2 Comments
Feb 22, 2023Liked by Six Bravo

Enjoyed this write up. Unfortunately I came across SIRE a bit late so the return wasn’t as good as I’d like. It’s actually a wonderful business to own for a long time. I’m investing more in NRP to cure my SIRE hangover, ha!

Kidding aside, the business has a few good things going.

1) Alignment with management since Robertson and affiliates own nearly half of the business; So far there’s no evidence of messing with minority unit holder equity

2) Correct approach in capital allocation - debt reduction (already good, can trim another $50M easily), then slowly redeem preferred units without much premium

3) The hated market sentiment is really good for us, as we can probably ride the steady growth for quite some time

4) Essentially it’s a speciality land holding co, so I actually approach it with a real estate POV. The debt service coverage is more than enough, while the cyclical nature of the coal/mining industry doesn’t affect earnings drastically. A sort of “heads I win tails I don’t lose” scenario.

5) SIRE, more than enough said. One of the most unique properties in continental US, there’s really no other solid way to invest in soda ash as other competitors belong to Turkish, German, and Indian companies. I’d rather invest in a LP based in Houston.

Expand full comment
author

Michael, thanks for sharing your thoughts! Those are all good points. We agree that this play is a unique opportunity and we're excited to watch as time unfolds. Stay tuned!

Expand full comment