Get Our Blog
  • Todd Peters

Unique Research - Looking Where Others Won't

NS Capital has created a research network that gives us access to one-on-one expertise on a global scale. Better Information = Better Decisions!

In an industry that over labels everything, the NS Capital Investment Committee believes there are only two investment categories: Established…or quickly establishing…leaders and too cheap to ignore. The first category is straightforward but the second requires a different perspective. Essentially “too cheap to ignore” is when most of the investing herd has become disinterested in an industry or set of companies. Think the “Clearance or Second-Hand Rack.” People that focus on “too cheap to ignore” are searching for the one diamond in a pile of damaged goods. Not an easy task in normal times but exponentially harder in the COVID-19 era. But, if done effectively, one can benefit from excellent return potential. As this perspective is a critical part of the Alpha Ring, we thought it would be interesting to get a firsthand account of this investment approach…with a focus on the last 12 months. Thankfully, we have an expert to provide that insight. That being Dan Lysik of Miller Value Partners. Dan has been an Alpha Ring manager-partner since May 2018, and we are fortunate to have him on our team. Below are key highlights from Todd Peters, Chair of our Investment Committee, conversation with Dan on March 1st.

What initially comes to mind as you think back over the past 12 months?

The past year was a bit of a roller coaster! The COVID-19 outbreak caused significant equity market volatility, 28 days during the year with moves of +/-3%, more than the previous 9 years combined and the most since 2008 (42 days). While the industry generally defines greater volatility as risk, we welcome the “dislocation”. We have found increased volatility tends to lead to the widening of price-value gaps and greater long-term return potential. Looking back over the past 20+ years, some of our best long-term investments started from one of these corrections.

So, March was a tremendous opportunity?

Yes, absolutely! We were watching as the market was penalizing companies well beyond a 12-month impact. They were acting as this was a permanent environment. The market seemed to be disregarding a company’s balance sheet. In many instances, companies we were following were trading below the liquidation values. This did not make any sense to us. We elected to play offense.

What were a couple of areas that drew your attention?

It is best to think of this as a search for opportunities in forgotten assets. Two that quickly come to mind is retail and oil. These industries were under pressure prior to the pandemic and were particularly punished as the early stages set in. It appeared that the market was assuming a large portion of these businesses as worthless. In retail, the market seemed to envision that 50% of pre-pandemic customers would simply never come back. And, in energy, the market seemed to imply that 50% of oil rigs would never comeback on-line…even if oil prices recovered. So, those industries were of high interest. Now, many companies in these segments rightly failed. The key is identifying those that will not only survive but have the potential to grow post-pandemic.

How do you have the confidence to search for those diamonds?

We have found that balance sheets, asset bases and free cash generation capabilities are incredibly important. In addition, companies with strengths in these areas affords the management teams the flexibility to adapt to a rapidly changing environment to maintain the enterprise’s fundamental value and, in some instances, take actions to create even greater long-term equity value.

Are conversations with company management critical?

Yes, very much so. It is the necessary piece to give us confidence in times of turmoil. We are looking for the smarter management teams that can quickly re-prioritize action plans. Our conversations focus on three key areas: 1) the balance sheet (how is the debt structured, what capital is readily available, and are there non-core assets that can be sold), 2) the cost structure (how can the company reduce near-term cash expenses to live through the downturn), and 3) the post-downturn positioning (ability to accelerate transition plans and enhance future revenue opportunities). Our understanding in these areas afford us the ability to buy more shares at tremendous prices.

Is the combination of defense and offense what you are looking for?

It is. We call it the multiplier effect. The goal is to protect the company’s value in times of stress while, at the same time, positioning the business for future growth. As the market becomes more comfortable in the company’s prospects, the stock price tends to appreciate meaningfully. An example would Bed, Bath & Beyond. This retailer used the pandemic to accelerate its ecommerce platform, which is showing much early promise. The market has rewarded this decision as the price stock has gone from a low of $3.56 per share (April 2, 2020) to $27.73 per share (March 2, 2021).

Concluding thoughts?

While we had a strong year in 2020, our current holdings valuation levels are still not far from their absolute historical lows. Collectively, the strategy is more than 50% below its 2-year high. Returning to normalized profitability and historical average valuation for our holdings over the next couple of years has the potential to generate meaningful returns. We are excited to see how 2021 unfolds.

Portfolio &
Money Management


Contact Us

4 Landmark Square - Suite 315
Stamford, CT 06901





ADV Part 2 | ADV Part 3 (CRS) Privacy Policy | Cyber Security Policy | Business Continuity Plan Client Secure Upload


Check the background of this firm on FINRA’s BrokerCheck.           


NS Capital LLC is a Registered Investment Adviser. NS Capital and its representatives are in compliance with the current filing requirements imposed upon registered investment advisers by those states in which NS Capital maintains clients. NS Capital may only transact business in those states in which it is registered, or qualifies for an exemption or exclusion from registration requirements. NS Capital’s web site is limited to the dissemination of general information pertaining to its advisory services, and through the NS Blog access to additional investment-related information, publications, and links.  Accordingly,  NS Capital’s web site on the Internet should not be construed by any consumer and/or prospective client as NS Capital’s solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice for compensation, over the Internet.  Any subsequent, direct communication by NS Capital with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. For information pertaining to the registration status of NS Capital, please contact the SEC or the state securities regulators for those states in which NS Capital maintains a notice filing.  A copy of NS Capital current written disclosure statement discussing NS Capital’s business operations, services, and fees is available from NS Capital upon written request. NS Capital does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to NS Capital’s web site or incorporated herein, and takes no responsibility such content.  All such information is provided solely for convenience purposes only and all users should be guided accordingly.


Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy (including those undertaken or recommended by NS Capital), will be profitable or equal any historical performance level(s).


Certain portions of NS Capital’s web site (i.e. newsletters, articles, commentaries, etc.) may contain a discussion of, and/or provide access to, NS Capital (and those of other investment professionals) positions and/or recommendations as of a specific prior date.  Due to various factors, including changing market conditions, such discussion may no longer be reflective of current position(s) and/or recommendation(s).  Moreover, no client or prospective client should assume that any such discussion serves as the receipt of, or a substitute for, personalized advice from NS Capital, or from any other investment professional. NS Capital is neither an attorney nor an accountant, and no portion of the web site content should be interpreted as legal, accounting or tax advice. 


Rankings and/or recognition by unaffiliated rating services and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if NS Capital is engaged, or continues to be engaged, to provide investment advisory services, nor should it be construed as a current or past endorsement of NS Capital by any of its clients.  Rankings published by magazines, and others, generally base their selections exclusively on information prepared and/or submitted by the recognized adviser. Each client and prospective client agrees, as a condition precedent to his/her/its access to NS Capital web site, to release and hold harmless , NS Capital’s officers, directors, owners, employees and agents from any and all adverse consequences resulting from any of his/her/its actions and/or omissions which are independent of his/her/its receipt of personalized individual advice from NS Capital.

© 2020-2025 NS Capital LLC. All Rights Reserved.