Strat Becker's avatar
$4.3m follower assets
$BRCC Earnings Flop
$BRCC earnings report showed its core DTC business has slowed to no growth and that management cannot effectively control costs.

The stock is now down almost 50% since my report highlighting major issues facing the business and went below the $9.5 price target I modeled earlier today.

While my price target has been lowered since publishing, the risk/reward to be short is no longer as dramatically appealing as it was when I first released my analysis. My updated end of 2023 price target is $7.5 at this time

April 2022 Bloodbath - Names Down >30% Since April 1
April 2022 was one of the worst market months of all time. In fact, it was the worst since October 2008. Here are 100 stocks down >30% since April 1:


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Paul Cerro's avatar
$18.1m follower assets
CGC Q1'22 Quarterly Letter - Can you relate?
Cedar Grove Capital released its Q1'22 letter last week and wanted to share it with you all here.

While the quarter was a challenging one, we ended the quarter with 18% in cash and are strategically positioned to continue the rest of the year deploying dry powder in opportunistic areas.

Our holdings are included below - would love anyone's thoughts on them if they have any to share.

Current:

Closed:

Strat Becker's avatar
$4.3m follower assets
Margin of Safety on a Short Idea
I just wanted to re-share an original post I made on $BRCC a while back. While the stock is up since my report was published, the core business has decelerated more than expected to just 2.9%, something I believe they will not be able to materially reaccelerate. Furthermore, the sales and profit outlook on the physical store business have been revised to the downside, and the sell-side consensus no longer expects the company to be profitable by the end of 2023 as it initially did under two months ago.

While the wholesale business may have upside potential, it in no way justifies the stock trading at over 12x 2023 sales without profitability in my opinion. It's times like this where it's important to not let price action within a month force a sentiment change and evaluate the long term picture. In this case I merely see a stronger margin of safety established for a thesis that was already sound.

There are a bunch of wall street adages for this kind of situation.........and all are bullish, e.g. don't marry your stocks, don't fight the tape, the trend is your friend etc.
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Paul Cerro's avatar
$18.1m follower assets
Cedar Grove Capital Q1'22 Investor Letter
Hi all,

For anyone interested, Cedar Grove Capital will be releasing its first investor letter next week for Q1'22.

This letter will encompass our holdings, position sizing, returns, my thoughts for the portfolio going forward and select commentary for certain positions.

Click the link below to subscribe and get it when it comes out. cedargrovecapital.substack.com

Paul Cerro's avatar
$18.1m follower assets
For new investors to Commonstock - read below!
Good afternoon!

For those of you that just joined Commonstock or followed me, welcome!

A little about me, I run a L/S US equities portfolio, called Cedar Grove Capital based out of NYC, focused on the consumer(tech) and cannabis industries.

I'd highly recommend you check it out 👉🏼 https://cedargrovecapital.substack.com/

What you get when you subscribe to our newsletter:
  • Weekly-ish Chart of the Week emails where I break down a chart into a few summarized key points to help inform you or keep you up to date on certain topics (ex. How Much is Each "Subscriber" Worth?)
  • Deep dive analysis into an industry that has significant growth potential (ex. Vertical Farming: Don’t Sleep on this Opportunity)
  • Trend I’m Watching which dives into a trend that peeks my interest enough to look into companies that can either benefit or be hurt by such trend (ex. Coffee Prices Getting Squeezed)
  • 1-2 monthly deep dives into a stock I either have a position in or am considering taking a position in. These posts are not short (avg. word count ~3,000), and include many aspects including interviews with users, product reviews, and my model output for valuations (ex. FIGS: Not the lululemon of Healthcare )
  • Personal Thoughts where I express my opinions about a certain topic related to finance, the stock market, or investing. (ex. Uh, Tesla is Worth How Much Now?)
  • Full transparency of my portfolio so you can track my performance and weighting within my portfolio. This can be used, to an extent, to help formulate your own portfolio management.
  • Quarterly updates on my portfolio that highlight my buys and sells, if any, as well as fund commentary and thoughts going forward.
  • BONUS: All my posts will be accompanied by an audio option (2022 onwards). For any reason you cannot read the posts, I’ll record a ‘read aloud’ of the same article so you can listen.

Companies that I've publicly published research on are below:


Companies that I've held/hold positions in but did not provide public research are below:


If you're interested in getting detailed coverage of the space, deep dives into single names and industries all while accompanied by an audio version, I highly recommend you click below and sign up for the newsletter. It's completely free! 👉🏼 Newsletter + Website
Paul Cerro's avatar
$18.1m follower assets
My "short" targets
I've come for...


I have my eyes set on...

Taylor's avatar
$94.7m follower assets
$BRCC (Black Rifle Coffee Company) - My Next Buy
Black Rifle Coffee Company officially completed it’s merger with SilverBox Engaged Merger Corp to list on the stock market under the symbol $BRCC. On its first day of trading, the stock popped over 30%, closing over $15 at market close.

While this company has been on my radar for a while, I lost track of the listing with all of the other noise going on with the market. However, this company should not be left out of the conversation when it comes to brand awareness and recognition.

Founded in 2014, my first experience with the company came while I was in the Coast Guard. Prior to every deployment, one of my fellow Junior Officers would order pounds of the coffee to take with us for the months we were underway. Always good coffee and appreciated, I’ve never considered myself a coffee “aficionado” and never worried about the brand of coffee in my cup, as long as I had the caffeine.

Then, in 2021, I got a chance to listen to the CEO Evan Hafer speak on the Joe Rogan Experience Podcast, and I really appreciated and connected with his outlook on the world and running a business. Currently, 50% of $BRCC employees are either veterans or spouses of veterans. Additionally, in 2021 alone, they donated over $3 million dollars worth of coffee to the Military, Law Enforcement, and First Responders. Entirely owned and operated in the United States, the company really spoke to my patriotic roots.

Yet, to make an investment in a company worthwhile, there has to be a lot more than just a “feel good story” behind the thesis. After completion of the merger, the company was valued at $1.7 billion dollars at the $10 share price commonly utilized with SPAC investing. With its current price, the valuation sits at ~$2.55 billion.

To back up its performance, BRCC estimated that for 2021, it’s expected revenue is $230 million and that by 2023, the estimated revenue will be $430 million, averaging at a respectable 37% CGAR.

More impressively is their online presence and it’s marketing outreach. BRCC has evolved into much more than just a coffee company. Like $COOK $LULU or $PTON BRCC has created an entire lifestyle brand around its product and is setting up a much larger ecosystem in the future. In addition to coffee and merchandise, BRCC has currently opened up 16 “outposts” which serve as coffee shops, merchandise shops, and a general socialization space for all things Black Rifle Coffee. By the end of 2023, they expect to have over 78 outposts up and running throughout the United States.

There is a significant runway for this company to continue expanding in the coffee and lifestyle brand space. A strong, powerful message and mission, coupled with an aggressive, opportunistic management and leadership team will only continue to assist $BRCC deliver to shareholders over the next decade.

Additional financial and strategic information can be found here:


#LONG
Commonstock is a social network that amplifies the knowledge of the best investors, verified by actual track records for signal over noise. Community members can link their existing brokerage accounts and share their real time portfolio, performance and trades (by percent only, dollar amounts never shared). Commonstock is not a brokerage, but a social layer on top of existing brokerages helping to create more engaged and informed investors.