Investment management company Vulcan Value Partners recently released its fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. All the strategies of Vulcan Value Partners delivered positive results in the year. The Large Cap Composite (Net) returned -1.5% in Q4 and 7.9% YTD, the Small Cap Composite (Net) gained 3.2% in Q4 and 9.5% YTD, The Focus Composite (Net) retuned 0.1% in Q4 and 7.1% YTD, Focus Plus Composite (Net) returned 0.1% in Q4 and 6.2% YTD and the All-Cap Composite ...

Core Viewpoint - The investment strategies have shown positive returns for the year, with a focus on long-term performance over short-term results [2][5]. Performance Summary - Large Cap Composite (Gross) returned -1.4% QTD, 8.5% YTD, and 10.4% annualized since inception [3][22]. - Small Cap Composite (Gross) returned 3.4% QTD, 10.3% YTD, and 8.3% annualized since inception [3][31]. - Focus Composite (Gross) returned 0.2% QTD, 7.5% YTD, and 14.3% annualized since inception [3][36]. - All Cap Composite (Gross) returned 1.5% QTD, 11.5% YTD, and 11.1% annualized since inception [3][53]. Market Environment - The current market resembles the late 1990s, with concerns about overvaluation and a focus on AI-related stocks [5][6][7]. - AI is seen as a transformative technology, similar to the Internet, but caution is advised regarding valuations [7][9]. Investment Strategy - The company emphasizes buying only those companies with stable values, often waiting for them to become discounted enough for investment [10][12]. - The portfolio has shifted towards more healthcare and insurance-related businesses, with a focus on smaller companies outside the top 10 largest market capitalizations [11][12]. Notable Holdings - Medpace (MEDP) has shown significant growth, with a stock price increase of over 73% for the year, driven by strong free cash flow and share repurchases [13][14]. - Ryan Specialty Holdings Inc. is highlighted for its robust growth and stable margins, despite facing a short-term pricing cycle [24][25][38]. - TransUnion is recognized for its strong operating margins and successful diversification beyond credit reports [26][38]. Performance Contributors and Detractors - Alphabet Inc. and Salesforce Inc. were significant contributors to performance, while CoStar Group and Microsoft Corporation were notable detractors [37][46]. - Fiserv Inc. was a material detractor due to downward guidance and strategic shifts in its business model [30][46]. Market Trends - The small-cap sector has lagged behind large-cap returns, presenting potential opportunities for investment as it is often overlooked [15]. - The dominance of large-cap stocks in market returns continues, with the top 10 S&P 500 stocks accounting for over 50% of its return in 2025 [16].

Core Viewpoint - Ituran (ITRN) is positioned as a leader in the connected car technology sector in Israel and Latin America, with a strong reliance on high-profit subscription revenue, suggesting that the market may undervalue its potential [1] Company Analysis - Ituran has over 15 years of experience in the market, focusing on providing a clear and disciplined breakdown of its business performance [1] - The company’s business model is heavily dependent on steady subscription revenue, which is a key driver of its profitability [1] Market Position - The market perception of Ituran may not fully reflect its strengths and growth potential in the connected car technology space [1]

Core Insights - Noble Mineral Exploration Inc. has acquired a rare earth element (REE) enriched system on its Chapiteau Property, located 100 kilometers south of the Strange Lake and B-Zone deposits, and 38 kilometers northeast of the Crater Lake Scandium-Rare Earth resource [1][16]. Acquisition Details - The Chapiteau Property consists of 25 map staked units covering approximately 647 hectares [1]. - The property was previously explored by Midland Exploration Inc. in 2010/2011, which conducted a 3,143-line-kilometer airborne magnetic and radiometric survey identifying several new REE exploration targets [4]. Mineralization Findings - Selected samples from 81 rock outcrops and mineralized boulders returned high values of up to 8.34% total rare earth element oxides (TREOs), including yttrium [4]. - Heavy rare earth element oxides (HREOs) in samples ranged from 2.29% to 12.85% for those containing more than 0.5% TREO [4]. - Significant individual REE results included up to 8.22% cerium oxide (Ce2O3), 3.38% lanthanum oxide (La2O3), and 3.39% neodymium oxide (Nd2O3) [4]. Geological Context - The best concentrations of mineralization are associated with iron oxides in pegmatite-aplite dikes and iron oxide clusters in an alkaline granite intrusion, which is identified as a 9-kilometer diameter airborne magnetic anomaly [5]. - Recent grab samples from the property returned TREO values ranging from 1.40% to 3.02% [6]. Previous Exploration Activities - A series of channel samples and one diamond drill hole (Y3-11-04) were completed on the Chapiteau property in 2011, with drill hole Y3-11-04 intersecting a grey-pink coarse-grained alkaline granite [9]. - The best assay results from the drill hole returned 0.13% TREO + Y2O3 over 7.5 meters and 0.14% TREO + Y2O3 over 12.0 meters [10]. Strategic Importance - The acquisition of the Chapiteau Property underscores Noble's commitment to exploring critical minerals in Canada, aligning with the growing demand for REEs in various industries [16].

Company Overview - Ituran Location and Control Ltd. (ITRN) is an Israel-based technology company that has completed three decades of existence this year [1] Product Offering - The company offers a range of hardware and software solutions with a keen expertise in the field [1]

Core Insights - Ituran Location and Control Ltd. (NASDAQ: ITRN) is a prominent provider of telematics and connected-car products, expanding its market presence through OEM partnerships and the launch of IturanMOB in the U.S. [1] Financial Performance - For Q3 2025, ITRN reported an earnings per share (EPS) of $0.74, exceeding the estimated EPS of $0.68, indicating effective operational management [2][6] - The company's revenue reached $92.28 million, surpassing the forecast of $86.52 million, driven by innovative telematics solutions and strategic partnerships [2][6] - The addition of 40,000 net new subscribers contributed to the record revenue, showcasing the company's commitment to delivering advanced telematics services [3] Financial Metrics - ITRN has a price-to-earnings (P/E) ratio of approximately 13.14, suggesting a reasonable market valuation of its earnings [4] - The price-to-sales ratio is about 2.15, and the enterprise value to sales ratio is around 1.90, indicating positive market valuation of the company's sales [4] - The enterprise value to operating cash flow ratio stands at 8.31, reflecting how the company's cash flow is valued in relation to its enterprise value [4] Financial Health - The company maintains a low debt-to-equity ratio of 0.03, indicating a conservative approach to leveraging debt [5][6] - A current ratio of 2.25 suggests strong liquidity, ensuring the company can cover its short-term liabilities [5] - With an earnings yield of approximately 7.61%, ITRN presents a solid return on investment, making it an attractive option for investors [5][6]

Financial Data and Key Metrics Changes - Third quarter revenues were $92.3 million, an 11% increase compared to $83.5 million in Q3 of the previous year [10] - Subscription fees were $67.6 million, up 13% year-over-year, representing 73% of total revenues [10] - Net income for the third quarter was $14.6 million, or diluted earnings per share of $0.74, an increase of 7% compared to $13.7 million, or diluted earnings per share of $0.69 in the same quarter last year [11] - EBITDA was $24.6 million, 26.7% of revenues, up 6% year-over-year [10] Business Line Data and Key Metrics Changes - The subscriber base reached 2,588,000 at quarter end, an increase of 40,000 in the quarter, with a year-over-year growth of 219,000 [10] - Product revenues were $24.7 million, up 4% year-over-year [10] Market Data and Key Metrics Changes - Geographic breakdown of revenues in Q3: Israel 55%, Brazil 23%, rest of the world 22% [10] - Strong demand for location-based products and telematics services in all regions, particularly in Israel due to high car theft rates [4][5] Company Strategy and Development Direction - The company is focused on expanding its subscriber base and introducing new products and services, including the IturanMob smart mobility platform [5][9] - Plans to scale into high-growth motorcycle markets through partnerships with local OEMs, starting with Brazil [5][29] - The company aims to explore M&A opportunities for expansion into other geographies, particularly in Europe [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting subscriber growth guidance of 220,000 to 240,000 for 2025, which would be the highest in the company's history [21] - The company is optimistic about the U.S. market for IturanMob, targeting small to medium rental companies [14][18] - Management noted that the operating expenses increase was primarily due to foreign exchange effects, but margins are expected to improve with subscriber growth [19][21] Other Important Information - The company generated $21.3 million in operating cash flow during the quarter and declared a dividend of $10 million [7][11] - The dividend policy was increased by 25% at the end of the previous year, reflecting strong profitability and cash generation [8] Q&A Session Summary Question: Can you provide more details on the U.S. launch and target market? - Management indicated that the focus is on small to medium rental companies, which represent a significant portion of the market, and highlighted the demand for cost-saving solutions [14][15] Question: What is driving the increase in operating expenses this quarter? - The increase in operating expenses was primarily attributed to foreign exchange effects, with expectations for margin expansion as subscriber numbers grow [19] Question: How is subscriber momentum performing against original guidance? - Management confirmed that they are on track to meet subscriber growth guidance, with contributions from various regions and initiatives [21] Question: Can you discuss the motorcycle market and partnerships? - Management emphasized the importance of the motorcycle market in South America and the partnership with BMW Motorrad, expecting significant subscriber growth starting in 2026 [29][30] Question: Are there concerns about manufacturers developing their own telematics systems? - Management reassured that Ituran's strength lies in its service-oriented model and strong market presence, which mitigates risks from potential disintermediation [51][52] Question: Update on efforts in India? - Management mentioned a joint venture in India with a focus on commercial vehicles, noting the market's slow growth but long-term potential [55]

Financial Data and Key Metrics Changes - Third quarter revenues were $92.3 million, an 11% increase compared to $83.5 million in Q3 of the previous year [10] - Subscription fees were $67.6 million, up 13% year over year, representing 73% of total revenues [10] - Net income for the third quarter was $14.6 million, or diluted earnings per share of $0.74, an increase of 7% compared to $13.7 million, or diluted earnings per share of $0.69 in the same quarter last year [11] - EBITDA was $24.6 million, 26.7% of revenues, up 6% year over year [10] Business Line Data and Key Metrics Changes - The subscriber base reached 2,588,000 at quarter end, an increase of 40,000 in the quarter, with a year-over-year growth of 219,000 [10] - Product revenues were $24.7 million, up 4% year over year [10] Market Data and Key Metrics Changes - Geographic breakdown of revenues in Q3: Israel 55%, Brazil 23%, rest of world 22% [10] - Strong demand for location-based products and telematics services in all regions, particularly in Israel due to high car theft rates [4][5] Company Strategy and Development Direction - The company is focused on expanding its subscriber base and introducing new products and services, including the Ituran Mob smart mobility platform [5][9] - Plans to scale into high-growth motorcycle markets through partnerships with local OEMs, starting with Brazil [5][29] - The company aims to explore M&A opportunities for expansion into other geographies, particularly in Europe [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting subscriber growth guidance of 220,000 to 240,000 for 2025, which would be the highest in the company's history [21] - The company is optimistic about the U.S. market potential for Ituran Mob, targeting small to medium rental companies [14][18] - Management noted that the ongoing strong profitability and cash generation support the declared dividend of $10 million for the quarter [11][8] Other Important Information - The company generated $21.3 million in operating cash flow during the quarter [7] - A dividend of $10 million was declared, reflecting a 25% increase from the previous policy [8] Q&A Session Summary Question: Can you provide more details on the U.S. launch and target market? - Management indicated that the focus is on small to medium rental companies, which represent a significant portion of the market, and highlighted the strong demand for cost-saving solutions [14][15] Question: What is driving the increase in operating expenses this quarter? - The increase in operating expenses was primarily attributed to foreign exchange effects [19] Question: How is subscriber momentum performing against original guidance? - Management confirmed that they are on track to meet the subscriber growth guidance, with contributions from various regions and initiatives [21] Question: Can you discuss the motorcycle market and partnerships? - Management emphasized the importance of the motorcycle market in Latin America and the recent partnership with BMW Motorrad to tap into this opportunity [28][29] Question: Are there concerns about manufacturers developing their own telematics systems? - Management reassured that Ituran's strength lies in its service-oriented model and strong market presence, which mitigates the risk of disintermediation [51][52] Question: Update on efforts in India? - Management mentioned a joint venture in India with a focus on commercial cars, noting that the market is still developing and requires specific deals to be profitable [55]

Financial Data and Key Metrics Changes - Third quarter revenues were $92.3 million, an 11% increase compared to $83.5 million in Q3 of the previous year [9] - Subscription fees were $67.6 million, up 13% year over year, representing 73% of total revenues [9] - Net income for the third quarter was $14.6 million, or diluted earnings per share of $0.74, an increase of 7% compared to $13.7 million, or diluted earnings per share of $0.69 in the same quarter last year [10] - EBITDA was $24.6 million, 26.7% of revenues, up 6% year over year [9] Business Line Data and Key Metrics Changes - The subscriber base reached 2,588,000 at quarter end, an increase of 40,000 in the quarter, with a year-over-year growth of 219,000 [10] - The geographic breakdown of revenues showed Israel at 55%, Brazil at 23%, and the rest of the world at 22% [9] Market Data and Key Metrics Changes - The company added 40,000 net subscribers in the third quarter, with expectations to add between 220,000 and 240,000 net new subscribers in 2025 [4][10] - Strong demand for location-based products and telematics services was noted in all regions, particularly in Israel due to high car theft rates [4] Company Strategy and Development Direction - The company is expanding its product offerings, including the Ituran Mob smart mobility platform, which is being introduced to the U.S. market [6][8] - The focus remains on partnerships with OEMs and expanding into new markets, particularly in Latin America and the U.S. [5][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting subscriber growth targets, citing strong demand across all regions and segments [21][22] - The company is optimistic about the long-term growth potential in the U.S. market, particularly among small to medium rental companies [15][19] Other Important Information - The company declared a dividend of $10 million for the quarter, reflecting continued profitability and strong cash generation [10] - A share buyback program was also noted, with $1.5 million purchased during the quarter and $5.2 million remaining available [10][7] Q&A Session Summary Question: Can you provide more details on the U.S. launch and target market? - Management indicated that the focus is on small to medium rental companies, which represent a significant portion of the market, and highlighted the strong demand for cost-saving solutions [15][16] Question: What is driving the increase in operating expenses this quarter? - The increase in operating expenses was primarily attributed to foreign exchange effects, with expectations for margin expansion as subscriber growth continues [20] Question: How is subscriber momentum performing against original guidance? - Management confirmed that they are on track to meet their guidance of 220,000-240,000 new subscribers, with strong contributions from various regions and segments [21][22] Question: Can you discuss the motorcycle market and partnerships? - The company is seeing strong traction in the motorcycle market in South America, particularly through partnerships with brands like BMW Motorrad, and expects significant subscriber growth starting in 2026 [29][30] Question: Are there concerns about manufacturers developing their own telematics systems? - Management emphasized that Ituran's strength lies in its service-oriented model and strong market presence, which mitigates the risk of disintermediation by manufacturers [47][48] Question: Update on efforts in India? - The company has a joint venture in India and signed a contract with Mercedes-Benz, but noted that the market is still developing and requires specific deals to be profitable [51]

Group 1 - Ituran Location and Control Ltd. announced a cash dividend distribution of $0.50 per share [1] - The total amount of the dividend distribution is approximately $10 million [1]