Lookback: Greenhaven Road Capital’s 2019 Chicken Soup For The Soul Entertainment (CSSE) Thesis

If you are looking for the best ideas for your portfolio you may want to consider some of Greenhaven Road Capital‘s top stock picks. Greenhaven Road Capital, an investment management firm, is bullish on Chicken Soup For The Soul Entertainment Inc. (NASDAQ:CSSE) stock. In its Q3 2019 investor letter – you can download a copy here – the firm discussed its investment thesis on Chicken Soup For The Soul Entertainment Inc. (NASDAQ:CSSE) stock. Chicken Soup For The Soul Entertainment Inc. (NASDAQ:CSSE) is an entertainment and media company.

On October 13, 2019, Greenhaven Road Capital had released its Q3 2019 investor letter. Chicken Soup For The Soul Entertainment Inc. (NASDAQ:CSSE) stock has posted a return of 99% in the trailing one year period, outperforming the S&P 500 Index which returned 15.4% in the same period. This suggests that the investment firm was right in its decision.

Greenhaven’s fund posted a return of less than 1% in the third quarter of 2019, underperforming the S&P 500 Index which returned 1.7% in the same quarter. Let’s take a look at comments made by Greenhaven Road Capital about Chicken Soup For The Soul Entertainment Inc. (NASDAQ:CSSE) in the Q3 2019 investor letter.

“Chicken Soup for the Soul Entertainment (CSSE) is a bet that Bill Rouhana will continue to build through intelligent deal-making. He got Sony, a $70B Japanese conglomerate, to partner with his $120M market cap company on their streaming business, Crackle. Sony has invested hundreds of millions of dollars into building Crackle and its associated content. Bill structured a win/win deal where CSSE put no money down and yet was given the keys to Crackle while allowing Sony to benefit if he is successful. As part of the deal, CSSE got part of Sony’s ad sales team. As Bill indicated on the last call,

“As far as the acquisitions go, most of the tuck-in acquisitions we’re looking at, Jon, actually pay for themselves. And the primary reason for that is because we’re buying guys who are getting $8 or $9 CPMs…. But if we buy $8 or $9 CPM businesses, move them onto our platform, and get $19, you can see there’s a lot of room for a very profitable arbitrage there, which is immediately cash flow positive and which essentially could pay for itself.”

Insiders own more than 60% of the common stock, there is limited analyst coverage, and it is not in any indices. We will see if Bill can do everything he says he can with this opportunity; either way, this jockey has already negotiated himself from the kiddie ponies to a race horse.”

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In May 2019, we published an article revealing Greenhaven Road Capital bullish investment thesis on Chicken Soup For The Soul Entertainment Inc. (NASDAQ:CSSE) stock in its Q1 2019 investor letter. This suggests that the investment firm has been bullish for a long time on Chicken Soup For The Soul Entertainment Inc. (NASDAQ:CSSE).

Our calculations showed that Chicken Soup For The Soul Entertainment Inc. (NASDAQ:CSSE) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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Disclosure: None. This article is originally published at Insider Monkey.