Yet Another Value Podcast - The CoVest Select team on launching CoVest and their $OEC thesis

Episode Date: September 21, 2022

Kyle Mowery and Jake Miller come on the podcast to discus their new CoVest Select venture and then dive deep into their thesis for Orion Engineered Carbons (OEC).CoVest Twitter Account: https://twitter.com/CoVestSelectChapters0:00 Intro2:20 CoVest overview5:05 OEC overview9:05 What is the market missing with OEC?11:45 The supply demand dynamic for rubber black14:15 Why isn't this a simple generic commodity business?18:20 Are management's 2025 midcycle EBITDA targets reasonable?21:00 Why can't a bunch of supply come online in the medium term?26:05 How critical and replaceable is carbon black?29:35 Recycling carbon black?32:10 Will EPA capex really end?36:10 OEC's debottlenecking investments38:20 How the energy crisis effects OEC47:30 Why OEC over competitors51:10 Capital allocation and share buybacks55:40 CoVest overview59:55 Why work with CoVest1:05:05 Timeline for a CoVest investment

This episode is sponsored by TIGIS. Understanding expert insights is table stakes for investors today, and there's no better option than TIGUS. I've been using them for years to get up to speed on companies, and they've helped me immensely as an investor. Teigis also recently acquired both BAM SEC and Canales, adding a super fast way to access SEC filings and earning calls via BAMSCC, and offering access to more than 4,000 fully drivable financial models with Camelis. TIGIS is well underway to building a full suite of research products that can displace the legacy terminal providers like KAPIQ and FACSET. And I'd encourage you to check them out if you hadn't recently.

They're moving incredibly quickly with many new features and data sets. As a bonus note, blog readers will know that I run a monthly, well, actually, buy-monthly, deep dive series sponsored by TECIS. In them, I go deep into industries and companies with fast, and questions using Teague's expert calls. I'd encourage you to check that out if you're interested in seeing how expert interviews can help you learn more about a company and industry. Hello, and welcome to the Yet Another Value Podcast. I'm your host, Andrew Walker. If you like this podcast, it would mean a lot if you could rate, subscribe, review it wherever you're getting it.

With me today, I'm happy to have on two people, Jake Miller and Kyle Maury from Co-Best Select. Gentlemen, how's it going? Going good. Thanks, Andrew. great well hey let me start this podcast the way i do every podcast first a disclaimer to remind everyone that nothing on this podcast is investing advice i think we're going to have a little bit more disclaimers later so i'll pause it there but then a second with the pitch for you too my guests i've known the i guess it's the covast team the grizzly rock team for a long time kind of from a distance i know you guys do outstanding and really deep research on your portfolio names

The thing that connected us recently is YouTube recently lost CoVest Select, which is kind of the catalyst for getting you on. I think it's a product that I was telling you guys before. I'm really excited about. I think our audience is going to be really excited about hearing and knowing there's the opportunity out there. So maybe what we can do today, just you guys can do a quick 30 second overview of CoVest. Then we can kind of dive into the stock and company we're going to talk about today. And then at the end, for our listeners who are interested, we'll wrap back around with kind of a more whole. awesome discussion of COVEST. Jake, I guess turn it over to you to start COVEST.

Yeah, that sounds good. And if you don't mind, the compliance team over here wanted us to read another disclaimer. So always. So this discussion expresses our research opinions. You should assume that as for the publication date of this podcast, one or more clients of Burzley Rock Capital and CoVEST Select has a long position in the subject stock and stance of benefit if its share price increases. Following publication of this podcast, podcast, we intend to continue transacting the securities of the company covered herein, and we may be long, short, or neutral at any time hereafter, regardless of our initial recommendation. Our opinions are based upon interpretation of certain facts and observations,

all of which are based upon publicly available information. Great. So, disclaimer out the way, I think, Kyle, did you want to just do the 30-second high-level overview of Kovas? Yeah, and thank you again, Andrew, for having us on. And we're really proud as the Grizzly Rock team here to launch this new small cap co-investing platform. You know, we've been doing small caps for almost 11 years as Grizzly Rock. And what we're doing now is we're taking the best ideas, curating them and taking them out to institutional investors as a kind of a small-cap co-investment platform, if you were, if you will, collaborative, constructive. looking for businesses with inflecting fundamentals, et cetera. So we built this platform for ourselves,

but we realized that a number of our friends, are smart managers that do really good work. And from time to time, there's ideas that just deserve a lot more capital than certain managers have. So we've built a full business around it, including institutional business development and investor relations, operations,

compliance, SEC registration, all that. So covest-select.com is how you can kind of learn a little bit more about this emerging platform that's up and running. And, yeah, backed by the Grizzly Rock team. And thank you for your kind words in small caps. And hopefully we can shine the light on some of the stuff that we're seeing here today. Perfect. So that's great.

And again, for anyone who's listening, there'll be a link in the show. notes to the COVEST website if you're interested, and we'll do a little bit more wholesome talk at the end of it. But let's turn to an actual name that is the type of name and research that you'd want for a COVEST portfolio. The name we're going to talk about is Orion. The ticker is OEC. And I guess I'll just start. I don't know if Jake or Kyle want to start, but we'll just say, hey, what is OEC? What do they make? What are they? Sure. Yeah, I'll give you the quick rundown here, and we can kind of take it them there. So OEC's best thought of as two segments.

The first is the rubber black segment. So that makes commodity carbon black. And this is a ubiquitous product that everyone interacts with every day. And they probably don't know it. Pretty much anything that's black that you have in your house has some carbon black in it. You know, my phone case, that has carbon black in it. About 60% of this market is replacement tires, 15%. percent is going to be new car tires and the rest is various rubber goods and industrial and

mechanical rubber goods. So they are the third largest player in the commodity carbon black space, that 10 percent market share. And this segment accounts for about 45 percent of total company EBITDA. Carbon Black is sold on annual contracts with commodity pass-throughs. So while they do use a lot of fossil fuels, oil, pricing of those commodities is not a risk for this business and the earnings of this business. It is a commodity product, as I've said, but capacity right now is tight, and pricing is in an up cycle. And for a number of reasons, we don't expect any material capacity increases for quite some time. So again, while it might not be, you know, the greatest business ever. Is it a commodity chemical business? The supply demand outlook looks really strong for

the next several years. That's quite the pitch. It might not be the greatest business ever, but the supply demand outlooks looks really favorable. Yeah. Listen, I mean, that's, you know, hey, and price for everything, and I think we're going to talk, this is very cheap. But yeah, and that was the regular carbon black segment. I believe, did you want to talk about the specialty as well? Yeah, so the specially carbon black segment actually is a pretty good business. And we think that doesn't get the credit reserves in the market. So this is a true specialty chemical business. These are small volumes, custom products, pricing power over time that's demonstrated. And this is about 55% of their company's EBITDA. And about 55% of this segment's EBITDA comes from real

proprietary technologies, things that they're the only ones that can do. And they sell that at about 40, you know, over 40% margins. So this is things like lamp black, thermal black, acetylene black. And it's actually a secular growing business with some really nice tailwinds behind it, including- Can I just pause you there? When you say lamp black, can you just say what lamp black is so people can get a real thought of what a specialty thing that they, they are very few people can create? So they have a number of processes beyond, to make these specialty carbon blacks that are just not used anywhere else. And there's a couple of them out there.

Acetylene black is one that uses acetylene gas to make a number of products for UV batteries. I think we'll talk more about today. But it's just a proprietary technology process that is not used otherware to make specialty carbon blacks. Perfect. Look, I think that's a great overview. We're going to dive into lots of stuff here today. You know, I had two of you coming on, so I would like to joke that I did twice the due diligence for this episode. I think my wife was a little annoyed because at 8 o'clock Saturday, and I was like, I got to look up OEC.

But, let me turn it over to you. We're going to talk about a lot of stuff, but just high level. You know, there are lots of opportunities in the market. What do you think the market is missing that you guys are seeing that makes OEC a compelling investment that will generate kind of risk-adjusted alpha going forward? Yeah, absolutely. So it's a small cap, industrial, global business, and it's perceived as a chemical business that's about to enter its downturn, right? Especially in Germany, its crown jewel is in Cologne, Germany. And all we're going to see all winter is headlines about how terrible the EU gas supply, natural gas supply is. And that is a feedstock into their gas factor, super high proprietary. formulation, super profitable gas black business. That goes into solvents and coatings and things. So why is it interesting? This company is exiting an investment cycle, $300 million of KEPX going into the United States. It's an industry-wide cycle that was under the EPA, under Obama,

came in and mandated a reduction of Knox and Sox. And so that is concluding in, in six to nine months and you're entering a cycle in which the numbers are going far higher per management at their analyst's day and free cash flow is going to go from being tepid to being in the high 20s mid mid to high 20 percent free cash flow yields pre-growth cap backs for the next couple years at analyst day in june of 2022 management came out and said they're basically going to earn two-thirds of their market cap in the next three years. So you have a situation now that's currently priced at a low multiple, you know, 5.2 times street numbers for this year, street numbers for next year should be higher. Even in a recession, those numbers will be higher. They're getting a higher

return on this invested capital that's going into, that has been invested in the United States, and they're growing their specialty footprint in China, Italy, and now they're going to grow this EB battery materials in Texas. You've got numbers going up, free cash flow going up, and the world looks at it like a cyclical industrial. Yep, that's great. Just to add on to that, look, so Kyle mentioned things are going up. I think the company, they've been reiterating, like I can just, the last three appearance they made, CS Day, they're at Credit Suisse last week, they say we're at an inflection point. Investor Day, they say we're benefiting from megatrends. Annual meeting, they say demand is way outstripping global supply. You alluded to it, Kyle alluded to it.

So Jake, I just wanted to talk. Like, what makes the supply demand balance and kind of that inflection point so positive happening here? So I assume you're talking about the rubber black business, which, you know, again, relies on annual contracts with commodity pass-throughs. But I think what happened there is that just for a long time, they didn't earn their cost of capital on this business, right? So you never saw any new capacity expansion because, you know, no one's going to make that investment if you can't, you know, earn a good return there, right? And that only got worse with the EPA situation that started in 2019. So the EPA came in and said, you know, you need to add scrubbers to get rid of your socks and knocks.

that took a lot of CAPEX for these guys. That's going to be substantially finished by the end of this year. So it's just not some place where people earned a good return over time and, you know, there wasn't new capacity expansion. And then fast forward to this year, you have the Russia-Ukraine situation, right? So between Russia and Ukraine, those exports supplied about 35% of the EU carbon black market. market and maybe about seven or eight percent of the global carbon black market. So that's done.

And you can't ship carbon black. It's not like you can just say, oh, we'll just get it from China, right? For a number of reasons, it's heavy, it's dirty. If you put it into a container or the whole of a ship, you can't really use that container for anything else besides carbon black just because of the way it treats these shipping materials. So I think that underinvestment, coupled with the Russia-Ukraine situation, really made the market especially time. Todd, did you want to add anything there? No.

Well said. Let me. I think you guys hit on a lot of the stuff, the questions that people are going to show about. Like the first question that's going to jump out to people is, hey, these guys are pitching a structural gross story, supply demand, all that. But they're going to say there's been no free cash flow here historically. Earnings have kind of capped out. And this does seem like, aside from specialty, which seems very nice. But overall, this whole thing just seems like a generic commodity business that there's never really a pot of gold at the end of the rainbow there.

So I want to talk about that overall view. And then I want to talk about the earnings inflection point because I do think that's another separate issue. But just do either one of you want to talk just a little bit more about that generic commodity concern that I think are going to be top of mind for a lot of investors? Sure. look, the rubber black business is a cyclical business in which you should earn your cost capital over time. It's not a growth business. It's a GDP type business. You know, look, the tire business has been going onshore for many of these manufacturers. There's certainly a security of supply and associated contract pricing, but we're not arguing that the multiple

there is wrong. For the specialty business, we do think the multiple is wrong. Half this business is specialty. And by the way, they're growing in electric vehicle battery materials, neither specialty, which they're the number one volume producer globally of specially carbon black, nor the seedling carbon black, which is in the wire cable and electric vehicle battery markets, those are not five times businesses. And so what I think the market is currently missing with this multiple that's being assigned to these earnings are, this company is not going off the cliff with the broader industrial economy. They're entering a growth. In 2023 will be the second year of growth for the rubber black in a multi-year growth stage

based on the industry getting back to return on investment capital pricing. And then you've got the specialty investment coming on and growth from those volumes. So this business in the last specialty cycle in 2016 traded for eight to nine times EBITDA. Now the footprint is far larger. There's more facilities. They're more efficient. And quite frankly, the new issue, you know, Corning Painter has really focused the company on the right metrics, which is, which is instead of just revenue and pushing volume, as previous CEO did, was just focused on profitable growth, profitable volume and really taking this industry is all oligopoly and structure and taking it to the next. next level in terms of in terms of getting a return and getting free cash flow. And so once that

free cash starts hitting, we think investors are going to wake up in a big way. Yeah. Do you want to add anything? Go ahead, Jay. Yeah. I mean, just if you look at the magnitude of the growth, right, it's, I mean, they're going to nearly double EBITDA from 2021 to 2025 run rate. And that's per the numbers given on the management analyst day earlier this year. And the only things you really have to believe for that growth to happen is that they execute on these high ROI investments, which are already in progress, and in some cases near completion, and you have very modest, you know, pricing and volume growth, which, you know, we think is going to be pretty conservative, particularly going into 23. So, you know, haircut the numbers however you

want. You know, it's, you know, do your own work, haircut the numbers however you want. It's a pretty cheap stock, I mean, exceptionally cheap stock, really, on any reasonable outlook. Jay kind of stepped on my next question, but just to lay the numbers out. So right now, OEC trades for around $16 per share. That gives them an enterprise value of between $1.8 to $1.9 billion. And I think a lot of people look at this and say, hey, trailing earnings is $285 in EBIT. They're not really doing any free cash flow for a lot because of the EPA and growth investment we talk about. They'll do about $300 million, $315 million in EBDA this year.

So people are saying, oh, that's about six times. That's about right. But management has said by 2025, we'll get up to $500 million in EBDA, which, you know, you start running that. Now we're talking less than four times EBDA. That EBDA goes way up. EPA investments come down, free cash flows gushing out of the business. But I just want to push back on one quick point because it jumps out of me. I know the management team knows it. They even mentioned it on their Investor Day, right? Historically, this business had never really gone beyond. It was about a 270 million EBITDA cap that they said in the investor day. I think they got a little bit above that, but that was about where the business would peak at, right? And now they're saying, hey, by 2025,

just because of these industry step changes and some small growth investments, but nothing crazy, we're going to be able to do 270 million in the specialty business and 250 million in the rubber business, right? So each segment is doing what the combined company had kind of cated out previously. And obviously you guys believe something like this is possible. You've talked about some of this. But I just want to give you a second to address that because that's the second thing that as an investor, you see that much of a step change without like four new plants opening or something. You say, oh, wow, that's a, that's a really big step change there. So yeah, let me address that. So there are three new plans. Okay, there are three new plans in that 500.

mid-cycle number. There's Ravenna, Italy, that came up last year. That's a specialty plant. There's Hua Bay, China, that's scheduled to come at the end of 2022 and ramp into 23. And that would also include the battery materials, the cap of conductives, or what we're calling a seedling carbon black in La Port, Houston, Texas, okay? So those three plants, plus you get a return on the 300 million. $300 million invested into the U.S. plants for Knox and Sox, and Sox, so you get a return

on that. So that's not a plant, but on a return-based pricing grid, those are kind of the steps that get you from the previous mid-cycle. Company never disclosed what mid-cycle was. We thought it was kind of like 250 to 275, say, in like 2016. And now there's a line of sight to that 500. And those are the big buckets in terms of mid-success. cycle. Perfect. Jake, do you want to add anything to that? No, I mean, the only thing I would add is that, you know, if you talk about the three plants, right? You know, one's done. The other one's almost done. And, you know, the acetylene plant is really exciting. You know, no problems, obviously, on KAPX side, really exceptionally high R.I. And we think they're just getting started

there. Okay, so we've talked about supply demand and balance. I mean, I think on specialty, obviously, that requires more knowledge, more investment, a little more specialized skills. But on the rubber side, which, right, like basic carbon black has been around for decades, you would think if you've got this big supply demand and balance coming, like it would be pretty easy, hey, somebody goes, builds a new plant or something, obviously it's a little more, and it is a regional market. It's a little more complex than, hey, let's just go build a new plant. They've discussed before but I just want to talk to you guys like there's the third thing you're forecasting this big supply demand and balance in commodities supply always can come on a lot quicker and a lot more

supply comes in line and you kind of lead to a glut when you think you were going to have shortages so can you talk about the supply demand picture there sure um you know like I said these are normally annual contracts right um that are that are you know negotiated at the end of the year. Right now, negotiations are actually in progress for the pricing there, which is pretty, and they have been for a couple months. You know, that's pretty unprecedented. That's not something, you know, that the company's ever seen or that we were ever familiar with. And the company's talking about multi-year contracts. So again, that's not something that we've ever seen. You know, again, it's hard to know exactly what pricing is. You know, we hear industry chatter

just like everyone else, but, you know, pricing should be, should be very, very strong on those contracts. And, you know, in terms of supply, you know, it's just a lot more expensive to build supply in the U.S. with this EPA mandates coming on. You know, you have some carbon mandates and carbon prices in in europe so um you just need really strong pricing uh to justify new supply um and you know the companies that that do that just um you know have have better uses of their capital at this point so you know we if i don't think new supply in that segment is really a material risk and if it were you know it takes several years to build so it's not going to something that's going impact next year or even 24. I've done a lot of work on the refiners. And one thing the refiner

say is, you know, for a variety of reasons. Now, one of the reasons being a lot of people think oil and gas have a terminal value issue, right, whether it's 10 or 30 years, there won't be any. But for a variety of reasons, they say a refiner will never be built in the U.S. again, including a lot, NIMBYism, right? With OEC and Carbon Black, I could see kind of similar arguments. I don't think they've come out and said, we don't think a new carbon black facility will ever get built in the U.S. But I was just wondering, like, what would the process for building a new plant in the U.S. or Europe look like? What would the timeline? And especially in the U.S., do you think there will be new plants built at some point? There effectively have not been new plants

built in the Western world for like 50 years. Okay. And that's on the carbon black side. and then on the tire side, there have been new plants, right? So you have that supply, demand, and balance exists. I think that if you look at this industry, historically, the returns have been poor, and we think that's in a process of changing. And then you flip to carbon questions, emission questions, these are all real alternatives. What we've done is gone and studied all the other ways to make carbon black, right? Right. The most prolific, what's coming online is a business in Nebraska called Monolith Materials. Monolith is primarily a producer of hydrogen, liquid hydrogen for the power markets. So H2, but Carbon Black is a co-product of that process. But that is much smaller in size. Even with monolith coming on, North America is set to be.

structurally short, carbon black, and these are regional oligopoly markets, right, because the products is heavy and hard to move, as Jake mentioned. So, you know, there's another business called Origin Materials that's working on commercializing some things, but there are ways off from commercial carbon black. When we think about it, if we got, I got two little kids, I put them in the car, I want those tires to be as good as possible. and bio-maste materials thus far have not been specked in. There's some recycled carbon black that has been

and certainly environmental aspects and whatnot. But those have not been mandated by governments yet, nor have they been interesting from the voluntary markets from the consumer side. So we don't see, look, some industries are dirty and yet need to exist. And we think carbon black fits that at least for the next decade. Let me pull back to a basic question I should have asked earlier, and you kind of allude.

They're carbon black this way. There's origins trying to do a carbon glass black through biomass, if I remember correctly. Outside of just alternative ways to make carbon black, is there a replacement for carbon black? Like I think people have mentioned some silicon in some of the more EV stuff. But can you replace carbon black at all? Or, you know, I'm thinking like, prices really squeezed. We're super short. Is there alternative materials or anything, or is this just so basic, you can't replace it? Jake, you want that one? There's not a replacement of anything close to current prices, even kind of double current prices.

So I don't see that as a material risk. The other interesting point, just on the demand side, I think you mentioned with EVs, is that, you know, EVs actually helps the commodity carbon black side. EVs generate more torque, and that requires more rigid tires, which just require more and higher quality carbon block per tire. So that's actually something that's going to help the demand side there. And if I remember correctly, EVs are also, tends to be heavier, so they wear down the tires faster, so you kind of get the replacement cycle going quicker. Yeah, it's about half the life of a tire of Furny v. Ice. Also, I would say, Orion, I know we keep calling it a commodity

product, and that's probably pejorative. Even within the commodity grades, they are in the higher end. They're in more technical tires, mechanical rubber goods. It's still on the higher end side of this. And with cars getting larger and heavier, even on the ice side, and and certainly on the EB side, but that is helpful to them. This plant that they're bringing up in China is a technical tire plant. And so you say China, say carbon black, that seems commodity, but maybe not so much, right? Because there's a lot of carbon black capacity in China, and yet the company is bringing this facility up because of requests for high-grade products from their customers.

These guys are truly world-class in terms of research and development, working with customers and specking in specialty grades. And within, you know, they bucket for public consumption, public market investors, commodity business, which they call rubber and specialty business. But the reality is there's a spectrum of grades, right? And you go all away from gas black all the way down to, you know, the cheapest tire black, you know, fillers into into plastics or whatnot. There's a range of technical specifications. And as you walk down that range, margin goes down and competitors increase. But even within their quote unquote commodity side business, that's much higher than competitors. And it's one of the reasons we do believe the business is

specialty more than is being perceived by the market. So that's a dramatic delta in our perception of the company versus the markets as implied by the pricing today. I think one of the things they said at the investor day was they're like, look, we've got some stuff that's in our commodity business, but it's so technical, it actually carries margins higher than the specialty things. And I can't remember if this was the same thing or if it was something different, but they said, look, think about an F1 tire. Obviously, that's not a massive market, but the F1 tire, it requires, like, they want tires that are so heavy that don't bounce at all, like they're just always touching the ground so they can go as fast as possible. But that's us,

right? We make a really high, I think that would be on the commodity side technically, but that's a really high margin, really technical product that they made. Speaking of tires, Kyle, I think you mentioned recycle tires. And this is a dumb, dumb argument. But I think if you haven't done work on the industry, it's something that you'd be interested in. Like, hey, we've been making tires for, what, 100 years in America. We've made a lot of them. Why can't we just go recycle all the old tires once they're done, like kind of spruce them up a little bit and put them back on cars and we'll never have to make, you know, I think tires are what, it was 65% of commodity, 45% of commodity. I can't remember the exact number. But why doesn't that go to zero? Because we're just

recycling tires constantly. Yeah, there's always going to be a loss of, you know, the chemical binds with the rubber and how the chemicals all interact together. When you have a product that can't fail and tires fall into that category, as do many things, you're often going to be focused on version for just simple quality argument, right? Right. So that's what you've seen historically is a focus on virgin carbon black. And it's not just tires, but it's mechanical rubber. It's belts and tubes and hoses and all these things that power the industrial economy that we use kind of every day without realizing it. And so those all have to be pure. They have to be spectin. They have to work within other formulations of chemicals, right? Basically, nothing that Orion sells is used by the consumer or the in-market user without being a part of a larger product. Usually, it could be as small as 1%, right?

It could be as much as 40%. The range depends on the product, but that just hasn't been industry-wide, something that's really gone on. Jake, did you want to add anything there? No, nothing on that side. Okay, great. So we've talked about the EPA CapEx cycle, right? starting about four years ago, they have to invest about $300 billion into CAPEX from the EPA.

And I think one of the quotes they said in an investor day was they said, hey, Orion hasn't lacked for ops, we've lacked for cash. And a lot of that was driven by the EPA. I want to focus on two pieces there. First, anybody who's familiar with regulation would say most of the time you have regulation and there's more regulation that comes on the back end. So we're foreseeing this big cash cycle coming in as the EPA mandates go down. But what's to say the EPA is not going to kind of increase the mandates going forward or say, hey, you guys, like there's, you know, there's lots of emissions that go into making your product.

You have to go cancel those emissions out too or something, even though you're eliminating the emissions that your product does, like eliminate the inputs too. So why aren't we just going to see continued regulation that results in continued capax and this you're never going to see it go away? Jake, you want to take a stab or you want to do it? Yeah, I mean, listen, you know, I guess that kind of comes in like anything can happen, but, you know, they've already taken out, you know, the two, you know, harmful chemicals here. You know, we don't see anything material on the horizon, you know, and we've done a lot of work, especially that pertains to, you know, possible, you know, issues in Europe or anything, but, you know, there's nothing on the horizon. And, you know,

you would really be just, you know, singling out a particular industry for, you know, arbitrary reasons if you were to do that, I suppose. Kyle, did you want to add anything there? Yeah, I mean, if you look about decarbonization and decarbonization is actually a big theme in a lot of what we do, if you look at the carbon footprint of these products overall, Carbon black is not actually, the carbon black process can be dirty. That's true. And that's globally true on a furnace black process. It's the best in Europe and the best in the U.S.

and less in certain developing markets as well. But the impact, because the majority of products have such a small impact of carbon black, that you don't actually go after carbon black to go after something broader, or like transportation industry has gone after, you know, higher, you know, gasoline miles per gallon. That's a better way of bringing down the carbon footprint of products as opposed to the carbon black in the tire and the belts and tubes and hoses, right? So is it a possibility? Yes.

The thing that we're looking at the most closely is the bref set of discussions in Europe. That really, based on what we're seeing, is it going to come on before? 2026 if even then. And COVID kind of backed that up. But I mean, you look at this, you have businesses in the United States that didn't make the last investment cycle into Knox and Sox, so you've got the demand going up and the supply going down. I mean, it's possible that the government wants to put all these businesses out of business and then trying to import from China and or Russia, it would be the other swing. But now Russia is politically unstable in such a way. And the tire manufacturers don't want to deal with them, certainly in the U.S. in Europe.

And then the Chinese, the quality is lower and the emissions are higher. The quality is getting better, but still lower than, you know, than a cabot, which is a big public company, the biggest commodity producer globally, or a burla or, you know, an riot. So, you know, do we want to produce things in this country and or Europe so far? I think the answer is yes, and these guys do it in the most environmentally friendly manner possible. Let me, and I think we already discussed why this is a regional market, it's difficult to transport carbon black. And you guys also said, which I think is certainly true, people are looking saying, hey,

if we're getting our carbon black from China, not only is it expensive to import, but it's probably getting made with less environmental standards. So even if the government wasn't mandating that, I think GM does think about their overall footprint and for a small piece of it. So I think we've addressed the China risk and all that. But let me take another side of the supply risk, right? I said earlier, Orion has not lacked for ops. We've lacked for cash.

And some of the ways they're investing that cash as they kind of roll off the EPA cycle is these really attractive deb bottlenecking investments, right? And I think one of them they gave the, it's like less than two-year paybacks, right? $10 million in capbacks to free up $5 to $6 million annualized e-bile. Like these are really attractive. And it does just strike me like, hey, if this is an Orion thing, then it's probably an across-the-end the industry thing, right? Like Cabot is their big publicly listed US peer. Why isn't like Orion doing this, Cabot doing it? Every person is saying, hey, we've got all this cash flow as EPA rolls off.

We've got all these demodeling neck and deb bottlenecking opportunities. And it comes back to that first thing I said where all of a sudden you've got all the supply from these deboddlenecking opportunities and you've kind of ruined the industry outlook, oversupply, all that type of stuff. Yeah, I'll take that. So remember, Cabot is the number one volume producer of rubber black, the number two specialty volume producer globally. They run a furnace black process. That's 99% of carbon black globally is on furnace black. All their facilities are basically the same globally. Okay. And so they've run them really well optimized. Most of those plants have cogeneration, which is creating energy and actually feeding back into

The grid, the OEC plants in Germany do have co-gen, but not all the plants here have co-gen. So that's certainly an opportunity for cogeneration and putting back into the grid. But on the deb bottlenecking, since you called that out specifically, that is specific to the proprietary gas black production at Cologne, Germany, the only OEC has. OEC is the only manufacturer of gas black globally that is shipped globally. it's used primarily in automotive paint to make paint sparkle because it disperses really well. It has to do with the carbon compound and how the structure of that and how it disperses into paint and solvents and makes it very even. So it's used in high-end automotive paint. So if you're driving a BMW and the paint is sparkling, that's Orion gas flat, right?

I can literally see it in my head as you're saying it. Yeah. Yeah. So those are, they're very specific to Orion. Yeah, I think that covers the deep bottlenecking. You mentioned energy, so I'll just go there next. The other thing, anybody who's filing, especially in Europe, there is an energy crisis, right? There's no doubt about it. Making carbon black is mainly you put net gas into the plant to power the plant up, right? So your first, a lot of people's not first thought here, but when they start exploring the industry, one of the risks they're going to say is, hey, are they going to get cut off? off of all of their energy. Like, yes, there's Europe imports of carbon black, but who cares if you can't run your plants and these are going to zero? So how is, especially the European energy

crisis going to affect OEC? Sure. So I'll start on that one. Obviously, that's one of the reasons the stock is so cheap right now and similar stocks. But so the first part, I would say, just on the co-generation, as Kyle said. So there actually isn't a risk here from higher energy prices. Higher energy prices actually lead to higher earnings for these guys because they sell electricity into a grid. But yes, if there's reductions such that it impacts product, it impacts their ability to produce that will impact the business, the company actually gave some really interesting, you know, metrics on the last call. And even at a 40% reduction to German gas, you know, the stock is still still super cheap. I mean, you're getting kind of

mid to high teams, cash flow yield here. You know, there's no risk to any of the growth capacts and certainly not any risk at all to the solvency, even in a case where there would be, you know, zero EBITDA in Europe. I mean, you know, we don't have any particular, you know, insight into what happens there, of course, but, you know, we are pretty confident that, you know, even in a worst case, you know, a complete shutdown of the, you know, Germany economy, which we see is unlikely, you know, these guys are not going to have to, to cut investment, there's not going to be any kind of solvency issues or anything like that. And obviously, that's not going to be a permanent state of the world where, you know,

the European industrial economy, you know, freezes up forever. So, you know, we feel fine here. It's obviously a risk and it's obviously something that's priced into the stock. But, you know, they're taking the right steps here. they're getting off some of the gas. They're able to substitute fuels in a lot of their plants and they're working on that now. So there's a lot they can do. And even in a pretty bad case, you know, they'll be just fine. And Jake, correct me if I'm wrong, but if I remember from the call, they said, look, the EU asked people to cut back by 15%, and we've already done that. And they gave,

hey, if we have to cut back by 20%, which is kind of their base case, and I think what they've already done, it's a very small hit to earnings. If we have to go up to 40%, it's a hit, but it's not material, and hopefully that will be temporary. And then the other thing they said was, hey, we don't think we get there because as both you and Kyle said, we're a preferred supplier because we do co-gen, so we actually supply energy to the grid, so they like that. And B, also, hey, if you shut us down and you shut down, you're shutting, we are a critical

input to industries, you're shutting down a hundred other attack on industries. Is that all correct? or am I missing? That's exactly correct. It's probably a better way than I said it. But that's what I was trying to say in a more succinct. No, no, no, you did the heavy lifting. I was just making sure I was thinking about it correctly.

Kyle, did you want to add anything on the energy risk there? Just that management here is exceptional. They've been in front of this issue. They've been on the ground. They were on the ground in the spring and early summer getting in front of this issue. And they're going to address it. as well as anyone can. The other thing is, yes, the Crown Jewel is in Cologne, Germany.

However, the second largest specialty facility is in South Korea, and the third largest is here in the United States. So they have the ability to shift production around their global footprint, there's South Africa, there's Italy, there's China, et cetera, in addition to the EU and the U.S. So for a billion dollar market cab company, this is a vastly international and global business. And I don't know. I don't have the earnings number from Europe off the top of my head.

Maybe one of you does. But I'm just looking at their 202110K, less than 50% of their sales are coming from Europe. You know, it's 1.5 billion in sales about 650 to 670 million is Europe. So even if that went to zero, yes, there's a lot of overhead and stuff. that's a disaster, but you've got earnings elsewhere, you've got everything else elsewhere. Did I miss anything on that piece? No, we went and dug through the German subsidiary filings, and our best guess, because there's a lot of intra-company dealings, but our best guess is that the Germany facility is

about 120 million of EBITDA, now management guide at the midpoint for this year is 325. So, yeah, it's about a third, maybe a little more than a third of the business. The Crown Jules in Germany, let's not, you know, sugarcoat this. However, we think it's wildly manageable and certainly, as Jake was saying, even in this 40% reduction of natural gas, right, even if Nord Stream stays shut down and the EU and Germans can't figure out how to get natural gas. And by the way, natural gas is one of the most widely used chemicals, most ubiquitous chemicals on the planet, right?

It just has, they just have to figure out from a political standpoint how to move it around and how to get it there and do it cost efficiently. But the costs are going to get passed through to the customer. You have a situation in which we think we're going to be okay. And even if that negative 40, down 40% natural gas occurs, our modeling for next year is still 17%. Oops. I think we lost Kyle there. Jake, are you still with that?

Yeah, I think free cash. as percentage to us, that's, hey, Kyle, we lost you there for one second. Jake, maybe you can just I think you know. Yeah, I think what I was saying is that even in that 40% gas reduction scenario, you still have about a 17% pretty cashful yield before any any growth cap X there. So, you know, even if, you know, that if the stock is still a cheap stock, even in that scenario. Let me just, last risk I want to talk about, you guys talked about earlier. We've talked about the supply demand imbalance, but again, this is a, this especially historically has been a cyclical commodity company.

The first risk that's going to drop to everyone, everyone thinks we're going into a recession. Do you want to buy cyclicals right in front of recession, right? So I just wanted to give you guys a chance to talk about the recession risk here, because it's going to loom off the top mind for everyone. Yeah, Cabot got that question at a conference. last week, and they said they think they can grow earnings through a broader economic recession because of this supply demand imbalance in rubber black and the way that the contracts are structured, passed through energy. But right now, those contracts, which historically were,

as Jake mentioned, annual, those contracts used to the discussion start after Labor Day. They started before Memorial Day this year, which is the earliest the industry has ever seen these contracts begin because of the supply demand imbalance. And the Russia situation, the human tragedy that it is, also forced the Western supplier, the Western tire manufacturers to say, oh my gosh, we need to get this supply. We need to get it locked in now. And so what you're seeing is return on invested capital for the industry is working up in lockstep based on these imbalances. Yeah. And we've talked about it a little bit. But when you take Russian carbon black off the market. I think they had a slide in their most recent earnings. I know you know you guys

have retweeted it. The Europe is so unbelievably short carbon black. It reminds me what's happening with coal, LNG, everything. Like these guys are saying, hey, this is, it's not a massive piece of our cost structure, but it is a, we can't have a business without it. We need to lock in long-term supply just so we're not shut down because this thing that makes up, you know, on a car, how much is carbon black of the car? It's almost nothing. But if you don't have it, you don't have the car. Let me turn to, you mentioned Cabot, Kyle. That's a great, that's a great segue. You guys are obviously very bullish on the industry overall, but they do have big publicly listed competitors. Cabot, big, U.S. listed. They're a little bit more diversified,

but you know, the majority is carbon black, if my kind of scan of the 10K was right. There's Burla, which I believe trades in Thailand, so maybe that's off limits for a lot of people. But why choose OEC over Cabot or kind of a similar competitor? So Cabot has done a great job telling their story. They trade at a higher multiple, currently 6.7 times on 22 Street, midpoint of Ibidah. That's a turn and a half higher than OEC. Cabot has done a great job. They've had two analyst days.

And Orion's only had one. And it came literally the week before the Putin shut down the pipeline. So that wasn't helpful for perception or narrative. narrative type of understanding. But they have been Cabot has been

very open about their growth in carbon nanotubes and they bought a business in China that makes carbon nanotubes. And that's about 4% of their

earnings or carbon nanotubes and carbon nanotubes are electric vehicle conductivity materials. Orion makes 7.5% of

their IBA from these similar type materials, but they haven't been as broad about telling that story. And in terms of into the EV battery, there are a couple years later than Cabot. So the big investment for Orion is Greenfield in Texas. It's going to generate $50 million of EBIT, but it's not going to be up for a couple years. So you have the situation where Cabot became a quote-to-quote backdoor way to play EV batteries, and Orion yet hasn't had that in their narrative, although the technology is exceptional for Orion and earnings growth. I mean, $50 million in EV battery materials, what's the right multiple on that? It's not 5.2, 5.5, right?

That in the market should trade for a much higher multiple. Now, they still have to build it. But Orion, in terms of going Greenfield, got specked in with the battery manufacturers globally. They can't announce that because the battery manufacturers are very specific about secrecy around what their formulations are. But Cabot's done a great job getting into that. It's a secular growing industry. Look at Cabot slide. It's up into the right on that business.

And it's up into the right for all the EV battery materials, whether it's lithium or any of the nickel, all these materials, it's up into the right for all of them. But when you have two suppliers of acetylene carbon black, it's Orion and Dengka out of Japan, you have a situation in which the profitability should be there. And so, you know, that is certainly an area that the market, we believe, will begin to value Orion over time on this and see what they are already seeing in Cabot. We think Cabot does a great job. We think they're mispriced security here is Iran.

Perfect. Jake, did you want to add anything to that? No, nothing on that side. Great. I have one or two more questions on Orion, and then we can turn to a little bit of a longer, the longer co-vest talk we promise to the start. I have to ask this question on every podcast,

but I think it's particularly relevant now. Share buybacks. The past three appearances that I believe Orion's made, so the CSI reference, Q2 call, and they're very long investor day, someone has asked them, hey, you guys are pitching this great secular growth story. You guys are really cheap, as I hope we've laid out really well in this podcast, you know, five or five times current EBDA and five or six times current EBITA and way less if you give them any credit for the growth story. Free cash flow is about to come gushing in.

Your balance sheet is looking solid. And everyone asks, why aren't you buying back shares? And their answer, management's answer has been, hey, we think we're undervalued, but they basically they say, recession, Russia, lots of risk out there. We can't buy back shares. And it does strike me as, you know, a little strange. They're saying how undervalue the story is. They're saying, don't worry, secular growth story. Recession, yeah, our earnings are even going to grow through a recession due to just this great supply, demand, amount to we have, and they won't buy back shares. So I just want to ask you, like, the capital allocation. Why aren't they buying back shares? What do you guys think about the capital allocation here? Jake? I mean, yeah, I think we would say,

that it's coming. You know, in the next couple of years, there's going to be pretty significant pre-cash, even after the growth cap X that they have planned. You know, I guess they could just, you know, there's not a lot of current cap, you know, current cash in the balance sheet today. You know, I don't think they're just conservative guys. I don't think they want to just juice the leverage right now to do more buybacks. But it's coming. You know, we, we've, we'd like to see them, you know, do some buybacks and also, you know, they have some really high ROI investments. So that's, that, you know, that's going to be a really good problem for these guys to have in a year or two. But I think it's going to be a yes and kind of story. You're

going to see buybacks and, and growth investments from the, from the cash that's coming down the pipe. Perfect. And just, go ahead, Kyle. Just to put a bow on that, the CEO is, he's an engineer. He's a conservative engineer. He's got these headlines, but he himself is buying stock. The CEO has bought $6 million of stock himself, okay, out of his own pocket over the last couple years. Secondly, they added a board member this summer. And they also in their charter, they opened up the charter so now they can legally buy back

stock. So as the seasonal working capital ebbs into the winter here, I'd be surprised if they don't. they don't buy back stock, it will be because they're concerned about the EU, the energy situation, demand, et cetera. But the balance sheet's great. The management team is exceptional. And now with the board member who is a significant owner of the stock, the alignment is there. So we, as Jake mentioned, we have high hopes here. Kyle, I'm laughing because you front ran me. You know, Corning, as you said, he's bought back share several times in the past. He's bought shares several times in the past year as recently as

August, he buys $500,000 worth of shares at just under 17. The CFO bought a couple hundred thousand dollars of shares in May. You had a bunch of board members buying back all in probably $700,000 worth of shares at the start of this year. And all of them are at prices, you know, in the 15 to 16 range. So right around here for people who are asking. I guess just on that, I do want to quickly ask insider ownership, like that share, the share purchases on the open market are really nice insider ownership nothing special here there there's no huge activists or anything do you guys look at insider ownership uh kind of shareholder focus do you all have any concerns there or no corning yeah corning bobbex you know he's bought six million dollars out

of his own pocket so perfect one last question i always see and then we'll turn to coves this is a really hard hitting question so i want you guys to think about it seriously at the investor day had specialized rubber balls, and I think one of them was engineered to bounce higher if you threw it on the ground. So they said people could play with it after the breaks. Did you guys get to play with the specialized rubber balls? Yeah, I played with it, and I brought it home from my kid, and it's probably somewhere in the house with all those other jumps. So, yeah. Okay, I told you, the hard-hitting questions are coming. Well, hey, that was great. That was a really interesting overview of OEC, which I know you guys have done a lot of work on is super interesting. Now, let's just

turn to a longer COVEST talk. Kyle, I guess you're the founder, so I'll flip it over to you. If you just want to do a high level overview of what COVEST is, and then I've got some questions, which hopefully won't make this sound like too much of an infomercial, because I can guarantee you guys in paying me. I'm just excited. But do you want to start, Kyle? Yeah, we built COVEST to solve our own problem. So I've been running Grizzly Rock. Now we're in our 11th year, small cap, long short. Can't talk too much about it, obviously, because it's a private vehicle. But one of the things we recognized was from time to time, there were these ideas that were exceptional.

And we were right for the right reason. And we had earned the right to be right. And there was a number of our friends who had very similar experiences. And those of us who run businesses or just invest personal capital, whatever it is, will maximize the position size for your strategy. And that might be 5%, 10%, 20, 30, 40, whatever it is for each fund or each person. But those ideas deserve more capital because they are that compelling. And so we have pursued a number of SPVs at Grizzly Rock historically.

and we wanted to provide a platform for not only our own ideas, but also for managers, friends of ours, right? Lesser-known managers who maybe they don't have a full-time investor outreach person, but I don't have someone asking who cares in the institutional investor community about investing in small caps that are reflecting, right, and telling that story and crafting and curating that story. It's nuanced, right? We're not activists.

We're not investors in private markets for the bulk of what we do. We are constructive, collaborative small-cap investors. We're looking to curate these small-cap ideas at the right time. So it's 12 to 18 months, maybe 24 months, but you're right. You know, entering a catalytic path where we think we can really get paid, right? It's isolating that sprint within the marathon of the investment and taking that out and taking that out in a way that institutional investors can understand and appreciate and then invest that capital in the idea. So it's no extra work other than telling the story for us.

And so we wanted to set this platform up and we realized we'll have one, probably one a year for the grizzly rock team. But there are a whole bunch of our friends who are asking, well, how can I do this? Can I do this with you? Help me along. So we decided to build a platform called CoVEST Select. It's covest-select.com. There's, you know, gives all the information. So what we are looking for is managers to partner with and grow their businesses. And there's no, there's no ask for the manager.

There's no upfront. You got to scratch a check. If this works, we scratch a check to the manager. And if not, then, you know, no harm, all water under the bridge and we move forward. So we're helping to grow, we're helping to grow each manager. manager's business and grow their business profile and make them money. That's really one plus one equals three was the goal. And one of the reasons I was so excited about this because I think it's an awesome idea. One of the reasons I think it made sense for you guys to come on is because

this is a podcast where we dive deep into a stock for an hour. The audience is probably going to be the type of people who maybe could have a co-vestworthy idea someday. But just I know why. But if you're somebody who's listening to this and Jake and Kyle come to you and say, hey, we've got this great product. You've got a great idea. Give us the great idea and we're going to help raise an SPB. I think someone younger and a little more naive might think, oh, my idea is so great. I can just go out and do this myself and not have anyone else to share the idea, not have to share the idea, all this type of stuff. So why should somebody who's got this great idea come and work with COVES instead of kind of doing all of this themselves. And again, I know the answer, but there are going to be

some naive people who think they, it would be easy to on their own. Jake? Yeah, I mean, I think we just have a great relationship with allocators who are looking for these types of ideas. You know, you know, public co-investments is still, it's definitely a growing area, but it's still a small area, you know, on the co-investment side, you really still see it more on on the private side. So we really know, especially small cap public co-investments, it's just still kind of a niche market. So we really have those relationships. And we are able to get in front of those people and get in front of them in a way that they like to see it. You know, we have a standardized template. We've invested a lot in, you know, how the look of our documents are, you know,

the branding, et cetera. So, you know, we can get in front of those decision makers. And and get it in front of them in a way that they're going to be receptive to, which is, you know, someone who's, you know, managing a fun, you know, by themselves as a one-man shop or as a, you know, two-man partnership probably doesn't have the relationships and bandwidth to do. You know, not stepping your toes. And I think the relationships is number one. But I also think the reason of my head, almost one A and one B is also the structuring, right? Like the structuring. If you go and try and do this, like, creating the wheel from scratch, you're going to be spending all of your time dealing with lawyers, docs, all this type of stuff.

And you guys can correct me if you're wrong, but you've done these in the past. So you're going to be able to help. You've got the template. It's just going to be so much faster. And for the manager, they're going to be able to kind of mentally outsource 98% of all the structuring and the docs and everything. So again, not to pitch too hard. Please tell me if I was wrong on anything I just said there. No, that's absolutely right. You know, we have the auditors and and the lawyers and the structure are already in place. So it's really, you know, plug and play at this point. If I'm an investor and I'm listening to this podcast and I hope we, I have a broad range of investors, right? People who like to invest in compounders, people

like to invest in cyclicals, energy focused people, consumer focus people, people who want to go run an activist campaign on a $750 million company. You guys just pitched a cyclical. Can anyone come and pitch this? Like, are you guys going to be open to all sorts of different investment ideas? Are you you guys going to be open to all sorts of different investors. Like if we've got a 27-year-old petroleum engineer PhD who's done a lot of work on a $500 million market cap oil and gas company, he has no experience running an investment. Should he send in his idea to you or should it really only be small-cap focus funds? We'll take everything. And we sign an NDA, okay, up front with the investors. We're not doing this to try and, you know, steal people's ideas. We're

trying to build our business at CoVest alongside other people's businesses or profiles. We're not going to do all the deals, but we probably won't do most of the deals that were shown because we're curating the ideas for the investor community. If the idea is exceptionally risky, that doesn't fit our profile. I know because of the public nature of this, we can't talk about the grizzly rock story and our fund and what we do. But we're value investors. We're focused on free cash flow. And when you get that right, you're not going to have these major drawdowns. So we're not, we're not shooting for the stars always. But we're just saying from time to time there are securities that are wildly misprice and misunderstood for a certain reason. We can understand

why that's the reason. And if we can do that, we can build out these co-vist dossier. It's usually a hundred and twenty-five pages, not because we're trying to wow people with how many slides we can create like a, you know, banker. It's just about doing the diligence and presenting it in such a way where, no, we've got the risks taken care of. We understand a corporate governance. We understand the incentive. We understand the industry. And we're saying, yes, all of that. And here on a platter to the right investor, right? Our full-time business development person knows who wants to see cyclicals, who won't look at something with commodity exposure. Who wants to see a hedged series, and we can give

a hedged version from an industry factor perspective, from a market perspective, right? We can toggle all these dials and truly offer the investor what they're looking for. That's why folks should think about us as they try and grow their business. So if somebody's coming to you with an idea, I think the base level is, look, you've got the industry nailed down. You know the company. You know, like, those are the basics for anyone pitching an idea these days. You could come on this podcast and do an hour long podcast talking about the company, right? So that's the basic. But just one quick thing.

What is the, it's fundamental research, all that sort of stuff. What's the timeline for these? Like, should someone be coming on this and pitching, hey, I think within the next year, this is a takeout candidate. We are going to be wrapped up in 366 days? Are they coming on in pitching, hey, this is a two to four year story. Hey, this is a compounder that I think we're going to private equity style buy and hold for seven to 10 years, right? So what should the people kind of be thinking along the thoughts of that time frame? I think our investor segment or the profile that we believe works in public co-investments are things that are entering a catalytic path or a catalytic window.

So we want to be isolating 12 to 18 months. so we have things that are compounders that we have not yet taken out as SPVs because how and when are you going to get paid don't know but we think we will that probably fits really well within a fund and it probably makes a great podcast as well and happy to come back and talk about some of those to the extent your interest you're getting held to that Kyle you said the magic words you're getting help to it no problem but for but for the what the investor community he's looking for in public co-invest is something. So historically, there are active ideas, right?

We're going to go active. We need to raise another $100 million to go, you know, pound down the door. Over 5% file our 13D run an activist campaign. Yep. And we've filed some 13Ds in the past, but we've found a better way that works for us. And that is being collaborative and constructive working with management, showing them more information, showing them, your stock is here, it should be here, and here's the discrepancy. It could be narrative. It could be corporate governance. It could be capital allocation, whatever it is, and really trying to get a focus on that,

whether it's an analyst day or a communication of corporate governance or speaking with a lead independent director. These are all things that could be part of that catalytic path, and those would make really good public market co-investments. But, and look, if something is just that cheap and the numbers are inflecting and the market's missing it, that's fundamental small cap investing, right? And that may or may not work for certain investors, too. So, well, all we're saying is as a platform, the platform exists, you work with guys that have been doing us for a long time. Jake and I, the backgrounds, or, you know,

you can see it online. And we're trying to grow our business alongside others' businesses. And we're pretty well known in the small cap community. I don't disagree. We just connected in the past month, but I've known you guys. for a year so I no disagreement there. I'll remind everyone, I'm going to have a link in the show notes to, but if you want to find it, it's CoVest Select. They've got CoVest Select is the Twitter account. You can Google CoVest Select and find the website there. But guys, I think we've covered a lot on OEC. I think we've covered a lot on CoVest Select. I'm sure we could keep talking about these for a long time. But anything else you guys want to talk about before we kind of wrap this

all. I really appreciate it. I've been a long time, a lurker, listener, a consumer of your content. So I'm glad. Hopefully, hopefully this is informative and helpful for your, for your, you and your team and your, and your listeners. I appreciate your time. Hey, I appreciate it. As I said, I was really excited for Kovas Select when you guys launch it. I'm glad to have you guys on. It's exactly the type of product I want to be talking about, thinking about, and the pitch is exactly the type of thing I love. to have on this podcast. Jake, did you want to say anything?

No, that's it. Just thanks for having us. And yeah, please reach out for something you'd like to talk about. Well, Jake, Kyle said the magic words that he's coming back on, but I'm going to hold you to that too. But really appreciate it. Really appreciate you guys coming on. Again, co-best select. The link will be in the show notes. You can find it pretty easily if you Google. But appreciate you guys. And we'll chat soon. Thanks, Andrew. A quick disclaimer. Nothing on this podcast should

be considered investment advice. Guests or the host may have positions in any of the stocks mentioned during this podcast. Please do your own work and consult a financial advisor. Thanks.