Idea Brunch with Ameya Shinde of Multiples Capital Management
Welcome to Sunday’s Idea Brunch, your interview series with great off-the-beaten-path investors. We are very excited to interview Ameya Shinde!
Ameya is the founder and portfolio manager of Multiples Capital Management LLC, an emerging investment firm that manages capital through Separately Managed Accounts. Ameya has extensive experience in private equity and real estate investments. He holds a bachelor’s degree in computer science and an MBA from New York University. From July 2022 through Q3 2024, Multiples Capital achieved a net return of approximately 72% compared to a 58% return for the S&P 500 over the same period.
Ameya, thanks for doing Sunday’s Idea Brunch! Can you please tell readers a little more about your background and why you decided to launch Multiples Capital?
My background may be unconventional for my field, as I haven’t worked at an investment bank or hedge fund. However, I believe this difference gives me a distinct advantage, allowing me to evaluate investments with an owner/operator mindset.
My journey in equity investing began early, around age 11 or 12 growing up in ‘90s India, when I would read stock prices aloud from the daily newspaper to help my father track his investments. My older brother played a pivotal role in introducing me to the philosophies of Warren Buffett and Peter Lynch, which opened my eyes to the principles of value investing. Investment discussions became a constant fixture in our family, fueling my fascination with the markets.
During the COVID-19 pandemic, I, like many, took time to reevaluate my priorities. Reflecting on Jeff Bezos’s “regret minimization” framework, I decided to align my career with my true passion for equity investing. I initially published a few articles on Seeking Alpha. The encouraging feedback from these articles motivated me to take the next step. I approached close friends with a vision for Multiples Capital, and I’m grateful for the trust they placed in me. Today, thanks to that early support, we continue to grow and pursue our vision.
From your investor letters, I see your portfolio is wide-ranging from Insurance to Shipping to something you refer to as “Stealth AI Plays.” How would you define your strategy and approach to markets and portfolio construction?
I could categorize my stock-picking approach into two main categories:
Macro Trend Investments: Companies or sectors experiencing significant secular trends supported by attractive valuations.
Catalyst-Driven Investments: Often referred to as “Special Situations,” these are investments where specific catalysts or events may unlock value.
Over the past two-plus years, I have maintained a diversified portfolio, adapting to the narrow market breadth we’ve seen. While the S&P 500 has been driven primarily by the “Magnificent 7” stocks, the broader market has grappled with higher inflation and rising interest rates.
My strategy focuses on agility—spotting opportunities in overlooked market segments, such as Shipping and Special Situations while staying invested in sectors like Property & Casualty Insurance and Homebuilders, which are benefiting from cyclical and macroeconomic tailwinds. For example, Homebuilders are capitalizing on the severe housing shortage, with limited competition from existing homes due to high mortgage rates, and Property & Casualty Insurance benefits from higher interest income on their float as well as rising premium rates.
Uncovering Special Situation plays is integral to my investment toolkit, providing stability amidst portfolio volatility. These catalyst-driven investments tend to be insulated from broader market fluctuations, enabling steady cash flow and opportunistic reinvestment. This disciplined approach allows me to recycle capital efficiently and remain poised to capture value in shifting markets.
Can you give readers more insight into the types of special situation plays that you engage in?
Sure, I can give two recent examples.
SharkNinja (NYSE: SN — $14.2 billion), an American consumer products company known for its vacuums and kitchen appliances, became an independent, NYSE-listed company in July 2023 after spinning off from its Chinese parent company, which was listed on the Hong Kong Stock Exchange. Despite $3.7 billion in revenue and a strong track record of growth (20% annual sales growth since 2008, without acquisitions), SharkNinja’s spin-off initially went under the radar due to macro inflation concerns and limited investor interest in a Chinese parent spin-off.
The stock debuted around $30/share, with the company projecting over 15% net income growth for 2023 while trading at a price-to-earnings ratio of about 11. Seeing this as a classic Peter Lynch-style opportunity, I purchased the stock at $33/share. In September 2023, SharkNinja joined the Russell 1000 index, catching investor attention. Revenue growth recently surged to over 30% in the last two quarters, and the stock is now trading around $100/share.
Another example is Talen Energy (NASDAQ: TLN — $10.2 billion), then an OTC Pink Market stock that went through a restructuring and realignment, leaving it focused on its main asset—a nuclear power plant in Pennsylvania. As part of this shift, Talen sold non-core assets, including a data center campus to Amazon Web Services for $650 million, and agreed to supply at least 300MW of power to AWS from its nuclear plant. When I invested, the company had already filed to uplist to a major U.S. exchange and announced plans to repurchase a significant amount of its shares. I got in before the uplisting to NASDAQ, which I saw as a catalyst for the stock to rerate higher, and the buyback signaled strong management alignment with shareholders. The stock has since doubled in under a year, partly also due to the AI-driven energy demand boom in the U.S., making it one of the “Stealth AI Plays” mentioned earlier.