How we invest.
Few positions. Each one underwritten as though we were buying the company outright, and held for as long as that takes to pay.
Few positions.
Held for years.
We are not measured quarterly and we do not need to be invested. That lets us wait for the business we understand instead of taking the one on offer.
Concentration only works if the research behind each position is real. Ours comes from following the same industrial companies for years, through a full cycle, which is what makes a dislocation recognisable when it finally appears.
Four tests. All four, or no position.
We think like owners, not shareholders, and we have carried the operating seat that teaches the difference. A name that fails one of these is not sized down. It is left.
The asset or the operator
Only one of the two can be fixed from outside. We settle which we are looking at before anything else, because the discount rarely tells you.
A mechanism and a clock
Cheap is a starting condition. We name what has to happen for the value to be realized, and roughly when, before the position is sized.
The allocation record
What management did with the last decade of free cash is the disclosure we weight most. It predicts the next decade better than any plan they present.
Funded through a trough
Can the business carry itself through a downturn without a dilutive raise. That question sets our size more often than the upside does.
Private market value is the anchor.
Public prices move with sentiment. What an informed buyer pays for a whole business moves with cash flow and scarcity. We use the second to judge the first.
A wide gap, a durable one, with a reason to close, is the investment case. Everything else is commentary.
What we are solving for
The price a strategic or financial buyer would pay for the entire company today, built from the cash it actually produces and what a comparable asset last changed hands at.
Why the gap persists
Industrials are cyclical and thinly followed. A single weak quarter, a leveraged balance sheet or a dull end market is enough to push a name off the screens of most generalists.
Why it closes
Debt gets repaid, a segment is separated, a board announces a review, or a buyer appears. We will not own a discount that has no way of resolving.
We invest alongside our views.
Independence is not having nothing at stake. It is that nobody is paying us to reach a conclusion. We are not paid to promote a company, and we have no underwriting or banking relationship to protect.
Published for information only. Not investment advice or a recommendation to buy or sell any security. BluPrint Capital and its principals may hold positions in the companies discussed.
Get in touch.
For research access, a conversation about a company we both follow, or advisory work.