Founded in 2016, Askeladden Capital is a long-only value investing firm based in the Dallas / Ft. Worth metroplex. We focus on small and micro-cap securities.
We take concentrated positions in undervalued businesses that we believe have competitive advantages in markets with a positive secular outlook. We believe such companies have the potential to significantly increase their per-share earnings or free cash flow over time, through a combination of organic growth and sound capital allocation (whether M&A or return of capital to shareholders).
We aim to build a portfolio of 15-20 such companies. We are focused on years rather than quarters and typically underwrite our investments over a three-year horizon, although we are happy to hold for much longer if we believe there is substantial ongoing value creation. (For example, we have continuously owned several positions since the 2016-2017 timeframe.)
I’m a native Texan, but our firm is named after a character from Norse mythology who represents our approach to investing (and the world):
“In many folk tales, the Ash Lad is looked down upon as a seemingly drowsy ne’er do well, perhaps even as a loner or misunderstood eccentric, who spends too much time sitting by the fireplace lost in thought as he is poking the ashes.
As the typical story unfolds, the older brothers, tied to conventional thinking, typically fall flat on their faces. In contrast, it is the Ash Lad who comes up with creative solutions. He is smarter, more tactical, more receptive and more aware of the needs of others. He outwits trolls… [and] ultimately saves the princess.”
“In modern parlance, the Ash Lad is an individualist, free-thinker, and nonconformist who is capable of deep abstract, analytical thinking “outside the box,” or who can create a scientific paradigm shift. He is capable of acting as visionary or innovative early adopter.”
As demonstrated by our avian friend below, the path to value realization is not always linear, and patiently waiting for the market to realize the value of unloved companies can often be frustrating, particularly in an environment when trading sardines seem to just go up, and up, and up. But we believe that a company’s intrinsic value is underpinned by the cash flow it generates over time; if that cash flow is generated and thoughtfully allocated, then that will exert a gravitational pull (in an upward direction.)
Indeed, we’re often most excited by companies that have seen year after year of pressure on their stock price and trade at bombed-out valuations, so long as the fundamentals are intact; we’re fond on Don Yacktman’s “beach ball analogy.” As he describes it, undervalued stocks behave like a beach ball held underwater—the longer and deeper they’re suppressed, the stronger the rebound when they’re released.
We chose to constrain our AUM to preserve our ability to focus on the companies that are too small for most other investment firms to pay attention to; historically, a significant portion of our exposure has been in companies under $300 million in market capitalization. Indeed, for several of our positions, we are (or have been) the largest outside shareholder. Therefore, we are generally closed to new accounts, although we might have openings every so often if one of our investors needs to make a meaningful withdrawal and there are no existing clients in a position to backfill the capital.
Nonetheless, we are always happy to connect with and learn from other thoughtful investors, whether they’re fund managers, allocators, or private investors. I’m easiest to reach by email @ myfirstname [AT] mydomainname.com. Not actually pasting the email address is supposed to reduce spam, but I guess with our new AI overlords, it might not help anymore.
As for me, I’m Samir Patel, the founder, portfolio manager, and pretty much everything else. In lieu of a professional headshot, here is a photo of my assistant reporting on her latest primary research (recent scents in the neighborhood). She was subsequently reported to HR for inappropriate behavior in the workplace. But as referenced, I’m also the head of HR, so I “misplaced” the paperwork that I submitted to myself, and told her she was a very good girl. (Except for her obsession with committing squirrel genocide, and her tendency to put unattended food in a ‘safe place.’ But we’ll tackle that another day.)
You may be looking for “Poor Ash’s Almanack,” the massive compilation of book reports, mental models, and so on that I published years ago. See, here’s what happened. I built the site on a scaffolding of apparently unstable WordPress plugins. They refused to see a therapist, despite my repeated insistence. So one day, one of them had a mental and technological breakdown (not clear which one), and the site became so broken that I couldn’t even get into the dashboard to disable plugins.
Worse still, my automatic backup was – you guessed it – apparently not backing up. Sadly, I had to delete the site and start over again, and re-uploading the content is a time-consuming endeavor (particularly given all the interlinkage / etc.) I do plan to get the material back out there someday, but having a functioning website (which I haven’t had for maybe two years?) is at least a first step. The next step is having more than one page on the website… but for now, this is it!