In this episode of Pitch the PM, Doug welcomes Mark Layton, CFO of Mammoth Energy Services (NASDAQ: TUSK), to explore one of his highest conviction investment ideas and his first of twenty lifetime “Buffett punchcard” investments. This small cap company ($132 MM market cap) is valued below cash levels ($150 MM) with the market giving the company no credit for its existing businesses or underutilized equipment that was recently valued at $145 MM by an independent appraiser. The company recently exited its largest industrial business for $110 MM (more than 3x MOIC), has its land drilling rigs held for sale and subsequent to the recording of this episode sold its frac assets for $15 MM. Mammoth, with the help of its largest shareholder – Wexford, is targeting 25-35% unlevered IRR’s in the aviation rental space where it has a robust pipeline. The company is also incubating its engineering, fiber, and rental equipment businesses. Doug views this as a private equity investment in a public shell without the fees.
