Shorts continue to deliver impressive alpha
Vision has closed 4 short ideas so far in Q4. Wingstop, initiated in 3Q25 on the view that its rich valuation was unsustainable amid intense competition, category saturation and a disappearing customer cohort benefit, delivered 40%+ alpha. Duolingo, also a 3Q25 initiation, faced a massive influx of AI produced competition at lower cost and some slowing in KPIs, generated 30%+ alpha. Kadant, shorted in 2Q24 as a late-cycle capital goods name with deteriorating fundamentals but a “priced-for-perfection” multiple, added 30%+ alpha. Patrick Industries, initiated in 1Q25 given its peak multiple on overly optimistic estimates and exposure to excess inventory, weak demand and tariff/regulatory risks, generated 5%+ alpha. YTD, Vision has launched 13 new US shorts, 7 European shorts and 5 APAC shorts, with 2-3 more initiations expected before year-end.
Edition: 226
- 12 December, 2025
Industrials
Adapting to raw materials inflation, supply chain constraints and Covid disruptions - Bob Costigan explains why these global headwinds are, in fact, a net gain for KAI and why the company will continue to surpass street estimates. Improving fundamentals should lead to significant returns for shareholders over the next one to three years through a combination of earnings growth and price multiple expansions. Bob estimates adjusted EPS of $9.25 in 2022, $11.00 in 2023 and $12.65 in 2024. 1-Yr TP $250 (30% upside) and 3-Yr TP $350 (80% upside).
Edition: 140
- 22 July, 2022