Hi Octogenarian,
Two stocks here that are in our Emerging Companies Portfolio, both showing a paper loss of ~5%, similar to the market’s performance over the last few weeks.
Hansen Technologies Limited (HSN): We liked HSN 1h26 result in February, underpinned by its recurring revenue base, improved cost control and growing operating leverage. Revenue rose 7.3%, while EBITDA jumped 46% to $55.7m. However, the markets not convinced they can continue the turnaround with the stock cheap on an historical basis.
Importantly to MM, HSN is leaning into AI in a way we like, embedding it directly into its core billing and revenue systems – areas that are mission-critical, regulated and deeply integrated with customers. Sitting at the “system-of-record” layer, HSN benefits from proprietary datasets, high switching costs and complex workflows, creating a strong moat. With AI now improving efficiency, speeding up implementations and lowering costs, HSN is well positioned to extract value, supported by dedicated AI hubs and a growing suite of embedded solutions.
- We remain long and bullish towards HSN.
Regal Partners Limited (RPL): We did a deep dive into aggressive fund manager RPL in March Here. Recent weakness we think stems from weak performance in March across the majority of their equity strategies, with some associated negative press. While they still had net inflows, and their private credit, royalties and real asset strategies were solid, some of the equity strategies really struggled in March:
- Global Long Short -7.8%
- Small Companies -17.6%
- Market Neutral -21.2%
- Global Alpha -21.6%
RPL is a high beta play on higher markets. After a tough period from a performance perspective, with an associated sell-off in the share price, this is the time to buy (we think), given our positive view on markets for the remainder of the year. We hear April was a better period for them.
- We remain long and bullish towards RPL.
