >10% apiece. B Riley has a great collection of businesses, some of which are producing super-normal profits at the moment. Viatris is in the 1st inning of its post-merger life with Upjohn, generics are rebounding, biosimilars are growing, and the company has plenty of cash to deploy.

Deluxe Corp announced in April they are making a large acquisition of a payment processor. This pushes the company further toward its higher growth segments, but they are levering up to 4x EBITDA to do so. Payments segment will have ~$600m in recurring revenue and is probably worth close to the current $1.9bn market cap of the company.


Meredith finally reported a transaction with the TV broadcast segment. This one is under review for a larger position.

Shareholders will get a ~$14.50 per share special dividend and shares in the “National Media Group” segment — digital media / print media — with a lot more clarity on the attractive portions of that business. At the current share price of $34, that gets you a $14 dividend and a $20 stock with 2x leverage trading at 5x EBITDA.



  • Vistra and Civeo are both new positions that were recently written up. Both of these have traditional value investing elements… trading at less than 5x free cash flow apiece with decent balance sheets (2-3x leverage). Vistra was beaten up thanks to winter storm Uri in Texas (its largest market). And Civeo… well I’m fairly confident no one wants to own a company providing lodging to remote oil and coal miners in Canada and Australia…
  • Exited Altria at a ~20% total return from original purchase back in February 2020 and swapped into Turning Point Brands ($TPB) over the past month. TPB’s main product is ZigZag brand rolling papers along with some other consumer products in tobacco and cannabis markets. The stock is cheap, growing, and has a good balance sheet.
  • H&R Block has started to reach my initial price target. I’ve trimmed a bit and may trim a bit more but I plan to let this play out a bit as they execute their plan to drive more digital banking and small business revenue.
  • Both NN Inc and Trecora are newer positions which need some time to play out.
  • Franchise Group had a massive insider purchase during May… a $36m purchase by the CEO. Following a couple of portfolio moves, FRG is a $37 stock with ~$3.30 in EPS in the coming year (11x earnings).
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No major updates in this category but here are a few brief tidbits…

  • Hallmark Financial ($HALL) recently fended off bankruptcy by exiting/reinsuring loss-making lines of insurance… Now they plan to IPO their specialty insurance segment which has an interesting setup.
  • Stephan Co ($SPCO) has had stable profits for 5-6 years now and is looking to grow via M&A to utilize remaining NOL balance. Currently a net-debt free business.
  • Both Babcock ($BW) and HG Holdings ($STLY) are jockey bets. The former is led by B Riley president Kenny Young, who has successfully restructured the business and bought stock while doing it. The latter is led by hedge funder Steven Hale. It’s a cash shell which now owns some real estate and other assets, unclear where this one is headed so far…
  • Hill International ($HIL) is a engineering/consulting firm in turnaround mode. The business has a good balance sheet and has had buyout offers in the past. It looks likely they’ll try to exit the business after completing the turnaround (perhaps sometime in 2022).
  • Yellow Pages ($Y.TO) is a new position. Declining business but carries a large and growing net cash position. Cash returns to shareholders should start kicking in heavily in 2H21.
  • Tandy Leather Factory ($TLFA) has been behind on their SEC filings for quite some time now but they’ve provided a few updates along the way. It’s a very low ev-to-revenue multiple with a net cash position and was a cash flow generator.
  • Advanced Emissions ($ADES) is generating guaranteed cash flow through the remainder of 2021 and has a fledgling chemicals business that is trying to reach profitability. New management team recently started exploring strategic alternatives and the stock has responded.