Title: AIA Newsletter July 2026 — Why I Admire Cannibals Show: Actionable Intelligence Alert (AIA) (Substack) — Monthly newsletter, paid Guest: John Polomny (Actionable Intelligence Alert / AIA) Date: 2026-JUL-02 URL: https://actionablenews.substack.com/p/aia-newsletter-july-2026 Length: written post (no timestamps) Note: Monthly AIA issue. New Portfolio addition: Aimia (AIM.TO). Selling Seabridge Gold (SEA.T). Consumer-staple income names bought for covered-call/cash-secured-put writing (CPB, GIS, CAG, CLX). Body reproduced for personal study.
Commentary
Portfolio returns for Q2 2026: The AIA Portfolio was up +7.73% versus +14.05% for the S&P 500. The AIA Dividend Portfolio was down -5.83% versus +14.05% for the S&P 500. Although the Dividend Portfolio was down for Q2, both portfolios are still ahead of the S&P for the year.
One of the things I have been doing recently to generate cash is buying shares of several consumer-staple companies. Things like Campbell Soup (CPB), General Mills (GIS), ConAgra (CAG), and Clorox (CLX). These stocks are bombed out and out of favor. Many of them are decent dividend payers. I have also been writing covered calls and cash-secured covered puts on these types of stocks. I am doing it in a tax-deferred account, creating a snowball effect. They are not that volatile, and I am keeping to shorter expirations. Rinse and repeat as the cash pile grows. I am not doing this in the AIA Portfolio because it is not within its mandate, which is focused on asymmetric upside.
Investing in Cannibals
Not actual cannibals, but companies that consistently buy back their own shares. One historical example is Teledyne and its legendary chairman, Henry Singleton. Singleton was an engineer and mathematician, trained at MIT, who co-founded Teledyne with George Kozmetsky in 1960. He quickly realized the real opportunity lay not in building a single operating business but in building a machine for compounding capital.
In the 1960s, Teledyne became a classic conglomerate but with far more discipline than most of that era. The market loved "growth" conglomerates, and Teledyne's stock became highly valued. Singleton used that expensive stock as currency, issuing shares to buy smaller companies at much lower earnings multiples — trading overvalued paper for real operating businesses. By the late 1960s Teledyne had acquired roughly 130 companies. The key point is he was arbitraging valuation: when Teledyne traded at 40x-70x earnings he issued stock; when targets could be bought at lower multiples the deals were accretive. When the conglomerate boom ended, he stopped. He changed when the facts changed.
Then came the part that made Singleton a legend. In the 1970s bear market, Teledyne's stock collapsed and its P/E fell below 10. Singleton concluded that the best acquisition available was Teledyne itself. Starting in 1972 he began large stock buybacks. From 1972 to 1984, Teledyne completed eight common-stock tender offers and one preferred-stock tender offer; more than 85% of the common shares were retired, and including open-market purchases the total repurchase reached more than 90% of shares. He was shrinking the share count while the underlying businesses continued to generate cash. That caused earnings per share to explode.
Singleton's philosophy was rational capital allocation. He cared less about reported quarterly earnings and more about cash flow, return on capital, and per-share value. One study says an investor who bought Teledyne in 1966 earned a 17.9% annual return over the next 25 years, turning $1 into about $53, versus roughly 6.7x for the S&P 500. The best results came during the buyback phase: shareholders who held from the first 1972 buyback gained about 3,000% by 1983. He used an overvalued stock to buy businesses, then used business cash flow and debt to buy back undervalued stock. He sought per-share value, not growth for its own sake.
The reason I have related the Teledyne story is that this month's Portfolio addition might be in a similar situation, with a manager that understands capital allocation and the power of buying back one's own stock.
Portfolio Changes — Aimia (AIM.TO)
I am quite familiar with Aimia, as I owned it many years ago when its primary business was administering the Air Canada frequent-flyer program. In 2019 Aimia sold the Air Canada loyalty business back to Air Canada, receiving cash consideration of approximately CAD $450 million. The sale turned Aimia into a cash-rich shell with no core operating business, prompting a pivot to an investment holding company. As with many companies that come into a huge cash windfall, management made a series of bad investments — the specialty chemicals business Bozzetto, synthetic-rope manufacturer Cortland, stakes in Clear Media, Kognitiv, TRADE X, and others. Not a good capital allocation record.
Enter Mithaq Capital, a Saudi-based family office. After accumulating a large stake, Mithaq launched a proxy fight at the 2023 annual meeting, ousting the chairman. In October 2023 Mithaq launched a takeover bid at $3.66/share, leading to defensive actions and lawsuits. After about a year, things were settled: Mithaq obtained board representation and Aimia's focus became disciplined, value-oriented capital allocation.
Rhys Simmerton, a modern-day Henry Singleton. Mr. Summerton is a South African national with a record of turning companies around. He is the founder and principal shareholder of Milkwood Capital, a UK-based "valuation-driven asset manager with activist capabilities." Summerton joined Aimia's board on January 28, 2025, and was appointed Executive Chairman. Per the 2026 AGM report, insiders and the board control roughly 42.6% of the shares: 12% held by Milkwood and 30% by Mithaq.
The Plan: On February 9, 2026, Aimia announced the sale of Bozzetto (94% interest), closing May 29, 2026. In conjunction, management announced a tender for its 9.75% senior unsecured notes with a face value of $142 million. On 6/2/26 the company announced it had repurchased $131 million of these notes, saving $45 million in future interest. Competent management comes in, stops the stupid pet tricks of the previous management, sells underperforming assets, pays down debt, and begins a stock buyback program. With the divestiture and debt paydown, the company is now a permanent capital vehicle with strong insider ownership incentivized to grow book value while closing the NAV gap. Share price $2.88 versus book value of $3.66. The company has $150 million CAD in cash, a remaining business (Cortland — synthetic marine ropes, nettings, lines), and $1 billion in tax-loss carryforwards to offset earnings.
The bet is on the jockey, Rhys Simmerton. He has done this before. An example is Argent International (Johannesburg Stock Exchange), transformed from a low-return domestic steel trader into a globally diversified, cash-generative, debt-free industrial group that retired roughly 43% of its share count and compounded EPS at around 30% per year. Milkwood looks for firms with cash on the balance sheet and the ability to create more, used for buybacks, acquisitions and other ways to lift value; they avoid firms with heavy debt. This is a long-term investment; I expect the thesis to play out over several years. I am adding Aimia (AIM.T) to the AIA Portfolio.
Company Updates — AIA Portfolio
Abacus Global Management (ABX) — No major news this month. Banco Bradesco (BBD) — No major news this month. Chile ETF (ECH) — No major news, but Latin American politics is swinging from left to right. Pro-market reforms will not hurt things. Georgia Capital PLC (CGEO.L) — GCAP to fully redeem its outstanding local bonds and extend the buyback program. The Board approved early redemption in full of the US$50 million sustainability-linked local bonds, and an extension of its US$50 million buyback and cancellation programme by an additional US$10 million. Together these complete GCAP's GEL 700 million capital return programme ahead of schedule. The company continues to cannibalize its own shares, putting upside pressure on the stock price. Global Atomic (GLO.T) — No major news this month. Gulf Marine Services (GMS.L) — The final idle vessel is back to work in the Persian Gulf. Hoping we can begin share buybacks sometime this year. Hong Kong Exchange and Clearing (HKXCY) — The Hang Seng Index is down 13% so far in 2026, weighing on the exchange's price. Nothing wrong with the business — a great franchise, and at some point I will look to add to my position. Ivanhoe Mines (IVN.T) (IVPAF) — Kipushi Mine produced a record 25,677 tonnes of zinc in May (concentrators milled a record 72,003 tonnes of ore at 93% recovery, 36.2% zinc feed grade). YTD zinc production totals approximately 110,000 tonnes, roughly the mid-point of 2026 guidance (240,000-290,000 tonnes). A top-ten zinc mine in the world that gets ignored when discussing Ivanhoe. Invesco DB Agriculture Fund (DBA) — No major news this month. Liquidia (LQDA) — The stock continues to grind higher even as we await the 327 decision. I continue to hold; I believe the decision will be positive for LQDA. After the legal issues clear up, I expect a takeover offer and a stock price over $100/share. Major Drilling (MDI) — Reported fiscal Q4 2026 results. Metal prices have pulled back recently, but mining companies have not been spending on exploration until recently. Forward guidance is ramping sharply, which should translate into additional revenue. Paladin Energy (PDN.T) (PDN.A) — No major news this month. Patagonia Gold (PDGC) (HGLD) — Insiders own ~65% of the shares and are not motivated to report every zig and zag. The heap leach is in operation and at some point they will report production, cost, and cash flow. The gold price is weak and news flow is light, so tourists sell and move on. PetroTal (PTAL.L) (PTALF) — No major news this month. Saipem (SPM.BSI) — Signed a binding sale and purchase agreement with ADES Saudi Limited Company for the divestment of its Shallow Water Drilling activities in Saudi Arabia (three owned jack-up rigs plus two leased). In FY2025 that unit recorded revenues of ~USD 170 million. The transaction value is USD 285 million on a debt-free/cash-free basis, paid in cash at closing. Sprott Lithium Miners ETF (LITP) — No major news this month. Sprott Uranium Miners Trust (U.U.T) — Yes, we are still in a bull market. Uranium bull market intact. Seabridge Gold (SEA.T) — Seabridge announced closing of the spin-out of Valor Gold Corp. (Courageous Lake gold project transferred to Valor; each Old Seabridge share exchanged for one new Seabridge share plus one Valor share per ~1.957 Seabridge shares held). The spinout came just as the gold market was in a correction, and many Seabridge holders just sold the stub. For the AIA Portfolio and my personal portfolio, I am selling this and will not follow it. I am not interested in exploration plays in the Northwest Territories; the company's own timeline shows production in Q4 2032. Seems too hard for me. Pass. Technip FMC (FTI) — No major news this month. Tidewater (TDW) — No major news this month. Uzbekistan Investment Fund (UZNF) — No major news this month.
Company Updates — Dividend Portfolio
Amerigo Resources (ARG.T) — No major news this month. Hawaiian Electric (HE) — No major news this month. iShares Emerging Market Dividend Fund (DVYE) — No major news this month. Odfjell Drilling (ODFJF) — No major news this month. Presidio Production Co. (FTW) — No major news this month. Swire Properties (SWPFF) — No major news this month. Thungela Resources (TNGRF) — No major news this month.
That's it for this month. John Polomny