Shawn O'Malley

Nubank is a Latin American neobank with low funding costs, a trusted consumer brand, a cleaner credit portfolio, lower NPLs than Mercado Pago, and reserves above expected losses. Shawn says he did much of the work on it, has been impressed by its consistent numbers, and sees big ambitions including a US banking charter. It is a holding in the Intrinsic Value portfolio.

Ferrari is an exceptional luxury brand with pricing power, a rabidly loyal customer base where about 80% of sales go to repeat customers, ROIC above 20%, and EPS compounding at 18% annually for a decade. It can raise prices 8-10% per year and grow earnings without increasing volumes, while recycling excess cash into dividends and buybacks. Shawn is bullish on Ferrari long term but says it rarely looks cheap directly, so his preferred expression is Exor to buy Ferrari exposure at a discount.

Exor is a publicly listed holding company controlled by the Agnelli family that owns about 20% of Ferrari and a mix of other public and private assets. It trades at roughly a 60% discount to NAV, and its Ferrari stake alone is worth more than Exor's entire market cap, so investors get Ferrari exposure at about half price plus other assets for free. Management has compounded NAV around 18% annually since 2009 versus 12% for MSCI World, has shrunk shares through buybacks including a reverse Dutch auction, maintains an A- balance sheet, and has improved transparency. Even a bear case of 5% NAV growth and discount narrowing only to 50% implies roughly 10% annualized returns, while base and bull cases imply 15-16% and 20%+ returns. Risks are Ferrari rerating lower and Exor selling Ferrari to recycle into lower-quality assets.