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European Investing Summit 2026: Key Takeaways and Idea Highlights

MOI Global Equity Research — Tue, 20 Oct 2026 13:38:01 GMT

We are hosting European Investing Summit 2026 from October 20-23, and ten sessions are already available for replay. We will post additional sessions this week. Each session includes a video of the presentation, the slides, and an edited transcript. Below, we highlight what each speaker found and why we think the sessions are worth your time.

This year’s ideas share a common thread: businesses that have absorbed several hard years, at prices that still assume the worst. The speakers found that pattern in UK and French housebuilders, prime European offices, Turkish retail and German semiconductor equipment, and even in a household name on the other side of the Atlantic. The case for Europe as a whole starts with the numbers.

Brian Chingono of Verdad argues that Europe’s deep-value stocks are priced for a repeat of 2022 that the energy system is better prepared to absorb. The broader European market has re-rated to 1.85x book, within 4% of its 30-year average, while deep-value stocks still trade at 0.66x, and the spread between the two has rarely been wider. When it was wider than its median, deep value outperformed the market by 7% annualized over the following three years. Verdad’s return bridge points to a 17.2% five-year expected return for deep value, against 13.2% for the market. Watch Brian’s full case for European deep value, including his example, Delfingen.

Nitin Sacheti thinks the AI trade has missed a near-monopoly in German semiconductor equipment. In Nitin’s view, PVA TePla’s scanning acoustic microscopes are the only production-worthy tool for finding hidden defects in HBM stacks and hybrid bonds, and its crystal-growth furnaces sit at the start of the silicon carbide and indium phosphide supply chains. Orders reached a record €121.6m in Q1 2026, a 2.2x book-to-bill. Replay Nitin’s session to see how he gets to a €100 target.

Roshan Padamadan believes a US listing could show that Grifols’ business outside the US is priced at less than nothing. By Roshan’s estimate, selling 15-20% of US Biopharma would value the division near €20bn, more than the group’s enterprise value. Meanwhile, free cash flow has turned positive, leverage is falling, S&P has raised Grifols two notches, and the shares trade at about 9.5x EV/EBITDA, against a five-year average of 14.2x. Watch Roshan’s session to hear why he sees the governance discount as overblown, and why he prefers the Class B shares.

Simon Caufield believes Barratt Redrow, the UK’s largest housebuilder, trades at a third of its liquidation value. At 292p, the £4.0bn market cap sits against £6.2bn of tangible net assets, including £770m of net cash, after a slow-motion downturn that Simon considers worse than the financial crisis: since 2022, completions have fallen 23% and real revenue 44%. His counterintuitive point is that a housing slump releases cash, because every lost sale means fewer plots to buy. Halting land purchases would free about £12bn, three times the market cap. Replay Simon’s session to see why he puts intrinsic value above 4x the share price.

Sam Ziff looks across the Atlantic to a century of Disney franchises at 14x forward earnings. The Walt Disney Company trades near the low end of its 40-year valuation range, against a 21x median P/E, even though streaming has swung from a $4.0bn loss in FY22 to a 13% margin, and the parks earn about 60% of segment profit. Snow White, Pinocchio and Bambi, all made between 1937 and 1942, still make money for Disney today. Watch Sam’s session for his $150 base case, 42% above the share price, and the five risks that could change his mind.

Stuart Mitchell sees the Channel Tunnel as a forgotten, high-quality asset running at well under half of its capacity. Getlink, formerly Eurotunnel, holds the tunnel concession until 2086, turned €1,595m of revenue into €347m of free cash flow in 2025, and runs 450 trains on peak days against capacity of 1,000. New passenger routes to Frankfurt, Cologne, Geneva, Basel and Zurich, new entrants Virgin Trains and Trenitalia, and a freight recovery as Brexit frictions ease could fill the gap. Watch Stuart’s session to hear why he believes the value could double.

Jeremie Couix has found France’s largest single-home builder priced as if its cash flow will vanish. Hexaom trades at about 1.2x 2026 EV/EBITA, with €71m of net cash against a market cap of about €144m, a free cash flow yield near 20% and a 4-5% dividend yield. French new-house sales collapsed from 140,000 in 2021 to 51,000 in 2024, and some 650 builders have been liquidated since 2023, yet Hexaom’s gross margin reached 23.6% in H1 2026 and its orders are recovering. Replay Jeremie’s session to learn why the business carries no land risk.

David Autin calls Asmodee the toll road of a growing tabletop gaming industry. Asmodee publishes Catan and Ticket to Ride and distributes the Pokémon and Magic: The Gathering trading card games through a network that a rival would need about a decade to replicate. Trading card game sales nearly doubled in three years, to €1.02bn. Freed from Embracer, Asmodee generates €170-200m of free cash flow a year and has restarted acquisitions. Replay David’s session for his base, bull and bear cases.

Mesut Ellialtıoğlu makes the case that Migros is one of the most direct ways to own Türkiye’s growing middle class, at less than half the sector multiple. Turkish equities trade at 6.7x forward earnings, against 11.5x for emerging markets, and Migros at about 4x EV/EBITDA, against a sector near 9x, even though its dollar sales grew 24% a year from 2021 to 2025. Online reached 23.1% of sales, nearly three times the level at global peers, because its 3,830 stores double as fulfillment hubs. Replay Mesut’s session for the three growth engines behind his target of about 50% upside.

Alirio Sendrea sees prime offices in Paris, Madrid and Barcelona selling at roughly half of asset value. Colonial SFL, which owns five of the nine trophy office buildings in Paris, trades at a 49% discount to EPRA NTA after rising rates, work-from-home and AI fears hit European REITs. Alirio argues that the scarcity of prime central business district space gives Colonial pricing power: rent growth has beaten indexation by 350bp a year on average since 2017. Watch Alirio’s presentation for his €7.4 blended target, 47% above the share price, plus a 6.3% dividend yield.

More sessions are on the way. We will post additional sessions from European Investing Summit 2026 this week. Paying subscribers can replay every session, download the slides and read the full transcripts.

European Investing Summit 2026 is held from October 20-23, 2026. The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

European Deep-Value Microcaps: Priced for a Repeat of 2022

MOI Global Equity Research — Tue, 20 Oct 2026 12:56:51 GMT

Brian Chingono of Verdad presented his thesis on European deep-value microcaps, featuring Delfingen (France: ALDEL), at European Investing Summit 2026.

Thesis summary:

Brian argues that Europe’s scariest corner, deep-value microcaps, offers patient investors the most attractive compensation. Every September since 1997, Verdad screens European stocks above $40M market cap for the cheapest quartile by price/book with above-median free cash flow yields. With no size target, the screen lands in microcaps: the median firm is worth about $300M, and 73% fall within the MSCI Europe Micro Cap Index’s size range. The segment has outperformed the market by 5% annualized since 1997.

With low gas inventories and Strait of Hormuz disruptions, the headlines echo 2022, when euro-area inflation peaked at 10.6% and took three years to return to 2%; it now stands at 3.8%. After 7.7% price-driven growth in 2023, deep-value revenue stalled near zero in 2024-2026, against a 3.4% long-term average. Companies cut costs: market EBIT outgrew revenue in each of the past three years, and deep-value EBIT, after a 2% decline in 2025, turned positive in 2026.

Prices have not followed. The market has re-rated from 1.65x book in 2023 to 1.85x, within 4% of its 30-year average, but deep value still trades at 0.66x, near 2023’s 0.63x and a 15% discount to its 0.77x average. Its valuation spread versus the market, 0.35x against a 0.40x median, has rarely been wider, mainly around 2000 and in 2020-2021. When spreads were wider than the median, deep value outperformed by 7% annualized over the following three years.

Verdad’s bridge implies a 17.2% five-year expected return for deep value versus 13.2% for the market: a 12.1% free cash flow yield, 1.9% historical EBIT growth and 3.2% from re-rating, so about 70% is cash available for near-term distribution. Brian sees the 2022 analogy breaking down: Europe added a third more LNG regasification capacity, Norway and the US supply 57% of its gas, and gas prices are roughly a quarter of their 2022 peak. Yet equities are priced for a repeat.

Brian’s example is Delfingen, a family-controlled French wire-protection specialist with an €81M market cap, trading at 3.6x EV/EBITDA, 0.5x book and a 30% free cash flow yield. Its IMPULSE 2026 restructuring lifted the operating margin from 5.0% in 2022 to 9.0% in 1H 2026 and cut leverage to 2.1x. Industrial, 17% of 2025 revenue at a 26% EBIT margin, could alone be worth most of the €208M EV at peers’ 12-15x EBIT. Risks include the auto cycle (1H 2026 revenue fell 8%) and limited liquidity.

Disclaimer

European Investing Summit 2026 was held from October 20-23, 2026. The content of this website is not an offer to sell or the solicitation of an offer to buy any security. The content is distributed for informational purposes only and should not be construed as investment advice or a recommendation to sell or buy any security or other investment, or undertake any investment strategy. There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from any information set forth on this website. BeyondProxy’s officers, directors, employees, and/or contributing authors may have positions in and may, from time to time, make purchases or sales of the securities or other investments discussed or evaluated herein.

PVA TePla: Scarce-Equipment Near-Monopoly the AI Trade Overlooks

MOI Global Equity Research — Tue, 20 Oct 2026 12:56:26 GMT

Nitin Sacheti of Papyrus Capital presented his thesis on PVA TePla (Germany: TPE) at European Investing Summit 2026.

Thesis summary:

PVA TePla is a German maker of scarce, hard-to-replicate equipment that sits at the center, or the very start, of the silicon carbide (SiC), indium phosphide (InP), HBM and silicon supply chains. Material Solutions (€172m of 2024 revenue, ~64%) builds the furnaces that grow crystal boules for slicing into wafers; Metrology (€98m, ~36%) inspects finished chips. Nitin calls it a near-monopoly the AI trade hasn’t noticed: one of the best hardware-focused PMs he knows had never heard of it.

Acoustic metrology, ~80% of Metrology and ~30% of the group, is the jewel. Nitin sees PVA’s scanning acoustic microscope (SAM) as the only production-worthy tool for finding buried voids and delaminations in HBM stacks and hybrid bonds in-line. X-ray costs three to four times as much and is far slower, so it can’t run on the line. PVA’s in-house zinc-oxide transducers reach 2,000 MHz, which no competitor builds itself. Metrology earns 45-55% gross margins, versus 24-30% in Material Solutions.

Nitin models 40% annual acoustic revenue growth, against capital markets day (CMD) guidance of 18-22%, as HBM stacks rise from 12-high toward 16- and 20-high and hybrid bonding spreads to logic. In Synthesis he assumes 17% growth versus 5-11% guidance: the SiC shift from 6- to 8-inch wafers forces net-new furnace purchases, PVA targets a share gain from 16% to 25%, and InP, the substrate for AI data center lasers, sits outside both CMD and consensus.

Orders reached a record €121.6m in Q1 2026, a 2.2x book-to-bill, and revenue should follow: metrology tools convert in four to eight months, Material Solutions projects in 12-18. Nitin expects revenue to grow from about €245m in 2025 to about €595m by 2029, with Metrology rising from 40% to 55% of the mix. Gross profit climbs from about €79m to over €260m and EBIT margins from mid-to-high single digits to the low 20s. He rates management well; the CEO is a former CFO.

Applying 21x to Nitin’s €4.67 estimate of 2029 EPS yields a €100 base target, about 2.4x the €42 price on his deck, with “meme” optionality to €150. The shares traded near €29 at the time of the talk, amid a pullback in AI capex stocks. If execution falters, he sees a takeout at €45-60, since PVA is already qualified at major logic and DRAM makers. Risks include furnace cyclicality, a better rival technology, and thin service coverage until mid-2027.

Disclaimer

Grifols: Deleveraging Plasma Leader With US Listing Catalyst

MOI Global Equity Research — Tue, 20 Oct 2026 12:51:27 GMT

Roshan Padamadan of Roshan 30 presented his thesis on Grifols (Spain: GRF.P) at European Investing Summit 2026.

Thesis summary:

Grifols is a Barcelona-based leader in plasma-derived therapies, founded in 1909, with FY2025 revenue of €7.5bn and adjusted EBITDA of €1.8bn (24.3% margin). It runs 400+ donation centers, about 280 of them in the US, which supplies ~70% of the world’s plasma. Roshan notes that many countries bar paid donation, so only three or four scaled global players compete, and the donor network itself is the moat.

Biopharma (immunoglobulins, albumin, alpha-1 and specialty proteins) is 88% of revenue and earned a 26.9% EBITDA margin in FY2025; the US and Canada contribute 58%. Immunoglobulin revenue grew 12.8% at constant currency in H1 2026, with SCIG up 17.7%, while CSL Behring’s IG was flat. Albumin fell 14.2% on China pricing. Management guides FY2026 adjusted EBITDA up 5-9% at constant currency at a margin of at least 25%.

The core argument is a possible minority IPO of US Biopharma: selling 15-20% while keeping control could net about €5bn, by Roshan’s estimate, valuing the division near €20bn, more than the group’s enterprise value, so the ex-US business comes for negative value. Supply is the second lever. The Egypt joint venture, opened in 2021, collects ~1m liters in 2026 and targets 3m by 2029, lifting ex-US supply ~2.5x and cutting cost per liter. Alpha-1 SPARTA trial data, due late 2026, adds optionality.

Roshan sees the governance discount as overblown. After the 2024 Gotham City short report on a related-party plasma deal, the regulator took no action and most of the board changed; Mason Capital (3.2%) helped defeat a 2024 take-private near 0.8x book. Free cash flow turned positive at €91m in H1 2026. Credit-agreement leverage fell from 4.6x to 4.2x (5.4x reported), 2027 maturities are refinanced and S&P has raised Grifols two notches to BB-. The target is 3.5x or less by year-end 2027.

On October 7, 2026, Class A traded at €9.95 and the ADR at $7.50; the ~€5.9bn market cap sits against €7.8bn of net debt, making the equity a levered call. Shares trade at ~9.5x EV/adjusted EBITDA and ~13x earnings versus five-year averages of 14.2x and 23.4x. Roshan sees a ~50% re-rating, in line with the €15.01 consensus target, and prefers Class B, ~30% cheaper for a one-cent dividend gap. Risks include a stalled IPO, the suspended Winnipeg license, China albumin and EUR/USD.

Disclaimer

Barratt Redrow: UK Housebuilder at a Third of Liquidation Value

MOI Global Equity Research — Tue, 20 Oct 2026 12:51:08 GMT

Simon Caufield of SIM Limited presented his thesis on Barratt Redrow (UK: BTRW) at European Investing Summit 2026.

Thesis summary:

Barratt Redrow is the UK’s largest housebuilder, with about £6bn of revenue across three brands: Barratt for first-time buyers, mid-market David Wilson (acquired 2007) and up-market Redrow (acquired 2024). A year after Simon pitched it near £4, the shares trade at 292p, a £4.0bn market cap against £6.2bn of tangible net assets that include £770m of net cash. At 0.65x net tangible book, the stock has fallen from half to a third of his liquidation value.

Simon calls Barratt the best operator in the industry. Scale funds off-site factory production of kitchen and bathroom pods, timber frames and roof cassettes, while three brands and price points widen appeal, speed sales and make larger sites viable. The culture stresses efficiency, return on investment and a strong balance sheet, and land buying is signed off centrally by the CEO or CFO, a guard against overpaying for land. A Competition and Markets Authority study puts the 12 largest UK builders’ average ROCE above 20%.

Simon argues the bearish housing macro is irrelevant. Sites of about 200 plots take four years to sell, so builders hold three to four years of land as inventory, and each lost sale means four fewer plots to buy, releasing “oceans of cash.” Falling prices are offset by a disproportionate drop in land costs, with a three-to-four-year lag. In 2008-2009, Barratt’s volumes fell 29% and EBIT 94%, yet operating cash flow hit £408m, above its market cap, as land prices fell 55%.

Simon sees a hidden, slow-motion shock since 2022 that was worse than the GFC: completions fell 23%, and flat prices against 27% inflation imply a 44% real revenue hit, while EBIT fell 56% and the shares 65%. Land bought cheaply in 2022-2026 should lift margins. In July, under pressure from Phoenix Asset Management, Barratt announced a £386m buyback, about 9% of its market cap, and a buyback-led return policy. New CEO Dean Banks has launched buybacks three times before.

Simon estimates that halting land purchases and building out inventory would release £12bn over three to four years, or 3x the market cap, and puts intrinsic value above 4x the share price. The stock trades at 7x EV/EBIT and 12x earnings, after falling 25% in a year as five-year gilt yields rose 100bp. Risks include the Renters’ Rights Act, distressed selling by Vistry, a CMA price-collusion lawsuit, cladding remediation, build-cost inflation and a payout policy of 50% of earnings.

Disclaimer

Disney: Century-Old Franchises at 14x Forward Earnings

MOI Global Equity Research — Tue, 20 Oct 2026 12:50:49 GMT

Samuel Ziff of Oldfield Partners presented his thesis on The Walt Disney Company (US: DIS) at European Investing Summit 2026.

Thesis summary:

The Walt Disney Company is a $180bn business whose IP goes back over a century. Sam notes that Snow White, Pinocchio, Fantasia, Dumbo and Bambi all came out between 1937 and 1942 and still earn money through Disney+, the parks and merchandise. Disney took a lot of pain moving from cable to streaming; Sam believes it is through the worst, yet the shares trade at a multi-year low valuation.

The moat is the flywheel Walt Disney sketched in 1957: a hit film creates characters that sell toys and bring visitors to the parks, and animated characters outlive any actor. Disney took $6.6bn at the 2025 box office versus $4.3bn for Warner Bros., leads licensed retail sales at $63bn, and runs eight of the ten most-visited parks. Stitch merchandise rose from $0.2bn in 2019 to over $4bn in FY2025; Toy Story has earned ~$16.2bn of direct revenue from the $7.4bn Pixar deal.

Experiences (parks, cruises and products) earns about 60% of segment profit, $10.0bn of $17.6bn in FY25, from roughly 40% of revenue at a ~30% margin; that profit has doubled since FY15. A Disneyland ticket rose from $1 in 1955 to $224, 8% a year compounded and ~20x in real terms. A $60bn ten-year plan targets double-digit returns, two new ships lift cruise capacity 50%, and Abu Dhabi follows the capital-light Tokyo model with partner Miral.

Sam argues Disney rebuilds its revenue mix whenever distribution changes. TV money funded Disneyland; the $19bn Capital Cities/ABC deal brought ESPN and lifted Media Networks profit from $1.7bn (FY1997) to $7.8bn (FY2016). Streaming lost $4.0bn in FY22; after Bob Iger returned, price rises, a password-sharing crackdown and folding in Hulu brought breakeven in FY24 and a 13% margin in Q3 FY26. Free cash flow runs at 90-95% of earnings, and buybacks have cut the share count about 5% from its post-Fox peak.

At $105 (28 September 2026), Disney trades at 14x FY27 consensus EPS of $7.50, versus a 21x median P/E since 1980, and 1.9x price/sales (EV/sales 2.3x). Sam’s base case, 20x on $7.50, gives $150, 42% upside; his bear case, 12x on $6.50 in a recession, gives $78, 26% lower, which he sees as temporary. Risks are the parks cycle, the creative hit rate (no original $1bn film since Zootopia), linear TV and sports costs, ROIC near 9% since Fox, and untested CEO Josh D’Amaro.

Disclaimer

Getlink: Underutilized Channel Tunnel Concession Running to 2086

MOI Global Equity Research — Tue, 20 Oct 2026 12:50:17 GMT

Stuart Mitchell of S. W. Mitchell Capital presented his thesis on Getlink (France: GET) at European Investing Summit 2026.

Thesis summary:

Getlink, formerly Eurotunnel, was established in 1986 with a concession to build and manage the Channel Tunnel until 2086. LeShuttle leads the Channel crossing with 35% of truck and 56% of car traffic, while Eurostar, which pays Getlink a fee for every passenger, holds 77% of London-Paris and 49% of London-Amsterdam. Stuart calls Getlink a forgotten investment: a relatively small company the sell side barely researches while investors chase AI and other hot areas.

Eurotunnel, including LeShuttle and Eurostar, earned 78% of 2025 EBITDA. Eleclink, a high-voltage cable through the tunnel that lets Britain import French nuclear power when gas prices are high, grew from nothing to 18%; Europorte freight logistics added 4%. With the investment sunk and depreciated, Getlink turned €1,595M of revenue into €347M of free cash flow, a fountain of cash. Yet the tunnel runs 450 trains on peak days against capacity of 1,000, between a half and a third of its longer-term potential.

Freight, hit by Brexit, remains 25% below 2019 levels. Stuart expects it to recover as the Border smart-border system, customs scanners checking rail freight at 20 km/h and a Sanitary and Phytosanitary Agreement cut paperwork. Ferry rivals such as Irish Ferries face a new seafarers’ wage law, emission charges and higher energy costs; Eurotunnel’s truck share rose 160 bps year over year in June 2026. New shuttles running at 160 km/h, against 100-120 km/h today, and new signaling should lift throughput.

Passenger rail is the more tangible driver. Eurostar plans 30% more capacity, Virgin Trains and Trenitalia plan to enter in 2029/2030, and a four-to-five-hour London-Frankfurt/Cologne route in the early 2030s opens a market of 3M airline and 1.7M rail passengers; Geneva, Basel and Zurich routes reach 5M more. Getlink’s chart shows passengers rising from 12M in 2025 to 22M by 2035+; Stuart thinks 30M is possible. Once a capex blip ends in about 18 months, Getlink plans to pay out essentially everything.

H1 2026 EBITDA rose 12% to €404M, and 2026 guidance was upgraded to €835M-€870M. Stuart sees the 4.5% dividend yield as too high for a super-quality asset whose cost of capital should be nearer 6%, implying a doubling in value; his DCFs point to double to triple the share price. He sees total returns of at least 9% a year, nearer 12-13% if more optimistic, and expects an eventual buyout, perhaps by Eiffage. Risks include COVID-type shocks and the guesswork in modeling new routes.

Disclaimer

Hexaom: Net-Cash French Home Builder Trading Near 1x EV/EBITA

MOI Global Equity Research — Tue, 20 Oct 2026 12:25:29 GMT

Jeremie Couix of HC Capital Advisors presented his thesis on Hexaom (France: ALHEX) at European Investing Summit 2026.

Thesis summary:

Hexaom, founded in 1919 in Alençon, Normandy, and now run by its fifth generation, is France’s largest builder of single homes, with a market share a bit below 10%. A buy-and-build drive after its 2000 IPO consolidated about 18 regional builders; it now runs 50+ local brands across 12 regions with ~1,400 employees and subcontracts all building work. Revenue peaked near €1.0bn in 2021-23, fell 29% to €728m in 2024, and rose 12.3% to €344m in H1 2026.

Jeremie notes that single homes (€460m 2025 sales, €15m EBITA) carry no land risk and neutral working capital: the buyer’s bank releases stage payments as works progress, while 2,000+ subcontractors are paid with a 70-80 day delay. Working capital averaged about zero in 2007-2018; gross margin averages 18%. Completion-guarantee insurance, held by ever fewer builders, is a soft barrier; the network and cheaper sourcing are the real edge. Promotion (€100m sales, €5m EBITA) controls land through ~5% options and has €174m of backlog.

French new-house sales fell from 140k in 2021 to 51k in 2024 (2006-25 average: 117k); Jeremie expects a structurally lower 100-120k. Hexaom’s rolling 12-month orders are up 25.1% from the trough, though 2026 orders were down 8.6% through August. 2025 orders, up 55% in value, secure ~20% revenue growth and a >5% margin in 2026; 2027 is partly secured, 2028 at risk. Each one-point rate rise cuts buying power by ~10%, yet a median household can still finance a home at 5%.

Some 650 builders have been liquidated since 2023, including Geoxia and AST Groupe, whose gross margins collapsed with 2022 inflation. Hexaom’s held up far better and reached 23.6% in H1 2026, versus a 20.0% average for 2017-2025, while opex, after rising 53% by 2022, now sits below 2017 levels. Management buys selectively (75.5% of HDV; AST’s wood factories for €1m with Trecobat) and prefers organic share gains. Jeremie would like a buyback, which management has said it could consider.

At about €21, the market cap is ~€144m, with €71m of net cash in June 2026. Jeremie expects net cash of €13, equity of €38 and tangible equity of €22 per share by end-2026, and puts 2026 EV/EBITA at 1.2x, FCF yield near 20% and dividend yield at 4-5%. A 10% reverse DCF implies cash flow vanishing after ~€30m a year in 2026-27. BPCE, carrying its stake at €55 per share, is a possible catalyst. Risks: interest rates, French politics and 2028 orders.

Disclaimer

Asmodee: The Toll Road of a Growing Tabletop Industry

MOI Global Equity Research — Tue, 20 Oct 2026 12:24:53 GMT

David Autin, a Paris-based private investor, presented his thesis on Asmodee Group (Sweden: ASMDEE B) at European Investing Summit 2026.

Thesis summary:

Asmodee publishes its own tabletop games, such as Catan, Ticket to Ride and Exploding Kittens, and distributes third-party titles including the Pokémon and Magic: The Gathering trading card games. Born in 1995 near Paris, it lists in Stockholm by accident of history: Embracer bought it in late 2021 for close to €3 billion, froze its M&A and diverted its cash, then spun it off in early 2025. David calls it the toll road of a growing tabletop industry.

David sees the moat in distribution. Ranked #1 in France and the UK, #2 in Germany and #3 in the US, Asmodee owns the route to market that publishers like Hasbro and Mattel rent: 27 countries, ~62% of staff in distribution, 4,000+ active references and near next-day delivery to hobby stores. A rival would need about a decade to replicate it. Sales split roughly evenly across hobby, mass and online, and the top 10 customers are under 25%.

The €14 billion market roughly doubled over a decade and did not contract in 2022. A €30 game nets Asmodee about €9 a unit, so ~17,000 units cover a ~€150,000 development cost, well under a ~30,000 first print run. Trading card games, now 61% of sales, rose 94% from €526 million in FY22/23 to €1,020 million in FY25/26, fed by four to five booster sets a year, separate communities, a deep secondary market and digital on-ramps.

Distributed TCGs trim gross margin, yet David expects adjusted EBITDA margin to rise from 17.0% toward 18.2% on scale. Capex of 2-3% of sales and leverage near 1.3x leave €170-200 million of annual free cash flow to deploy. M&A, frozen under Embracer, restarted with five deals in FY25/26, buying studios Asmodee already distributes: ATM Gaming cost €180 million at 7.2x EV/EBITDA for a 10-14% post-tax ROIC. Chairman Lars Wingefors holds about 17% of capital and 38% of votes.

At SEK 174, the shares trade near 12x forward EV/EBITDA with a roughly 5% free cash flow yield, beside Hasbro (11x), above Mattel (7.5x) and well below Games Workshop (17x). David’s base case of steady like-for-like growth, a margin above 18% and a 12-13x exit multiple yields SEK 204, or 17% upside; the bull case reaches SEK 298 (+71%). The bear case, SEK 90 (48% downside), reflects a hard TCG rollover or the loss of Pokémon, an estimated 20-25% of sales.

Disclaimer

Migros Ticaret: Türkiye’s Leading Grocer Priced Like a Stalled One

MOI Global Equity Research — Tue, 20 Oct 2026 12:24:25 GMT

Mesut Ellialtıoğlu of Büyükdemir Asset Management presented his thesis on Migros Ticaret (Turkey: MGROS) at European Investing Summit 2026.

Thesis summary:

Migros Ticaret is Türkiye’s leading organized food retailer, founded in 1964 with Switzerland’s Migros, listed since 1991 and controlled by Anadolu Group. Mesut sees it as one of the most direct ways to own the country’s growing middle class: 86.1 million people, government debt of 23.8% of GDP, household debt near 10%, and GDP per capita he expects to rise from about $18,000 to $25,000-30,000. MSCI Turkey trades at 6.7x forward earnings, against 11.5x for MSCI EM.

Excluding IAS 29, sales grew from $4.1 billion in 2021 to $9.5 billion in 2025, a 24% dollar CAGR, with $868 million of EBITDA. Migros’s share of modern FMCG rose from 14.3% to 16.8% over 2022-25, and it is the only Turkish food retailer with positive like-for-like traffic three years running. Its 3,830 stores span proximity, supermarket, 5M hypermarket and Macrocenter premium formats. It carries no bank debt and a Fitch AA+(tur) rating.

Mesut sees three growth engines. The network added 1,265 stores since 2021, with 180-200 openings targeted for 2026 and 462 districts still to enter. Online reached 23.1% of sales in 1H26, from 16.7% in 1H23, against about 8.5% at global peers, because stores double as hubs; hybrid stores show 35% larger baskets and 200 bps higher gross margin. In the ecosystem, management targets MoneyPay adding 0.30-0.35 points to net margin and Mimeda retail media about 0.5 points to EBITDA margin by 2030.

Migros is exiting a heavy investment period: management guides capex from 3.3% of sales to about 2.5%, EBITDA margin up 100 bps by 2030, and 5-7% real revenue growth in 2026, then high single digits. ROIC was 15% in 2025, policy pays out 50% of distributable profit, and any repurchased shares would be cancelled. Mesut backs Anadolu Group and CEO Özgür Tort, at Migros for over 17 years. The roughly $700 million of cash is supplier float, not excess.

On September 11, Migros traded at $11.4 (TL 547.5), a $2.1 billion market value, 0.24x EV/sales and about 4x EV/EBITDA versus a sector near 9x (about 6x counting leases and supplier credit as debt); the 16x reported P/E reflects IAS 29 charges. Value sits ~30% below 2024 while dollar sales are ~20% higher. Mesut’s target is $17.0 (TL 820), ~50% upside. Risks: dollar net profit fell from $250 million (2023) to $144 million (2025), the lira, a weak consumer and hard discounters.

Disclaimer

Colonial SFL: Prime CBD Offices at Half of Asset Value

MOI Global Equity Research — Tue, 20 Oct 2026 12:23:08 GMT

Alirio Sendrea of Invexcel presented his thesis on Colonial SFL (Spain: COL) at European Investing Summit 2026.

Thesis summary:

Colonial SFL, long known in Spain as Inmobiliaria Colonial, is a €3.1 billion office REIT with a €12 billion portfolio, 96% of it in city centers: 63% Paris, 23% Madrid, 12% Barcelona. CriteriaCaixa, Qatar Investment Authority, Carlos Fernández González, the Puig family and Corporación Financiera Alba hold about 60% of the equity. Alirio sees rising rates, work-from-home and AI fears behind a bloodbath in European REITs that leaves Colonial at a 49% discount to EPRA NTA.

The moat is scarcity. In Paris, about €260 million of rents at 96% occupancy, Colonial owns five of the nine trophy office assets, and the city has flagged 1.2 million square meters of offices for residential conversion. Madrid (c.€110 million, 94%) and Barcelona (c.€50 million, prime CBD near 100%) see almost no new prime supply. Rental growth has beaten indexation by 350bp on average since 2017, 2022 excepted; AI firms took 30% of Colonial’s Paris take-up over 12 months.

Alirio sees visible, capital-light growth. Ramp-up assets Madnum and Haussmann plus four projects needing just under €200 million of capex, including a hospital fully pre-let to Sanitas and Mapfre, target 6-8% yields on cost and should add €72 million of rent by 2028 and €92 million by 2030, against €400 million in 2025. New fronts include a 51% Berlin JV with Generali at a 4.8% gross initial yield and Deep Labs, a pharma R&D platform targeting over €2.4 billion.

History taught Alirio that leverage is the main risk: in 2008 debt neared €9 billion at over 70% LTV and the shares fell 95%. Management, averaging 20+ years’ tenure, has since cut LTV to 37% and lifted recurring EPS from 11.6 to 33.6 cents (2015-2025). Net debt is 13.6x EBITDA, seen falling to 10-12x, with all debt fixed or hedged at 1.9%. A €700 million disposal program at ~4% yields, 60% secured, funds reinvestment at 6%+ yields on cost.

At €5.04, Colonial trades near half of NAV. Alirio lifts appraisal yields to about 6%, versus a market-implied 7% and 4-5% on private prime deals, for an NTA-based target of €7.6 per share. FFO per share rising from 33.6 cents (2025) to 42 cents (2030), at 17x, gives €7.2. He sees 47% upside, a 32% margin of safety and an 8% five-year IRR plus a 6.3% dividend yield. Risks include higher rates, REIT-regime politics, new Madrid supply after 2035, AI and leverage.

Disclaimer

Mohnish Pabrai: The Dhandho Investor

MOI Global Equity Research — Tue, 20 Oct 2026 09:15:41 GMT

It’s a pleasure to share with you an audio program on Mohnish Pabrai, managing partner of Pabrai Investment Funds and chairman of Dhandho Holdings. Each program in our Great Investors podcast series is an hour-long narrated profile of one investor, drawn from MOI Global’s archive of interviews and conference sessions and from the investor’s published work. We make these programs so that members can learn how a great investor thinks and works, through the decisions he made and what he said about them at the time. Your feedback on what was useful, and on which investors to cover next, shapes what we produce. We start with who he is:

Mohnish Pabrai grew up in a suburb of Mumbai. His father started, grew, sold or shut down well over twenty ventures in forty-two years. He came to the United States around 1983 and took a degree in computer engineering. In 1990 he started TransTech, an information technology services firm, with his retirement savings and credit cards. On July 1, 1999, he started Pabrai Funds with eight friends as its first partners, on a legal structure copied from one book chapter about the Buffett Partnership. Dakshana, the foundation he co-founded in 2005, coaches its scholars for the entrance exam of the Indian Institutes of Technology.

He calls himself a shameless cloner. He watches what Buffett, David Einhorn and Ted Weschler do and tries to reverse-engineer what they saw. He noticed that Berkshire Hathaway owned General Motors and forgot it in about five seconds, because he hated the auto business. Then, flipping through The Manual of Ideas, he saw that Einhorn owned it too, drilled into the company to learn why, and bought GM and then Fiat. At his April 2026 annual meeting a partner said he looked more like a trailblazer. “If you go through my portfolio, it is a trailblazing portfolio, but I am sorry to disappoint you, it is all a cloned portfolio.”

Dhandho, as he applies it to investing, starts with downside protection. He credits the phrase heads I win, tails I don’t lose much to his friend Amar Bhidé. His case is Ipsco, a steel tubing maker whose cash and two years of promised cash flow came to nearly the whole share price. The checklist dates from the fourth quarter of 2008, built the way aviation studies crashes, from other investors’ mistakes and his own. By January 2014 it had about 97 questions, and its first section, on leverage, held the most failures. The big bets are few because the anomalies are few; that January he said it was approaching nineteen months since his last new idea.

The program opens at the Best Ideas conference in January 2014, with his checklist and the three red flags it raises on carmakers. It goes back to his father, who paid an astrologer for a bright picture of the future. It has the silver bubble of about 1980 that paid for his American education. It covers the June 2008 lunch with Warren Buffett, won at auction to say thank you, with Guy Spier at the table. It tells how Dakshana copied Anand Kumar’s Super 30. It ends with the 2020 turn toward compounders, the coal thesis, and the partner who asked whether the cloner label still fit.

Pabrai has spoken at MOI Global’s Best Ideas conference in 2014, 2021, 2023 and 2025, and 2018. MOI Global, which also hosts the Latticework summit, turned its Meet the Author Forum to The Dhandho Investor in 2019. At Best Ideas 2014 he opened with aviation and its checklists. In 2021 he said he was looking for compounding machines. In January 2025 his Best Ideas keynote made the coal case through CONSOL Energy. For more, see Mohnish Pabrai on His Coal Thesis and the Mental Model Behind It, which carries that keynote for Latticework members.

The complete program runs sixty-two minutes.

Get the next program the day it comes out. Great Investors is on Apple, Spotify, and YouTube (or add the podcast feed to any app).

Transcript

The transcript is available for download to members only.

The Monday Morning Briefing: Meta, Tesla, Netflix, P&G on Deck

MOI Global Equity Research — Mon, 19 Oct 2026 08:29:45 GMT

The Latticework Monday Morning Briefing is our weekly “Guide to the Markets” for long term-oriented investors. It is sent on a separate mailing list (complimentary to members). If you do not wish to receive it, opt out here.

Last few seats available at Latticework 2026 (November 10-11) — don’t miss thought-provoking fireside chats, panel discussions, idea pitches, and a group dinner. Agenda | Secure your seat now.

Highlights of the Latticework Monday Morning Briefing:

Ideas from our member newsletter

We highlight a few stock write-ups from the latest Weekly Inspiration:

Lennar (NYSE: LEN) builds a house in 116 days, about half the time it took in early 2023, at ~$80 a square foot, 14% below its Q4 FY23 cost. Our Business Intelligence coverage initiation rates the Class A shares Long-Term Overweight against the S&P 500 over three to five years. The operating gains have not reached the margin: gross margin on home sales fell from 27.5% in FY22 to 15.8% in Q3 FY26 (Jun-Aug 2026), below the ~17% at which Lennar earns its cost of capital, and Stuart Miller put the whole gap on land: “It’s not labor. It’s not materials. It’s not overhead. It is land.” Incentives fell for a third quarter, to 12.0% of price, but the cost ratio rose from 0.735 to 0.741 as option fees from the land banks that supply 86% of deliveries run through the cost of homes sold. Our base case recovers the margin through falling incentives alone, with no credit for cheaper building, and values a share at $112.93 to $148.86 at a fixed 10% required return, median $130.67, against the $74.92 close of October 13; we set no price target. Berkshire Hathaway held ~12.2% of the shares by its October 5 Form 4 and Greenhaven 5.08% of the Class A. Five kill criteria include a margin below 15.5% for four quarters while deliveries fall, and buybacks funded with debt. The Q4 guide implies the first annual fall in deliveries since 2011; D.R. Horton reports October 29, Lennar in mid-December.

Flowers Foods (NYSE: FLO), the second-largest US packaged bakery producer and owner of Nature’s Own, Dave’s Killer Bread and Wonder, trades at ~7.5x earnings and 6.4x EBITDA on the guidance it cut in August, after an 80% fall from its 2022 high. The reasons for the fall are plain. Branded share of the $32 billion fresh-bakery category slipped from 77% in FY21 to under 74% in FY25 as a $2.66 store-brand loaf undercut Nature’s Own at $3.76 and Dave’s Killer Bread at $6.20; the $795 million Simple Mills purchase at 3.3x revenue pushed leverage to 3.3x, now 3.6x; and the dividend was halved in May. Mid-point 2026 guidance has sales down 3%, EBITDA down 13% and EPS down 27%. Value Don’t Lie, which holds no position, still sees three attractions: the shares are among the cheapest in packaged food, the dividend cut is behind the company, and Flowers is reportedly shopping Tastykake, which Reuters valued at ~$350 million on $400 million of revenue. On 214 million shares the market value is $1.28 billion against $1.64 billion of net debt. An upside case with the Tastykake sale and six quarters of excess cash flow gives $8.50 a share, 42% up; a downside with 2027 EBITDA at $430 million and a 5.5x multiple gives $3.80. The stock goes on a watch list: a Tastykake sale, a further dividend cut or easing volume declines by the Q4 report in February 2027 would change the view, and without them the write-up passes.

Weekly Inspiration

MOI Global Equity Research — Sat, 17 Oct 2026 12:41:48 GMT

In this digest, we curate the most insightful free online content. This substack aspires to be a platform for your growth, whether you’re on the hunt for ideas, looking to learn from great investors, or building a great investment firm.

Last chance to be a part of Latticework 2026 (November 10-11) — fireside chats, panel discussions, idea pitches, and a group dinner. We’re almost fully booked. Agenda | Secure your seat now.

An executive summary of this week’s selections:

11 Articles We Are Reading This Week

Golden age - Daniel Gladiš
Misunderstood - Amit Wadhwaney
Gangster states - Reimar Scholz
OpenAI’s spy problem - James Ball
Models as insider risks - Satya Nadella
Agents in the economy - Patrick Collison
AI and the lump of labor - Adam Mastroianni
Adam Grant on friendship - David Epstein
AI shopping agents denied - Moses Sternstein
Higher hurdles, AI and moats - Todd Wenning
Moneyball, herds and compounders - John Huber

Industry Primer: Fertilizers

MOI Global Equity Research — Fri, 16 Oct 2026 09:01:31 GMT

Recent primers: Aerospace, Exchanges, Homebuilding, Insurance, Regional Banks.

We are delighted to share with you the sixth in-depth research report in our Industry Primers series, this one on fertilizers. The series exists to help fundamental, long-term investors expand and deepen their circle of competence, one industry at a time, and your feedback on what was useful and on which industries to cover next shapes what we produce. The report is complemented by two podcast episodes, the first telling the story of the industry and the second digging deeper into the fundamentals from an investor’s standpoint. Below, you will find two PDF files for download: the research report (members only) and the accompanying slide deck (free to access). We start with a quick anecdote:

On August 18, 2010 (Australian time) BHP Group (ASX, LSE, NYSE: BHP) offered $130 a share in cash for PotashCorp, the Saskatchewan potash miner, about $40bn on a fully diluted basis. PotashCorp’s board rejected the offer, and on November 3, 2010 Canada’s industry minister found that the purchase was not likely to be of net benefit to Canada under the Investment Canada Act. BHP withdrew in mid-November.

PotashCorp kept building potash capacity sized to the prices of 2008, and it spent $9.8bn of capital in the five years 2009 to 2013. The new tonnes arrived as prices fell in 2013 and reached their low in 2016. On January 1, 2018 PotashCorp merged with Agrium into Nutrien (NYSE, TSX: NTR), and each PotashCorp share became 0.4 Nutrien share. At the close of September 25, 2026 those Nutrien shares were worth 67 cents for each dollar BHP had offered, before dividends.

In the same low point of the cycle, CF Industries Holdings (NYSE: CF), a nitrogen producer that owns no mine, bought its rival Terra Industries for $4.6bn in cash and shares, completing the purchase in April 2010. In February 2016 it sold about 11% of its nitrogen business to the farm cooperative CHS for $2.8bn, at an implied value twice what the market put on all of CF, and it spent the cash its plants earned on repurchasing its own shares. Its share count in August 2026 was 42% of the count it had after the Terra purchase. From its first trading day in August 2005 to September 25, 2026, CF returned 52 times its first-day price with dividends reinvested, against 9.3 times for the S&P 500 total return.

The report explains the gap through the way each nutrient is made and priced. Fertilizers are three commodity businesses whose costs are set by geology and by the price of natural gas. Nitrogen is made in chemical plants from gas, phosphate is rock dissolved in sulfuric acid and combined with ammonia, and potash is a salt dug from deep mines. A tonne of urea from Louisiana and a tonne from Qatar fetch the same price at the same port, so a producer earns the difference between that price and its own cost. Its place on its nutrient’s cost curve, the ranking of every producer from the cheapest to the most expensive, therefore decides its margin at every price.

At the World Bank’s August 2026 gas prices a Louisiana plant made a tonne of ammonia for about $161 in all and a Dutch plant for about $757. The price settles near the cost of the most expensive plants that must still run to meet demand, usually European plants on imported gas, so the Louisiana plant keeps most of the gap for as long as the world needs the European plants’ output. CF’s gross margin was 10.5% in 2017, when European gas cost $2.76 per million British thermal units (MMBtu) more than American gas over the year. In 2022, when the difference was $33.97, it was 52.4%.

Potash producers earn their margin from the ore body. In 2025 Nutrien sold potash for a net $252 a tonne at the mine and kept about $161 after its cash cost and Saskatchewan’s taxes, from mines paid for decades ago, while BHP’s new Jansen mine will cost about $2,024 of capital for each tonne of annual capacity. Phosphate’s margin depends on the sulfur and ammonia a producer buys. The Mosaic Company (NYSE: MOS) settled its third-quarter 2026 sulfur at $705 a long ton, 35% above the second quarter’s average, which adds about $72 to the cost of a tonne of diammonium phosphate (DAP). At the close of Friday, September 25, 2026, CF was worth $17.4bn, 2.4 times Mosaic’s $7.3bn.

The record shows how uneven the owners’ results have been. From their listings the four long-listed majors returned between 3.6% a year (Mosaic) and 20.6% (CF) with dividends reinvested, against about 11% for the S&P 500 total return. Without CF the other three averaged about half the market’s return. Over the twenty years from September 29, 2006, five of seventeen listed producers beat the index.

The report finds that capital allocation through the cycle, what managers built, bought, sold and bought back and at what point in the cycle, decided how much capacity stood behind each share more than the quality of any single asset did, while the date at which a record began decided whether it beat the index. Under Stephen Wilson, from CF’s listing to the end of 2013, its shareholders earned 15.1 times their money against 1.8 times for the index. His successor, Tony Will, cut CF’s share count by 45% to the end of 2025 and raised its ammonia capacity per share about 2.6 times. He took over after the stock had risen about fifteen-fold in eight years, and his shareholders earned 7.5% a year against 13.6% for the index.

The report sets the records of the owner-operators, the chief executives and controlling holders who ran these companies as owners, on one basis, and it finds that the variables behind the best of them were visible in advance: the entry price relative to the cycle, the cost position on the nutrient’s own curve, restraint at the peak and the debt carried into the low point. This primer is a manual for reading them. This is one of a weekly series of primers whose purpose is to help readers expand or deepen a circle of competence, one industry at a time.

The companion deck. Fertilizers: a self-contained summary of the report in slide form.

Companion Deck - Fertilizers

2.7MB ∙ PDF file

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As of October 2026

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What’s inside

The primer has two parts, both attached to this post: the report and a companion deck that can be read on its own. The report follows the industry from its history and economics to its companies, its accounts, its valuation and its open questions, and every figure in it is dated and sourced in the notes. The highlights, part by part:

Part I, Orientation. Why the industry repays study, how its three nutrients are made and priced, and where they are mined, made and used. The 23 featured companies that trade on exchanges open to most investors were worth $247.8bn at the September 25, 2026 close. Four state-controlled Gulf producers made up $100.9bn of it, 41%, against $83.0bn for the nine Western fertilizer producers.

The four are the Saudi Arabian Mining Company (Tadawul: 1211), known as Ma’aden, SABIC Agri-Nutrients (Tadawul: 2020), Industries Qatar (QSE: IQCD) and Fertiglobe (ADX: FERTIGLB). Ma’aden alone, at $63.2bn, is about a quarter of the total, and its business includes aluminum and gold as well as phosphate. The largest company that makes only fertilizer is Nutrien, at $34.5bn.

Chapter 2 works the cost of a tonne of ammonia in Louisiana and the Netherlands from public numbers and fixes the units, because prices are quoted in tonnes of product and world statistics in tonnes of nutrient. At the World Bank’s August 2026 price of $390 a tonne of urea, a tonne of nitrogen bought as urea cost about $848. Chapter 3 maps the deposits, the plants and the buyers. Canada, Russia and Belarus mined 63% of the world’s potash in 2025, against 62.6% in 2000. Morocco and Western Sahara hold 68% of the world’s phosphate rock reserves, while China mined 44% of the rock. China, India and Brazil used half the world’s fertilizer in 2024, and Brazil has passed the United States.

From Chapter 2: the input, the process and the World Bank price of August 2026 for nitrogen, phosphate and potash, with the top of each cost curve, drawn as a stylization rather than a measured curve. The gas alone in a tonne of urea made in a European plant cost about $512 against a urea price of $390. Nutrien’s potash cash cost of $58 a tonne compares with $2,024 of capital a tonne for a new mine.

Part II, Evolution. The history in three eras, chosen by where the nutrient came from. Until 1913 every nutrient came from a natural deposit that a state owned or taxed, from Peru’s guano and Chile’s nitrate to Germany’s potash; Morocco’s phosphate, a state monopoly from 1920, followed the same pattern. The first synthetic ammonia plant, at Oppau in Germany, began production on September 9, 1913. On the count of a study in the Bulletin of Latin American Research, Chilean nitrate’s share of world nitrogen consumption fell from 54.7% in 1913 to 32.2% a decade later. Nitrogen became a manufacturing business whose price follows the cost of making it, while phosphate and potash stayed with the owners of the deposits.

From 1945 to 2003 states and cooperatives built the mass industry. Saskatchewan’s floor price and production quotas of 1969 raised potash revenue per tonne of potassium oxide (K2O) by about 73% on 3% less volume. Canpotex, the export agency incorporated in 1970 and owned today by Nutrien and Mosaic, is the institution that survived. The American gas shock of 2000 to 2003 bankrupted Farmland Industries and Mississippi Chemical, and Koch offered about $104m for four of Farmland’s plants, about $58 per annual tonne of capacity on the price reported at the offer.

The price spike of 2008 was short, and the capacity it prompted kept arriving for years. CF decided its one expansion in 2012 with urea at $399 a tonne on the World Bank’s annual series and started the plants in 2016, when urea averaged $194. On July 30, 2013 Uralkali, whose London depositary receipts traded until December 22, 2015, stopped exporting through the Belarusian Potash Company, the agency it shared with Belaruskali. On the World Bank’s series, which showed the break six months late, potash averaged $344.8 a tonne over the twelve months after the exit against $429.4 over the twelve before, a fifth less.

The Strait of Hormuz has been effectively closed to commercial traffic since March 2, 2026. Urea rose 81.5% from February to April 2026, to $856.9 a tonne. By August it had fallen 54% while the strait stayed shut, and DAP had risen 26.7% since February, to $793.5, and was still rising. Chapter 8 tells four cases as the decisions their owners took: PotashCorp’s building and the BHP bid, the break of the eastern potash cartel, CF from its listing to 2026, and Sirius Minerals, taken over by Anglo American (LSE: AAL) in March 2020 for about £405m after its bond financing failed, on a mine into which $1.1bn had been invested.

From Chapter 6: the World Bank’s monthly prices of urea, DAP, potassium chloride and phosphate rock in nominal dollars a tonne from 1960 to August 2026, with urea’s annual price in 2010 dollars. Of the four spikes, in 1974, 2008, 2022 and 2026, the first is still the record in real terms for urea and DAP, at $759 and $884 a tonne in 2010 dollars.

Part III, Structure & Economics. Where the profit goes from the gas well to the farm, how the cycle turns, what each nutrient earns in dollars a tonne and which advantages have lasted. The producer’s share of the profit rises and falls with the scarcity of its input, while the retailer’s share holds. From 2018 to 2025 the adjusted EBITDA of Nutrien’s retail segment varied with a coefficient of variation of 0.21, against 0.56 for its potash segment. In Illinois the distributors between the export price or the plant gate and the dealer took 29 to 37% of the farmer’s price for urea and ammonia in both 2022 and 2025.

The farmer buys once a season and with the grain price in mind. A tonne of urea cost 4.0 tonnes of maize in April 2026, the highest monthly reading since 2000, and 1.74 tonnes by August. Nitrogen is applied every year while phosphate and potash can be skipped for a season, which is why the demand cuts of 2026 fell on phosphate.

Chapter 11 works nitrogen from the gas price. A tonne of ammonia takes 31 to 36 million Btu of gas, so each dollar of difference between European and American gas is worth about $36 a tonne at CF’s gas use. In August 2026 the World Bank’s European gas price exceeded the US price by $18.34 per MMBtu, the widest month since December 2022, which is about $667 a tonne of ammonia. The world’s demand for European output decides how much of that gap the price passes on. CF earned gross margins of 46 to 51% in 2011 to 2013. On similar gaps in 2023 to 2025 it earned 34.6 to 38.5%, because after the American plants built in 2016 and 2017 the world needed Europe’s ammonia less.

New ammonia plants cost about $2,600 to $2,900 a tonne of annual capacity. CF’s management gave its assumptions for an average year of the cycle on its second-quarter 2026 call as $3.50 gas and a 10% to 12% return. On them a new Louisiana plant needs at least about $450 to $505 a tonne of ammonia before its capital is repaid, the authors’ estimate. CF realized about $521 a tonne in 2025 and $376 in 2016.

Chapter 12 works potash and phosphate. At Nutrien’s 2025 margin of about $161 a tonne, a tonne of Jansen capacity would take about 12.6 years to repay its capital. On August 2026 prices a phosphate producer that buys its rock, sulfur and ammonia lost money on DAP at $793.5, while one that mines its own rock kept about $173 a tonne more. Chapter 13 finds that most producers have no lasting advantage beyond their place on a cost curve, with the ore body as the exception: in the 2016 low PotashCorp and Mosaic stayed profitable while CF, which owns no mine, lost money.

From Chapter 11: the World Bank’s European gas price less its US price by year, in dollars per MMBtu (bars), against CF’s gross margin (line), 2010 to 2026. CF’s margin was 10.5% in 2017 on a gap of $2.76. In 2022 it was 52.4% on a gap of $33.97, and it was higher in 2011 to 2013 than in 2023 to 2025 on similar gaps.

Part IV, The Players. The featured producers on one page at one date, two chapters on the builders, the allocators and the state’s managers, and the unlisted and state forces. The producers sort by their nutrient’s cost curve and their place on it. CF earned operating income plus depreciation of 45% of its FY2025 sales on American gas, while Grupa Azoty (WSE: ATT), Poland’s state-controlled producer on European gas, earned a trailing EBITDA margin of 6.9% and carries net debt nearly six times its market value. Yara International (OSE: YAR) agreed on July 2, 2026 to acquire the Gulf Coast Ammonia plant at Texas City, still in commissioning, for about $1,000 a tonne of capacity.

Chapters 15 and 16 put every leader’s record on one basis, total shareholder return over the tenure against the S&P 500 total return over the same window. The three tenures that spanned the boom of 2003 to 2008 beat the index. Wilson’s CF returned 15.1 times against 1.8 for the index. Bill Doyle’s PotashCorp, measured from December 2000, returned 10.2 times against 1.9, and Jim Prokopanko’s Mosaic beat the index by a narrow margin.

Every chief executive’s window in the set that began in 2014 or later and lasted more than a year trailed the index. CF’s letter for 2014 set out the rule its managers followed, to spend cash on capacity and on buybacks so that the cash flow each share can generate rises as far as possible, and CF bought back $8,768m of its stock from 2014 to 2025. Nassef Sawiris sold nearly all the plants of OCI N.V. (Euronext Amsterdam: OCI) in 2024 and 2025 and paid out about $7bn, and a holder since the 2013 listing still has 0.83 times the money in euros.

Chapter 17 covers the state as producer, buyer and regulator. Eleven of the 23 featured companies have a state or a state company as controlling or largest holder, and they carry 58% of the featured value. India budgets ₹1.71 lakh crore net for fertilizer subsidies in 2026-27, about $17.8bn. Producers inside the Strait of Hormuz shipped 26.9% of traded urea in 2024 on UN Comtrade’s data, a share other sources put at up to a third.

The chapter also sets out the antitrust matter, two investigations and one consolidated set of private suits, all allegations the companies deny. Bloomberg reported the Justice Department’s investigation on March 4, 2026, and the Federal Trade Commission announced its own on May 28. On June 9, 2026 the Judicial Panel on Multidistrict Litigation centralized five farmer suits as MDL No. 3187 before Judge Eric F. Melgren in the District of Kansas, and 29 related suits have followed them there. The defendants include CF, Nutrien, Mosaic, Koch and Yara entities and Canpotex. No charge has been filed, and no court has ruled on the merits.

From Chapter 15: total shareholder return a year in US dollars over each chief executive’s tenure (bars) against the S&P 500 total return over the same window (points), with the World Bank urea or potassium chloride price in the month each record starts. Stephen Wilson’s CF returned 38.2% a year from 2005 to 2013, and all ten records in the chart that start in 2013 or later trailed the index.

Part V, Speaking the Language. The reference section: the units, terms and measures with their competing definitions, the accounting for mines, waste stacks, hedges and minority partners, and a tour of the filings and free data in the order a specialist reads them. Two analysts can quote the cost of the same potash mine from the same release and differ by 64%, because Jansen costs $2,024 per annual tonne of potassium chloride and $3,318 per tonne of K2O. Nutrien’s potash cash cost is $58, $65 or $91 a tonne, depending on what the definition leaves out.

Chapter 19 names three numbers the income statement hides: the reserve behind the depletion charge, the cost of closing mines and the stacks of phosphogypsum, the waste left from making phosphoric acid, and the claims of minority partners between EBITDA and the shareholder. Mosaic’s asset retirement obligations, its discounted cost of closing mines and stacks, rose from 8.8% of its equity in 2015 to 21.5% in 2025, mostly through revisions of estimate. Adding them, $2.6bn at the end of 2025, to Mosaic’s enterprise value lifts its multiple of EBITDA in an average year of the cycle, its mid-cycle multiple, from 5.7 to 6.9 times. International accounting rules let Nutrien reverse $780m of phosphate impairments in the 2022 spike, a gain a company reporting under US rules could not have booked.

Chapter 20 reads the filings. CF’s second-quarter 2026 gas cost of $3.37 per MMBtu, set against the World Bank’s European average of $15.58, put it about $440 a tonne of ammonia ahead at its own gas use. The bond prospectus of OCP, Morocco’s state producer, shows its net debt up 45% in 2024 to its own ceiling of 2.5 times EBITDA.

Part VI, Analysis & Valuation. A producer is analyzed from its cost position upward and from its owner downward. In 2025 a Gulf Coast ammonia plant on CF’s gas use burned about $128 of gas a tonne, against about $413 for Yara’s European plants. Mid-cycle earnings depend on the years averaged: Yara’s short window overstated its normal EBITDA by 19%, and CF’s management uses a baseline 18% above CF’s eleven-year average.

At the September 25, 2026 close the nine Western fertilizer producers traded at a median of 6.3 times mid-cycle EBITDA, from K+S (XETRA: SDF) at 3.9 times to LSB Industries (NYSE: LXU) at 11.0. CF stood at 8.6 times its eleven-year average and 7.3 times management’s baseline of about $2.9bn. The difference between the two is about $3.2bn of equity value. A multiple of a single year’s earnings misleads at the top and the bottom of the cycle. At the end of March 2022 the majors traded at about 6 to 7 times the 2022 earnings they went on to report, and at the end of 2016 PotashCorp traded at 48 times its 2016 earnings.

Against the cost of new capacity, Nutrien’s potash is valued at about $755 per tonne of capacity, 37% of Jansen’s $2,024. CF’s enterprise value of $2,235 per tonne of ammonia capacity is 78 to 85% of the cost of Blue Point, its new Louisiana plant. The Gulf producers trade above their own cost of building new plants.

Chapter 23 measures what a buyer of fertilizer stocks chosen without selection has earned. The median of the seventeen ranked producers, Qinghai Salt Lake Industry (SZSE: 000792), returned 4.94 times over twenty years, a little over half the index. From 2019 to 2025 a falling multiple cost every major 5.5 to 12.6 points of return a year. The entry price relative to the cycle was the strongest predictor of the return, followed by the cost position, restraint at the peak and leverage, while retail integration, size and a nutrient’s scarcity predicted nothing. The report treats this evidence as suggestive, because it rests on seventeen companies over one cycle.

From Chapter 22: enterprise value per annual tonne of capacity at the September 25, 2026 close against the cost of building or buying a tonne, by nutrient. Nutrien’s potash is valued at $755 a tonne against $2,024 for BHP’s Jansen Stage 1. CF’s ammonia is valued at $2,235 a tonne against $2,643 to $2,857 for Blue Point on CF’s two dated estimates.

Part VII, The AI Inflection. The part counts only what the filings measure. Nutrien mined 53% of its potash ore with automation in the first half of 2026, against 22% in 2023. The value of that automation lies in the capital it saves, since Nutrien prices the next tonnes from its existing mines at $200 to $300 of capital, against about $2,024 at Jansen, and no filing has yet turned it into dollars a tonne.

The farm software platforms set digital targets and missed them. Nutrien’s digital share reached 18% of its North American retail sales in 2022 against a target of more than 50%. Yara counts 25 million digitized hectares against a goal of 150 million. On the farm, precision application has cut the nitrogen used per bushel of US corn by about 1% a year while the rate per acre rose.

For the producers the larger question is the price of American gas, for which data centers now compete. A $2 rise in the Henry Hub price would take about a quarter of 2025’s gap between European and American gas and almost all of 2019’s, although the September 2026 outlook of the Energy Information Administration has Henry Hub falling to $3.28 in 2027 as production outgrows exports of liquefied natural gas and power demand.

Part VIII, Risks & Debates. Fertilizer producers fail when a high cost position or a single asset meets a price collapse with debt. The American cooperatives failed on gas in 2002 and 2003, Sirius Minerals on a bond in 2019, and in 2026 the Gulf plants whose only route was a closed strait. No producer listed in North America or Europe in 2005 has failed since. The shareholder’s usual loss is a dividend cut in the low years after borrowing in the good ones, and Mosaic cut its quarterly dividend by 91% in seven months in 2017. Mosaic’s undiscounted cost of closing its phosphogypsum stacks, about $3.0bn at the end of 2024, equals about 41% of its market value.

Chapter 27 works the open debates of 2026, facts first and proponents named, with the dates to September 2027 that will settle them. On the US Geological Survey’s estimates, world potash capacity grows 17% by 2029, so output must grow about 4% a year to hold 2025’s operating rate. Urea fell 54% from its April peak with the strait still shut, so the debate over the Gulf producers turns on whether buyers will pay more for supply from outside the Gulf. In the antitrust debate, which concerns investigations and allegations the companies deny, the plaintiffs allege that record prices drew no increase in supply, and CF answers that it ran at 97% of its gross ammonia capacity in 2025. A charge or a closing statement from the Justice Department or the FTC, and Judge Melgren’s rulings, will settle it.

The appendices. The investable universe, 69 listed companies with the restricted Moscow listings and the unlisted producers set out beside them; a checklist of 30 questions for the analyst in ten groups, from the producer’s cost curve to the proxy statement, with the place to look and what the record shows for every question; a reading course that opens with the producers’ own letters and calls, followed by books, the government and multilateral data series, the trade bodies’ statistics and interviews; and the numbered notes that source the report.

The companion deck. The report in the format of the Monday Morning Briefing, designed to be read without the report: the propositions of the Executive Summary with the number that carries each, the report’s exhibits re-rendered for the slide format under titles that state what each shows, the tables that carry the argument, and slides for material that has no exhibit in the report, followed by the universe and the checklist.

What the primer is for. A reader who works through it should be able to explain how fertilizers make money, from the gap between European and American gas and the margin of a mine whose capital was repaid decades ago to the retailer’s margin on each tonne; use the industry’s vocabulary, from product and nutrient tonnes, short, long and metric tons and the gas used per tonne of ammonia to the controllable cash cost and the obligation to close a stack; read the filings without being misled by a cost quoted per tonne of product where the argument needs the nutrient, a mid-cycle figure without its years, or an EBITDA that includes a minority partner’s share; appraise a producer the way specialists do, from its place on its nutrient’s cost curve upward and against mid-cycle earnings and the cost of a new tonne; and recognize the managers and business models that have compounded value over decades, and the ones that built capacity at the top of the cycle.

How to use this primer

The report does not need to be read in order. Suggested paths:

a generalist with limited time, Parts I and VI plus the checklist in Appendix B;
a reader interested in the history, Part II;
an accountant, Part V with Chapter 12;
an analyst working on a specific company, Chapter 14, then Parts III, V, and VI in order;
a commodity specialist, Chapters 10 to 12 and the debates of Chapter 27;
a risk officer, Part VIII with Chapters 8 and 17;
a technologist, Part VII;
a reader who came for the owner-operators, Chapters 15 and 16, with Chapter 23 for what their records are worth against the index.

Every chapter ends with a “What to remember” box, and the boxes read in sequence summarize the report. The checklist follows the order of the analysis in Chapter 21, from the producer’s place on its nutrient’s cost curve to the owner and the proxy statement, and its first questions test the cost position because in 2025 a Gulf Coast ammonia plant on CF’s gas use burned about $128 of gas a tonne, against about $413 for Yara’s European plants.

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Please reply to this email or leave a comment with what was useful, what was missing, any errors you find, and the industries you would like covered next. Member requests will inform the order of coverage.

The complete report and the deep-dive audio program are part of the Latticework Premium membership, together with the full weekly slide decks and the archive of past primers. For investment firms, the Institutional tier adds membership in MOI Global (subject to approval) and exclusive firm-building content and best practices. Both are on the subscribe page.

This content is published by MOI Global for educational purposes only. It is not investment advice, an offer, or a solicitation, and no security mentioned herein is recommended for purchase or sale. The publisher and contributors may hold positions in securities discussed. Figures are believed accurate as of the dates stated but are not warranted; readers should verify all data against primary sources before relying on it. Nothing herein constitutes legal, tax, or accounting advice.

Industry Primers Podcast: Fertilizers, Part Two: The Deep Dive

MOI Global Equity Research — Fri, 16 Oct 2026 08:48:34 GMT

This is Part Two of the Industry Primers audio program on fertilizers, published by Latticework from MOI Global. It is the deep dive, made for professional investors and for anyone who analyzes these companies for a living. It assumes the ordinary vocabulary of investing and explains only what is specific to this industry, and it stands on its own for a…

Industry Primers Podcast: Fertilizers, Part One: The Story

MOI Global Equity Research — Fri, 16 Oct 2026 08:47:33 GMT

This is Part One of the Industry Primers audio program on fertilizers, published by Latticework from MOI Global. It is the first of two audio programs that accompany the written primer on the fertilizer industry, and it is the story of the industry, told for a general audience. The account is built from documented scenes, with the people named, the dates given, and the participants quoted in their own words. It assumes no background in chemistry, farming or finance and explains its terms, from fixed nitrogen and superphosphate to a floor price and an export agency, as they arrive. This episode is public.

The program runs from the guano islands of Peru in the 1850s to the Strait of Hormuz in September 2026, and from Chile’s nitrate desert, Norway’s waterfalls and the Rhine to the Saskatchewan prairie, the Urals and a farmyard in Texas. Its people are chemists, among them Justus von Liebig, Fritz Haber and Carl Bosch; the Chinese laborers who dug guano on the Chincha Islands; a Chilean captain who boarded an ironclad; the governors and premiers who set and defended the price of potash; and the farmers who asked in 2026 who sets the price of fertilizer. It follows how states and export agencies, from Saskatchewan’s floor price and quotas of 1970 to the Belarusian Potash Company, set the price of nutrients that the air and the rock hold in abundance.

Part One stands on its own. It tells how the industry took its present shape, from the natural deposits that states owned and fought over to the synthetic ammonia of 1913 and the potash mines of the prairie. The economics of the business, and the companies as investments, are the subject of Part Two and of the written primer. Where the program reaches the investigations and the farmers’ suits of 2026, it reports them as investigations and allegations, which the companies deny.

The program runs in fourteen sections:

The Air Takes Fire. On September 7, 1898 Sir William Crookes tells the British Association at Bristol that the world’s wheat depends on guano and Chilean saltpeter that may run out within decades, and prices nitrate made from the air on Niagara’s power at not more than £5 a ton, against £7 and 10 shillings for Chile’s.
Before the Plough. In 1840 Justus von Liebig prints a recipe for dissolving ground bones in sulfuric acid, John Bennet Lawes patents the process in 1842 and opens the world’s first commercial fertilizer factory at Deptford Creek in 1843, and that autumn wheat is sown on Broadbalk, where a control strip has received no fertilizer since.
Five Tons a Day. In 1853 George Washington Peck watches Chinese indentured laborers on the Chincha Islands dig and wheel 5 tons of guano each a day, and by Alexander Duffield’s count Peru sells 20 million tons at £12 to £13 a ton before it defaults on its foreign debt in 1876.
Without Firing a Gun. On February 14, 1879 Chilean troops occupy Antofagasta in a quarrel over a Bolivian tax of 10 cents a quintal on nitrate, the War of the Pacific gives Chile the nitrate province of Tarapacá in 1883, and John Thomas North, who bought Peru’s nitrate certificates at a reported 80 to 90 percent below face value, becomes the Nitrate King.
A Dinner on Friday the Thirteenth. Seated beside Kristian Birkeland at a dinner in Christiania on February 13, 1903, Sam Eyde finds the electric arc he wants, and Norsk Hydro is founded on December 2, 1905 with 7.5 million kroner of share capital, only 8 percent of it held by Norwegians.
Eighty Hours, Then They Burst. In 1909 Fritz Haber and Robert Le Rossignol make liquid ammonia on a bench apparatus at about 175 atmospheres, Carl Bosch’s first steel tubes burst after 80 hours, and BASF’s plant at Oppau, built for about 30,000 tons of ammonia a year, starts on September 9, 1913.
The Saltpeter Promise. Cut off from Chile by the British blockade, Germany takes Bosch’s pledge of September 1914 to make nitric acid from Oppau’s ammonia, and Leuna ships its first ammonia on April 27, 1917, while the United States spends about $80 million on two Alabama nitrate plants without a working copy of Haber’s synthesis.
Stones into Bread. Fritz Haber, who orchestrated the chlorine attack at Ypres on April 22, 1915, receives the Nobel Prize for the synthesis of ammonia on June 1, 1920, and on April 30, 1933 resigns rather than dismiss the Jewish members of his institute’s staff.
A Grim Enemy. On September 21, 1921 a silo holding about 4,500 tonnes of ammonium sulfate nitrate explodes at Oppau, killing 559 people on the official count, and in 1927 Norsk Hydro gives up its electric arc for a license to the German process, while from 1929 to 1932 the export price of Chile’s nitrate falls 84 percent.
The Governor Calls the Premier. After Canadian potash drives the American price from $22.26 a ton in February 1966 to $11.70 in February 1969, New Mexico’s governor calls Saskatchewan’s premier, and in 1970, under a floor price and quotas of 40 percent of capacity, the province’s producers sell 3 percent less potash and their revenue rises from $69 million to $116 million.
Under Our Wheat Fields. On November 19, 1975 Premier Allan Blakeney tells Saskatchewan’s legislature that the province will borrow to buy its potash mines, and in 2010 a takeover offer of about $40 billion for PotashCorp is refused, leaving a holder who kept the shares with Nutrien stock worth about 67 cents for each dollar offered, before dividends, in late September 2026.
Deadlock. On July 30, 2013 Uralkali leaves the Belarusian Potash Company, the export agency it shared with Belaruskali, and in the year that follows the World Bank’s potash price averages $344.8 a tonne, against $429.4 the year before; on August 26 Belarus detains Uralkali’s chief executive at Minsk airport.
Ninety-Six Percent. In August 2022 European gas averages $70.04 per million British thermal units against $8.79 in the United States, about $2,000 more in the cost of a tonne of ammonia made in Europe, and CF Industries runs its North American plants at about 96 percent of capacity that year while it closes its Ince plant in England.
One Ship. After Iran declares the Strait of Hormuz closed on March 2, 2026, urea averages $856.9 a tonne in April, 81.5 percent above February, and on September 20, 2026 the International Monetary Fund’s count shows one ship passing the strait, against an average of about 85 a day in 2025.

The program runs 1 hour 31 minutes (1:31:54). The written primer and its companion deck are on the Latticework Substack at the Industry Primer on fertilizers. Part Two, the deep dive for professional investors, is a separate episode, available to members of Latticework: Industry Primers Podcast: Fertilizers, Part Two: The Deep Dive.

This audio program is published by MOI Global for educational purposes only. It is not investment advice, an offer, or a solicitation, and no security mentioned herein is recommended for purchase or sale. The publisher and contributors may hold positions in securities discussed. Figures are believed accurate as of the dates stated but are not warranted; listeners should verify all data against primary sources before relying on it. Nothing herein constitutes legal, tax, or accounting advice.

Transcript

The transcript is available for download to members only.

Howard Marks: Investor’s Guide to Taking the Market’s Temperature

MOI Global Equity Research — Wed, 14 Oct 2026 20:15:13 GMT

We are delighted to share with you a Great Investors podcast deep dive, the members-only companion to our free audio program, Howard Marks: Higher-Level Thinking. Each free program in the series is an hour-long narrated profile of one investor. Each deep dive takes one of that investor’s working methods and teaches it to you, in narrated instruction, so that you can run it yourself. This one builds three readings of a market’s temperature in eight modules. It is audio only, with nothing to download, so a member who listens on the go gets the whole program. We start with what you will be able to do:

You will be able to take the market in front of you, gather the evidence that bears on where it stands, and reach a defensible reading without forecasting anything. You will be able to convert that reading into one decision about how much risk to carry, and to know what would have to change for the reading to move. You can run it yourself on any date you name, with nothing more than free public series and a calculator. What follows is the method itself, module by module.

Lennar: The Misstep Is Temporary, the Operating Machine Is Not

MOI Global Equity Research — Wed, 14 Oct 2026 10:24:07 GMT

Lennar has changed how it builds and how it holds land. It builds a house in 116 days, about half the time it took in early 2023, and it owns fewer than one in forty of the 487,961 homesites it counts, a land position nearly as light as that of NVR, Inc. (NYSE: NVR). It paid for both with its gross margin on home sales, which fell from 27.5% in FY2022 to 15.8% in Q3 FY2026 (Jun-Aug 2026), below the line of about 17% at which the business earns its cost of capital. On the call of September 17, 2026, Stuart Miller, its executive chairman, chief executive and president, put the whole margin gap on land: “It’s not labor. It’s not materials. It’s not overhead. It is land.”

This is the second issue of Latticework Business Intelligence, the series of in-depth coverage initiations from Latticework by MOI Global, and it covers Lennar Corporation (NYSE: LEN), the second-largest U.S. homebuilder by deliveries. As with Nike, we are releasing the whole package at once so that each reader can choose where to start: the report, the Excel model, our transcripts of eighteen Lennar earnings calls, a companion slide deck, and two podcast episodes, the first on the story and the second a deep dive for investors. The companion deck and the first episode are free; the report, the model, the transcripts and the second episode are for members. We welcome your feedback on all of it.

This initiation builds on our Industry Primer on Homebuilding.

Scroll down for the free-to-read summary slide deck on Lennar.

Initiating coverage on Lennar

We initiate coverage of Lennar’s Class A shares (LEN) at Long-Term Overweight against the S&P 500 over three to five years. The Class B shares (LEN.B) are not separately rated.

The operating improvements are real; the margin picture has yet to reflect them. At a fixed 10% required return we value a Lennar share at $112.93 to $148.86, with a median of $130.67, one value for a Class A share (LEN) or a Class B share (LEN.B), against a reference price of $74.92, the NYSE official close of the Class A shares on October 13, 2026.

The question is whether Lennar earns its cost of capital through a full cycle: not at its FY2026 margin, though on average it did from FY2012 to FY2025, after the bust. The cost of capital is our fixed 10% after tax, the hurdle we apply to every company we cover. Over FY2006 to FY2025, the bust included, Lennar’s return on equity averaged 7.0%, against 15.2% over FY2012 to FY2025, and the years since the Millrose spin-off fall short of 10%. The line is a reported gross margin on home sales of about 17%: FY2025’s 17.7% met it, and the first nine months of FY2026 (Dec 2025-Aug 2026), at 15.5%, fell short of it.

The value turns on incentives, land carry and the next downturn, far more than on further cuts in the cost of building a house. In FY2026 incentives eased, but lower base prices and higher land costs, partly option fees in the cost of homes sold, absorbed the gain. Our base case recovers the gross margin through falling incentives alone and gives Lennar no further credit for lower building costs. With selling and corporate costs easing back, the model’s EBIT margin climbs from 5.6% of total revenues in FY2026 to a steady state of 12.3% from FY2031, and each point of that margin is worth $10.62 a share at 10%. That recovery is what our title means by temporary: it is our view, not a finding, and the five risks we monitor, below, name the readings that would prove it wrong.

Management keeps its word on what it controls, and investors such as Berkshire Hathaway and Greenhaven are co-owners beside the Miller family. Lennar now builds a house in 116 days, against about 220 in early 2023, at about $80 a square foot, 14% below its Q4 FY2023 cost. On our scorecard, its method fixed before any commitment was scored, management is calibrated over ten years and 456 commitments, neither underpromising nor overpromising: Financial Services earnings and the average sales price kept their guides or beat them, and Lennar evaded only one question in 197 on its calls. Deliveries and, since FY2022, the gross margin are where it has fallen short, with 10 of the 24 margin guides given since then missed. Stuart Miller has led Lennar since 1997, with a new operating bench below him, and eight of the nine directors are independent. Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) has reported as a 10% holder since September 2026 and kept buying through October 2; by its Form 4 of October 5 it held about 12.2% of all shares and 6.7% of the votes, more shares than Miller. Greenhaven Associates, Ed Wachenheim’s firm, reported 5.08% of the Class A shares in May 2026 and held more by June 30; at Latticework 2025 he set out his case for Lennar. Both file as passive holders; we see informed outside co-owners as a plus for governance.

The first readings arrive by mid-December. D.R. Horton’s FY2026 results, due on October 29, 2026, are the cleanest outside check on how much of Lennar’s margin gap is choice and how much is land carry. Lennar’s own Q4 FY2026 (Sep-Nov 2026) report, due in mid-December, sets the cost ratio, the cost of homes sold over the price before incentives, against Q3’s 0.741.

What Q3 FY2026 told us

The quarter confirmed the gains in building speed and cost. Lennar’s fiscal year ends November 30, and the 10-Q for the quarter came on October 2. Deliveries of 20,840 landed inside the guided range, and cycle time set a record of 116 days. New orders of 20,879 fell below the guided 21,000 to 22,000, the first shortfall since Q4 FY2024. The new-order price fell $18,000 in a quarter, to $359,000, below the backlog’s $376,000, so prices in the order book are still falling.

Incentives eased, but a higher cost ratio absorbed the gain. Incentives fell for a third straight quarter, to 12.0% of the price before incentives, $51,000 a home. The gross margin on home sales rose only 0.2 points, to 15.8%. The cost ratio rose from 0.735 to 0.741, according to the 10-Q: “Land costs per home, reflected in part through option maintenance fees associated with extended deal durations, have increased”. The East shows what the relief looks like when it reaches the margin: incentives there fell about 6 points in a year, and the margin rose 2.3 points, to 20.9%.

The pipeline shrank while deposits and impairment indicators rose. About 86% of the quarter’s deliveries came from land banks. Non-refundable option deposits and pre-acquisition costs reached $7.24 billion, $15,197 per controlled homesite, up 19.7% in nine months while controlled homesites fell. Communities flagged for impairment rose 63% in a year, to 184 of 1,713. Lennar wrote down 38 communities by $100.0 million in nine months, against $25.6 million a year earlier.

The Q4 guide implies the first annual fall in deliveries since 2011. Lennar’s outlook for FY2026 is 80,000 to 81,000 deliveries, after fourteen years of rises. Its margin guide for Q4, 15.5% to 16.0%, implies about 15.6% for the year, the lowest full-year gross margin since 2009. Lennar set the guide before the 30-year fixed mortgage rate in Freddie Mac’s survey rose to 7.28% on October 1 and 7.40% on October 8, the highest since late 2023.

Our long-term investment thesis on Lennar

We take a side in each of the five debates: Lennar builds for less than it did, incentives are falling, and land options cost a little less than owning at 10%. The debates test one design. Starts held at the pace of sales lower the cost of building; cheaper and faster construction lets Lennar take homesites from its land banks as it needs them; the land banks, whose fees run with time, need construction to keep moving; and when demand softens, price absorbs the difference so that construction does not stop. FY2026 shows strain at three links of that loop.

Lennar’s operating loop as its filings describe it, with readings at Q3 FY2026 and the three links where FY2026 shows strain: land priced for another market, option fees in the cost of homes sold and lower incentives that did not lift the margin (Part I, Chapter 1).

Volume over margin won share; incentives, its main cost, are falling, but land-bank fees make it hard to refocus on margin. Rick Beckwitt, then chief executive, told the call of January 9, 2019 that Lennar’s “intent is to build and deliver more than 50,000 homes this year, even if it’s at the expense of some margin”, and the rule won share: Lennar’s deliveries went from 10.1% of Census new single-family sales in FY2022 to 12.2% in FY2025. Incentives did most of the damage through FY2025, 8.4 of the 13.7 points the margin lost from its Q2 FY2022 (Mar-May 2022) peak to Q3 FY2026. In FY2026 the parts traded places: incentives fell 2.6 points while the cost ratio rose 3.2 points, as base prices fell and land carry rose. Incentives have moved against the mortgage rate since the start of FY2023, so lower rates alone will not restore the margin. The builders that held price kept more of it: from FY2022 to FY2025 Lennar’s gross margin fell 9.8 points and PulteGroup’s 3.8. About 86% of Lennar’s deliveries now come from land banks whose fees accrue with time, so selling more slowly to protect price would raise the cost of every optioned homesite.

The gross margin on home sales fell from 29.5% at its Q2 FY2022 peak to 15.8% in Q3 FY2026. Incentives took 8.4 points at the peak’s cost ratio, and the rise in the cost ratio took 5.3 (Part I, Chapter 1).

Land-light and Millrose: optioning land protects Lennar in a deep bust and, after tax, costs a little less than owning it at 10%. The option model is the right answer to 2007: per homesite held at November 30, 2006, owned land lost about 6.7 times what the options lost in deposits. Worked through on the figures of Millrose Properties, Inc. (NYSE: MRP), Lennar’s largest land bank, an optioned homesite costs about 20% more than its takedown price; after tax, that is a little less than owning it would cost at 10%. The costs are real. The option fees run through the cost of homes sold, at roughly 2% to 5% of home sales revenue, and leaving is expensive: a terminated Millrose property owes a further 5% of its unpurchased takedown price, Millrose may then end the whole pool, and Lennar guarantees the payments within caps set pool by pool. Deposits per controlled homesite, at $15,197, now exceed the $14,363 a homesite Lennar forfeited on the options it left in FY2007, and Millrose, a related party, took 88% of its 2025 option fees from Lennar and its related ventures (85% from the Lennar program alone).

The production system has delivered results on speed and construction cost; the sales system has yet to deliver. Cycle time fell from about 220 days in Q1 FY2023 (Dec 2022-Feb 2023) to a record 116. Construction cost fell to about $80 a square foot, 14% below Lennar’s Q4 FY2023 baseline. Selling cost did not follow: in FY2025 Lennar spent about $32,600 of SG&A on each home, against $30,900 at D.R. Horton. After the gross margin and SG&A, Lennar kept $36,500 a home and D.R. Horton $49,600, at a lower price. No other large builder publishes a cycle time or a construction cost per square foot, so Lennar’s edge in building cannot be measured against the largest rival.

Returns through the cycle: above 10% on average from FY2012 to FY2025, below it with the bust and since the Millrose spin-off. From FY2012 to FY2025 Lennar’s return on equity averaged 15.2%; with the bust, FY2006 to FY2025, it averaged 7.0%, and an owner from peak to peak, FY2006 to FY2019, earned about 3%. Since the Millrose spin-off, return on equity was 8.3% in FY2025 and 5.0% annualized in the first nine months of FY2026. Options shrink a deep bust’s charge, since Lennar’s maximum recourse to joint-venture debt fell from $1,764.4 million in FY2006 to $30.1 million in FY2025. The bust’s cash cushion will not repeat, though: three tax refunds of about $1.42 billion carried Lennar through 2008 to 2010, and current federal law allows no carryback of a homebuilder’s operating losses arising after 2020.

Lennar’s return on average equity and its after-tax return on invested capital, FY2006 to FY2025: five bust years set the twenty-year average, and the later years cleared 10% until FY2025 (Part X, Chapter 35).

Stewardship and control: every share is equal in money, and the questions to watch are Millrose’s terms, succession and debt-funded buybacks. The family’s items are small, reimbursed or disclosed, and under the charter dividends, distributions, liquidation and a sale go share for share. Stuart Miller could cast about 43.5% of the votes at the August 2026 count on about 10% of the shares, his share rises with every Class A share the company buys back, and since June 2026 he has held all three top titles, with no successor named. He also casts 43.2% of the votes at Millrose, an interest Lennar’s Class A holders do not share. Capital returned has exceeded operating cash flow since FY2024: buybacks and dividends of $6.49 billion against $1.80 billion of operating cash flow through the first nine months of FY2026, while homebuilding debt rose $2.04 billion from its November 2024 low.

The five debates side by side: the strongest case on each side, the side we take and the reading that settles each, with its date (Part I, Chapter 2).

What a Lennar share is worth

At a fixed 10% required return, a Lennar share is worth $112.93 to $148.86, Class A or Class B alike. That is the 25th to 75th percentile of 20,000 discounted cash flow runs, with a median of $130.67. The same runs give $159.05 to $213.41 at 8% and $98.63 to $129.17 at 11%. Of the judgments the simulation draws, the steady-state margin moves the value most, by $45.37 a share between its 10th and 90th percentiles. With no growth at all, the mid-cycle business is worth $139.89 a share at 10%. The bear and bull cases give $84.68 and $192.43 and differ mainly in where incentives settle.

We discount Lennar’s free cash flow at a fixed 10%, the return an owner requires and the rate we use for every company in the series, with 8% and 11% beside it. The forecast runs in full to FY2031, free cash flow to FY2036 and a terminal value after it, and the range is the 25th to 75th percentile of a simulation that draws the judgments that decide the value: the steady-state margin, the years to reach it, growth, the capital growth needs and terminal growth. One value serves both classes, because the charter gives them equal rights to dividends, distributions and liquidation; they differ only in votes. Our models are built by AI research agents working without access to the share price. The person responsible reviews them and sets the final assumptions before publication. The valuation sheets hold no market data; those sit on a separate sheet that the valuation does not read. Then we set the range beside the market: what six large U.S. homebuilders trade for (D.R. Horton, PulteGroup, Toll Brothers, NVR, Meritage Homes and KB Home), what acquirers have paid for homebuilders, and the reference price, the Class A shares’ official close on October 13, 2026 (4:00 p.m. ET). Each peer’s earnings are adjusted for the one-time items it names, as Lennar’s are. We set no price target.

The range leaves out part of what a deep bust would cost. The simulation carries a downturn as a delay to the margin’s recovery, weighted by its odds: a correction, given a weight of 30%, delays the steady margin three years, and a deep bust, given 10%, delays it five. Each year of delay costs $2.79 a share. As built, the model takes nothing off for the busts beyond its forecast, so the range sits higher than a full-cycle owner should expect. The review of the valuation kept it that way; Chapter 45 shows what a through-cycle factor would take off.

The value of a Lennar share across 20,000 runs of the discounted cash flow at the fixed 10% and at 8% and 11% (Part XII, Chapter 44): half the runs at 10% fall between $112.93 and $148.86, and the rate moves the value more than any judgment.

We monitor five risks to our thesis, our “kill criteria”, to gauge whether the investment case remains on track. The margin would fail it through a gross margin on home sales below 15.5%, the bottom of Lennar’s Q4 guide, for four quarters while deliveries fall, a cost ratio above 0.750 for four quarters, or SG&A per home rising year over year four quarters running while volume holds. The land would fail it through write-offs above 5% of non-refundable deposits over four quarters, or through Millrose’s terms: a termination, a Prepayment call or a new pool priced above 8.5%. The cash would fail it through homebuilding debt above 20% of total capital, or buybacks funded with debt over a year. Each threshold is our judgment, set at the review of the valuation, of the reading at which the base case would stop describing Lennar. Two are short-term items to watch: the write-offs, whose cash-flow add-back reached $223.9 million in the first nine months of FY2026, 1.04% of home sales revenue and the highest share since FY2011, and the cash, as operations used $822 million over the same months while Lennar returned $1,359 million in buybacks and dividends.

Five risks to our investment thesis (our “kill criteria”), each with its reading at August 31, 2026, our threshold and where the next reading appears (Part I, Chapter 3).

Our rating is Long-Term Overweight against the S&P 500. The reference price is $74.92, the NYSE official close of Lennar’s Class A shares on October 13, 2026; the Class B shares are not separately rated. At that price the shares sit 42.7% below the $130.67 median and below the whole range at each of the three rates. If the gap to the median closes over four years, an owner can expect about 26.4% a year, against about 7.4% a year for the index on our assumptions: a difference of 19.00 points a year against the 2-point line. The rating holds if the gap closes over three or five years, at about 32.4% and 22.9% a year, and on a gross rather than net measure of the index’s buybacks. It would turn Long-Term Neutral only at a price above about $133.51, or at a median value below about $73.33 (Chapter 46).

Value per share by method beside the reference price of $74.92 (Part XII, Chapter 46): it sits below our range at 10% and below every precedent range, and in or below the bottom fifth of each peer range.

Lennar, Part One: The Story

MOI Global Equity Research — Wed, 14 Oct 2026 10:21:14 GMT

This is Part One of the Latticework Business Intelligence audio program on Lennar, from Latticework by MOI Global. It is the first of two audio programs that accompany our research report on Lennar Corporation (NYSE: LEN), and it is the story of the company, told for a general audience. The account is built from documented scenes, with the people named, the dates given, and the participants quoted in their own words. It assumes no background in business or finance and explains its terms, from homesites and gross margin to options, buydowns and land banks, as they arrive. This episode is free.

The program runs from 1954 to September 2026, and from Miami and Homestead to Houston, Irvine, Los Angeles, San Francisco, Wilmington, Washington, Austin and Fayetteville, Arkansas. Its people are Arnold Rosen, who founded F and R Builders in Miami, and Leonard Miller, who joined him with 42 lots; Leonard’s son, Stuart Miller, who started on the company’s raking crew and became its chief executive in 1997; the executives beside him, among them Bob Strudler, Rick Beckwitt, Jon Jaffe and Diane Bessette; Jeffrey Krasnoff, a co-founder of LNR who ran Rialto; Emile Haddad, who led Lennar’s bid for a former Marine air base; and the investment firms that became its land bankers. It follows how the business they built, which bought failed lenders’ loans in two busts, became one of America’s two largest homebuilders while owning fewer than one in forty of the homesites it counts.

Part One stands on its own. It tells how Lennar took its present shape, from F and R Builders in 1954 to the quarter that ended in August 2026, and it carries no valuation. The economics of the business, and the company as an investment, are the subject of Part Two and of the written report.

The program runs in fourteen sections:

It Is Land. On September 16, 2026 Lennar reports that it owns fewer than 2.5 percent of the homesites it owns and controls, and on the call the next morning Stuart Miller, its executive chairman, chief executive and president, tells investors that land is “the entire margin gap.”
Forty-Two Lots. Arnold Rosen founds F and R Builders in Miami in 1954. About two years later, by Fortune’s account, Leonard Miller, a young Harvard graduate, turns a $10,000 broker’s commission into a subdivision of 42 lots and merges it with Rosen’s builder; Lennar Corporation, its name joining Leonard and Arnold, is formed in 1969 to take the business public.
A Landmark for Lennar. In 1992 a partnership of a Lennar subsidiary and Morgan Stanley’s real estate fund pays $445 million for about $900 million of the failed AmeriFirst Bank’s loans and properties, and in July 1993 Stuart Miller, president of the division that buys failed lenders’ assets, calls a stake in a far larger portfolio “a landmark for Lennar.”
Two Rooms, One Minute. On October 31, 1997, the day Lennar spins off LNR Property and merges with Pacific Greystone, a California builder, the two companies’ stockholders are called to meet at the same minute on two coasts, one in the afternoon in Miami and ten in the morning in Los Angeles; in law, the Lennar of today is the old Pacific Greystone, renamed.
Meant to Be Together. In May 2000 Lennar completes its merger with U.S. Home, the builder that had filed for bankruptcy in 1991, and its deliveries rise by nearly half in a year; Stuart Miller writes, “These two companies were meant to be together.”
Further and Faster. In September 2006 Stuart Miller says the housing market is falling further and faster than Lennar expected, and at the end of that fiscal year Lennar controls about 280,000 homesites, a third owned, a third on option and a third through about 270 joint ventures that owe about $5 billion.
Thirty-Six Thousand Acres. In February 2007 LandSource, the land venture Lennar and LNR formed around the Newhall Land and Farming Company north of Los Angeles, takes in a new partner and pays Lennar $707.6 million in cash. After LandSource files under Chapter 11 in June 2008, Lennar pays $140 million in a settlement without which, a federal court later wrote, the reorganization would not have been possible.
Another Day. On the last day of fiscal 2007 Lennar sells homesites carried on its books at about $1.3 billion for $525 million to a venture it forms with a Morgan Stanley real estate fund, and Stuart Miller writes that the market has given Lennar cause “to retrench, to reconsider and to reposition for another day.”
One Asset at a Time. In February 2010 Rialto, the Lennar unit run by Jeffrey Krasnoff, wins an FDIC auction in a field that includes Starwood Capital, Oaktree, Fortress and Colony Capital; just under $250 million buys Lennar 40 percent of two ventures holding failed banks’ loans on which borrowers still owe $3.05 billion.
Evolve or Die. In 2018, the year the CalAtlantic merger closes, Stuart Miller tells Zillow’s co-founder Spencer Rascoff that Lennar lives “by a mantra of ‘evolve or die’” and that he will start thinking about printing homes when a machine can print a name badge; by November 2022 construction is under way in Georgetown, Texas, on a planned community of 100 homes printed by ICON’s robots.
The Accordion. Lennar’s letter for fiscal 2022 says that margin, “as opposed to volume, becomes the shock absorber and will fluctuate up and down, like an accordion,” and in fiscal 2025 Lennar delivers a record 82,583 homes at a gross margin of 17.7 percent, against 27.5 percent in fiscal 2022.
A Clear Runway. In 2019 Lennar sets out to control more of its land through options without owning it; the investment firms Angelo Gordon and Kennedy Lewis become its first land bankers, and on February 7, 2025 Lennar spins off Millrose Properties, which takes about 87,000 of its homesites and to which Lennar pays 8.5 percent a year on the money Millrose has put into them.
Three Titles. After Rick Beckwitt retires in 2023 and Jon Jaffe, who began at Lennar as an assistant superintendent on a Tampa job site, retires at the end of 2025, Stuart Miller holds three titles, executive chairman, chief executive and, from June 2026, president, and by the end of August he can cast about 43.5 percent of the votes, in a company whose Class B shares carry ten votes each.
Seven and a Half Weeks. On the call of September 17, 2026 Stuart Miller says Lennar is working through “a land basis that was set in another market condition.” The homesites Lennar owns outright, fewer than 12,000, are about 7.5 weeks of building at the pace it set for the year. In about 1956 Leonard Miller had come into the business with 42 lots.

The program runs 1 hour 23 minutes (1:23:05). The full research report, its companion slide deck, the Excel model and our transcripts of Lennar’s earnings calls are on the Latticework Substack under the title Lennar: The Misstep Is Temporary, the Machine Is Not. The companion slide deck is free; the report, the model and the transcripts are available to members of Latticework. Part Two, the deep dive for investors, is a separate episode, available to members of Latticework: Lennar, Part Two: The Deep Dive. For the industry behind this story, read our Industry Primer on Homebuilding and listen to its two episodes.

This audio program is published in Switzerland as Latticework by MOI Global. It carries no valuation and is not investment advice, an offer, or a solicitation. Neither MOI Global nor John Mihaljevic holds Lennar shares. Figures are believed accurate as of the dates stated but are not warranted; listeners should verify all data against primary sources before relying on it. Nothing herein constitutes legal, tax, or accounting advice. Full disclosures are free at https://www.latticework.com/p/disclosures.

Transcript

The transcript is available for download to members only.