John Touscany/iStock Editorial via Getty Images Shares of Fiserv ( FISV ) have been a brutal underperformer over the past year, losing about two thirds of their value. Last year, sharply reduced guidance sent the stock cratering, as investors realized much of its growth had to do with hyperinflation and interest rates in Argentina, with the rest of the business actually quite sluggish. While new m...
John Touscany/iStock Editorial via Getty Images Shares of Fiserv ( FISV ) have been a brutal underperformer over the past year, losing about two thirds of their value. Last year, sharply reduced guidance sent the stock cratering, as investors realized much of its growth had to do with hyperinflation and interest rates in Argentina, with the rest of the business actually quite sluggish. While new management has made strides in stabilizing the business, there is clearly a lack of trust that will take time to restore. FISV has been one of my worst calls, and my reiteration of a buy in February was also mistaken with the stock down 11%. This further underperformance has come even as results exceeded my expectations, with the multiple compressing further, to my surprise. With updated financials, now is a good time to explore if a bottom has been reached or if investors should cut losses and move on. Seeking Alpha In the company’s first quarter , Fiserv actually beat estimates by $0.21, earning $1.79, as revenue declined 2% from last year to $4.7 billion. This beat was not quite as impressive under the hood as its tax rate was unusually low due to a discrete $0.17 item. Adjusting for this, its quarter was essentially in-line with outlooks. Organic growth was down 3.6% from last year, as it faces slowing growth and has pivoted away from certain sales activity that provided little long-term profit. The company cut prices last year to manage attrition, and that is also weighing on results. Margins have compressed 8% to 29.7%. With cost cuts to rightsize the business, a fading impact from pricing investments, and continued Clover growth, we should be near the floor of margins, though I expect them to remain structurally lower than 2024-2025 levels. Fiserv Its Merchant Solutions business saw a 1% decline in organic revenue. The unit generated $626 million of operating income with margins at 26.4%, down from 34.2% last year. Clover volumes were up 9%, and this drove a 6% increa...
peshkov/iStock via Getty Images Dear Fellow Investors, 2025 tested our patience, but not our conviction. The fund ¹ returned -2% in the quarter, bringing the full-year returns to -10% ² . While this 12-month result is frustrating, it follows gains of 51% in 2023 and 27% in 2024. More importantly, although the fund was down, the underlying businesses were not. In any given year, a business can comp...
peshkov/iStock via Getty Images Dear Fellow Investors, 2025 tested our patience, but not our conviction. The fund ¹ returned -2% in the quarter, bringing the full-year returns to -10% ² . While this 12-month result is frustrating, it follows gains of 51% in 2023 and 27% in 2024. More importantly, although the fund was down, the underlying businesses were not. In any given year, a business can compound intrinsic value while its share price moves in the opposite direction. That divergence is uncomfortable, though not unusual, and it is rarely permanent. When business progress continues and valuation compresses, latent pressure builds and sets the stage for a snap back. Eventually, the multiple stops compressing and you get paid for being right on the business. I believe our returns have been delayed, not foregone. Historically, our returns have come in chunks or bursts; much like a coiled spring or a drawn crossbow, the conditions are in place for another burst. The quarterly letter is typically organized around our top holdings and significant new positions. In this letter, I want to use a different structure. I believe there are two distinct “setups” that several of our holdings fall into, and I want to frame them accordingly. The first setup, which I’ve dubbed “Bamboo Trees,” includes companies that made significant progress toward a radical transformation in 2025 with very little share price appreciation to show for it. The second setup includes companies whose share prices declined significantly in 2025 due to fears of changes that may never come to pass. These companies continued to grow and execute, but the market priced in negative outcomes that I believe are unlikely to materialize. For these businesses, I believe the other shoe is not dropping and I believe the risk/reward is favorable, as fear dissipates. Bamboo Trees The Chinese bamboo tree takes five years to grow. It has to be watered and fertilized every day, yet it does not break through the ground for...
Rabobank: "More War Seems Inevitable" By Michael Every of Rabobank Summit... then 'summit' worse? “TOTALLY UNACCEPTABLE,” was President Trump’s response to Iran’s belated reply to his peace proposal, which they have rejected as a “surrender.” Tehran thinks the US must do so instead: rather than handing over enriched uranium, pledging to never build a nuke, reopening the Strait of Hormuz, and dropp...
Rabobank: "More War Seems Inevitable" By Michael Every of Rabobank Summit... then 'summit' worse? “TOTALLY UNACCEPTABLE,” was President Trump’s response to Iran’s belated reply to his peace proposal, which they have rejected as a “surrender.” Tehran thinks the US must do so instead: rather than handing over enriched uranium, pledging to never build a nuke, reopening the Strait of Hormuz, and dropping ballistic missiles and support for regional terror proxies, Iran wants a permanent US retreat, reparations paid to it, and control of Hormuz. More war, where the US takes control of the Strait and/or bombs the regime harder to encourage it to sign a deal, seems inevitable if one rules out a 1956-style retreat . Indeed, Israeli PM Netanyahu gave a TV interview to 60 Minutes where he stated the Iran war, while having achieved a lot, is “not over.” Markets are not going to enjoy the prospect of greater and longer disruption to global energy supplies. However, new fighting may not be seen until the weekend . First, “because markets.” Second, as the US still doesn’t have everything in place it needs militarily to strike harder and for longer. Third, because over May 13-15, Trump will meet Xi in Beijing, where the focus will be on Iran as well as broader US-China relations. As postulated since the early days of this war, its resolution may run through Beijing. China, like Russia, has influence on Iran via supplies of key military goods. In that regard, some see Trump going to China with Xi holding all the cards (because Iran holds a Strait.) Yet others think a sustained war that pushes global energy markets and the economy past a terrible tipping point might see Beijing offer to lean on Iran rather than supporting it like Russia vs Ukraine. Naturally, that opens up chatter of a potential ‘Grand Bargain’ around the core interests of China, the US, and Russia (where President Putin presided over a deflated Victory Day parade and said the war with Ukraine may “be coming to an en...
Tashi-Delek/E+ via Getty Images Introduction Back when I last covered EPR Properties ( EPR ), I upgraded them to a Strong Buy, backed by their strong AFFO growth, ongoing portfolio diversification, and a very attractive monthly dividend yield. Following a strong quarter and another dividend hike while their pivot is advancing well, the stock recovered a bit, and even though EPR is no longer a Stro...
Tashi-Delek/E+ via Getty Images Introduction Back when I last covered EPR Properties ( EPR ), I upgraded them to a Strong Buy, backed by their strong AFFO growth, ongoing portfolio diversification, and a very attractive monthly dividend yield. Following a strong quarter and another dividend hike while their pivot is advancing well, the stock recovered a bit, and even though EPR is no longer a Strong Buy in my opinion (not far from it either), the company remains on a solid path towards a potential re-rating while the discrepancy between the business and the stock continues to be visible. Strong Quarter While Pivot Advances EPR Properties IR EPR reported a strong start of 2026, beating the market's FFO and revenue estimates by a bit and delivering a very strong 7.7% increase in AFFO, to $100.13 million, roughly 6.6% higher on a per share basis, supporting their significant pivot as they're diversifying away from theaters. EPR Properties IR In fact, EPR now expects even more dispositions as part of reducing their theater exposure to below 20% over the following 3-5 years, as highlighted previously, further reducing their exposure to an industry that the market seems to be quite against due to the ongoing transformation expected from streaming. As a result of a boost in expected disposition proceeds to $50 million to $100 million (from $25 million to $75 million), EPR now targets a post-pandemic record investing activity of $500 million to $600 million, also backed by their recent forward sales agreement under their ATM program for initial gross proceeds of $47.5 million. EPR Properties IR Financially, based on EPR's latest report , we continue to see an overall normal position for a REIT, with limited cash available but plenty of assets to cover their debt, as well as ample liquidity available if absolutely needed, while the net debt to adjusted EBITDAre ratio reached 5.2x during the quarter. EPR Properties IR Although the company has near-term maturities that expose ...