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Michael Vermut

Research Analyst at Newland Capital Management, LLC

Michael Vermut is Managing Member and Co-Founder at Newland Capital Management LLC, a hedge fund specializing in long/short equity strategies with a focus on industrial and financial sector investments. He has co-managed significant positions in companies such as Nine Energy Service and various other publicly traded industrials, helping the firm reach over $360 million in assets under management. Vermut started his career as a Senior Analyst at Harvest Management, later joining Balyasny Asset Management as Partner and Portfolio Manager before co-founding Newland Capital in 2007. He holds extensive experience in hedge fund management and equity investing, with a demonstrated record of portfolio performance, and is registered in regulatory filings with the SEC.

Michael Vermut's questions to COVENANT LOGISTICS GROUP (CVLG) leadership

Question · Q4 2024

Michael Vermut of Newland Capital pointed to the company's strong balance sheet and significant valuation discount to its peers. He asked about the potential for initiating a share buyback program given the positive outlook and the large valuation gap.

Answer

Executive James Grant acknowledged the valuation discount and confirmed the company is comfortable with its current leverage. He stated that share repurchases are a key part of their capital allocation 'playbook,' referencing the successful $110 million in buybacks during 2022-2023. President Paul Bunn added that the company intends to be on 'offense' with its capital allocation strategy to maximize long-term shareholder value, keeping all options open.

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Question · Q3 2024

Michael Vermut of Newland Capital questioned the capital allocation strategy, asking about the potential for share repurchases versus M&A, and sought clarification on the company's earnings leverage potential given its reduced share count.

Answer

CEO David Parker reiterated the company's flexible capital allocation policy, stating they will pursue attractive acquisitions or execute share buybacks, saying 'we're going to love ourselves' if the market doesn't. He and Executive M. Bunn confirmed that while the business model is more stable, the significantly lower share count provides substantial EPS leverage in an upcycle. They stressed that the company is structurally different and more resilient than its historical performance suggests.

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