The Best Ideas I Found in Q2 2025 Investor Letters (Part V)
From the letters of Immersion Investment Partners, Bonsai Partners and Baumann Capital.
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Investment thesis on
Mama’s Creations ( MAMA 0.00%↑ )
Fever-Tree Drinks (FEVR.L)
Wiit (BIT: WIIT)
Mama’s Creations (MAMA) – Immersion Investment Partners
David Polansky and Tim Delaney of Immersion Investment Partners first met MAMA's CEO Adam Michaels in 2022, but came to recognize his vision and ability to build a credible leadership team drawn from major food companies like Mondelez, Tate’s Bake Shop, Gordon Food Service, and Boar’s Head. This leadership credibility is seen as a major competitive advantage in selling into large grocers and club stores where trust and food safety are paramount.
The business itself is straightforward: Mama’s Creations it's a microcap that sells pre-prepared foods—meatballs, chicken, salads, sandwiches, and pasta—into major grocery chains (Walmart, Whole Foods, Publix, Costco) and increasingly into convenience stores. With two manufacturing facilities and a run-rate of about $133M in revenue and $11M in EBITDA, MAMA appears subscale today. But Immersion argues the company has three key levers:
People: a proven team capable of scaling to a billion-dollar business.
Financials: a pristine balance sheet with ~$12M in cash, strong free cash flow, and no debt, positioning MAMA as a logical acquirer in a fragmented $40B prepared foods market.
Organic Growth: most customers carry only 2–3 SKUs today, while mature customers carry 8–10. Simply expanding penetration could more than double sales organically in five years. MAMA is also prioritizing branded products over private label to avoid commoditization and expand margins.
Both David & Tim sees additional upside in convenience stores, citing early success with Sheetz and the broader push by chains to enhance fresh food offerings. Facility expansions in Farmingdale and East Rutherford are doubling production capacity, enabling significant volume growth without heavy new capex. Gross margins, currently in the mid-20s, are expected to reach the mid-30s as mix shifts to higher-margin branded products and scale efficiencies take hold.
Consensus underestimates MAMA’s earnings potential, projecting margins below 30% through 2027. By contrast, Immersion expects gross margins above 32% and EBITDA to scale to ~$50M, implying significant upside from today’s ~$350M enterprise value. Even at a conservative 12x EBITDA multiple (vs. 15–30x for peers), Immersion sees MAMA as a near- $20 stock versus $9.50 today.
Risks include macro shifts in consumer demand, the potential loss of Michaels or senior leadership, or an early sale of the business before the long-term growth plan plays out.
Fever-Tree Drinks (FEVR.L) – Bonsai Partners
Bonsai Partners initiated a position in Fever-Tree (FEVR.L), the global leader in premium mixers, after years of watching from the sidelines due to a rich valuation. Founded in 2005 with the insight that “if three-quarters of your drink is the mixer, mix with the best,” Fever-Tree disrupted a stagnant category dominated by Schweppes’ mass-market products. Its focus on natural, high-quality ingredients resonated with consumers, positioning it as the premium brand of choice for both at-home and on-trade consumption.
For years, FEVR commanded lofty multiples thanks to rapid growth, an asset-light model, and high ROIC. But pandemic-related supply chain disruptions—rising freight, glass, and aluminum costs—compressed gross margins from ~50% in 2020 to 32% by 2023. At the same time, growth slowed, and earnings fell sharply. The stock derated, and Bonsai was able to acquire shares at ~13x normalized trailing earnings, far below the company’s historical average P/E of ~65x.
The investment case hinges on two pillars: brand and distribution. Fever-Tree is the leading premium mixer brand worldwide, with broad recognition and shelf space, and it recently secured a transformational partnership in the U.S. with Molson Coors. Under the deal, Molson Coors handles manufacturing, distribution, marketing, and sales in the U.S., while FEVR earns a royalty-like profit share. Importantly, Molson Coors guaranteed minimum royalty payments through 2030—covering about 90% of Fever-Tree’s projected earnings in the U.S. through 2028. This gives Fever-Tree rare earnings visibility and ensures a baseline of profit growth.
The Molson Coors partnership also resolves the company’s margin issues. Historically, most U.S. products were manufactured in Europe and shipped across the Atlantic, leaving Fever-Tree highly exposed to freight and packaging costs. By moving production to Molson Coors, those costs are eliminated, and the business model reverts to near-20% EBITDA margins while requiring virtually no working capital investment. In essence, Fever-Tree gains higher returns on capital and a stronger growth platform in its largest market.
Beyond the U.S., FEVR continues to expand internationally, benefiting from premiumization in spirits, consumer demand for higher-quality mixers, and increasing relevance in non-alcoholic drinks and mocktails. The brand’s alignment with both consumer and distributor economics (higher profits per sale and per case) reinforces its positioning.
Key risk: long-term demographic shifts in alcohol consumption. Declining alcohol use could affect the terminal value of the brand. However, Fever-Tree’s resilience in non-alcoholic segments and the medium-term growth visibility provided by Molson Coors’ guarantees mitigate this concern.
At Bonsai’s entry price, FEVR traded at a mid-to-high single-digit multiple of EBITDA, compared to a historical average near 40x. With EBITDA likely to double over the next three years and much of that growth already “locked in” by contractual guarantees, Andrew sees the risk/reward as highly favorable.
Wiit (BIT: WIIT) – Baumann Capital
Baumann Capital introduced a new position in WIIT, a Milan-listed company founded in 1996 that has become Europe’s only pure-play specialist in sovereign private cloud solutions.
WIIT operates 20 Tier IV-certified data centers across Germany, Italy, and Switzerland, focused exclusively on mission-critical workloads such as ERP systems for banks, hospitals, law firms, and pharmaceutical companies. Its entire model is built around European data sovereignty, with no legal or operational ties to the U.S. or Asia. For highly regulated industries that cannot risk hosting their most sensitive data with hyperscalers like AWS or Azure, WIIT provides a trusted alternative.
The company’s business model is highly sticky and defensive. Average contracts span 5–9 years with auto-renewals, inflation protection, and high switching costs. Customers often double their spend over time, growing from 2–3 items to 8–10. Revenues are recurring, margins are robust (40% EBITDA), and WIIT enjoys pricing power at roughly double standard private cloud rates. This positioning has made it the premium option for clients like Prada and Armani. Scale advantages, long-term relationships, and steep early termination costs further entrench customers.
Growth comes from two main vectors: steady organic expansion as more European SMEs adopt hybrid cloud setups (only 38% penetration so far), and bolt-on M&A in a fragmented European market. With strong cash generation and accretive acquisitions since its 2017 IPO, WIIT is rolling up the industry while fully integrating targets and realizing synergies. The EU’s increasing focus on digital sovereignty is another tailwind, as regulators and customers alike push for alternatives to U.S.-controlled cloud providers.
The competitive moat is multilayered. Beyond infrastructure, WIIT offers the full stack—Infrastructure (IaaS), Platform (PaaS), and Software-as-a-Service (SaaS)—providing integration, managed services, and compliance expertise that rivals cannot easily replicate. The firm’s brand as “The Premium Cloud” in Europe, coupled with Tier IV certifications and operational excellence, is difficult for newcomers to match. Importantly, management—led by founder and majority shareholder Alessandro Cozzi—acts like owners, with a disciplined acquisition playbook that grows scale and margins rather than empire size.
Baumann also points to optional upside from AI adoption. Mission-critical ERP systems are typically the last to adopt new technologies, but when AI workloads eventually migrate to private, sovereign cloud infrastructure, WIIT will be a natural beneficiary. Its positioning at the heart of Europe’s most sensitive IT workloads ensures it will capture demand for secure, compliant AI hosting as the sector matures.
In sum, Baumann sees WIIT as a multi-billion-euro opportunity: a premium, sticky, and defensive business with long-term structural tailwinds, high-margin recurring revenues, and a credible M&A-driven growth strategy. They view it as Europe’s leading contender to consolidate the sovereign private cloud niche and a durable compounder in the data center and infrastructure space.