The stock was beaten down about 27% earlier this year on short-seller attacks and redemption worries, yet about 7.4% of shares remain sold short. Since end-June the name has quietly rallied almost 20%. Expectations for H1 are already low (management guided performance fees down), and if the numbers surprise positively, forced covering could produce a short squeeze observers say might add over 10% on the day. On top: buyback speculation, a likely dividend increase to CHF 47 (about 6.2% yield), and a valuation of about 16x 2027 earnings versus a ten-year average of about 26x.
We normally don't speculate around earnings. Our model is long-term investing. That's exactly why this works. We already hold PGHN for the long haul, the fundamentals are intact and the valuation is depressed, so adding here is a long-term decision first. The potential short squeeze is essentially a free option on top. Depressed valuation, crowded short book, solid business. That's the asymmetry we like.
Position doubled. Now we wait.