Christian Ryther from Curreen Capital and his investment idea Czech Investment Conference 2019

Micro Focus is a $5B market cap ugly duckling. It is a good business, with excellent management, selling at a very attractive price - but this is obscured because they do things differently. While Micro Focus is a software company, they focus on managing declining software assets. Most software companies want to own products that are growing, preferably rapidly. Micro Focus buys the declining software products that others don't want - and usually gets them for a low price. The company's head, Kevin Loosemore, is an excellent operator and capital allocator. Since becoming CEO in 2011, Loosemore has opportunistically allocated capital on behalf of shareholders. When the stock is cheap, he has repurchased it. When Micro Focus's stock was not cheap, he has used it as currency to acquire businesses that fit its strategy. The company has gone from a debt-free balance sheet to one with $6 per share of debt - and the proceeds of this have been paid out to shareholders. This is akin to an ongoing leveraged recapitalization, except that instead of a private equity fund and its partners benefiting, shareholders have been the beneficiaries. Cash has been paid out through dividends and Return of Value transactions - which have been tax efficient for shareholders, though the accompanying share consolidations have distorted the historical financials. Micro Focus has an unusual business strategy, and unusual capital allocation, which have made it difficult for investors to fully recognise how attractive it is, despite the outstanding (nearly 25% IRR since 2011) returns that it has generated for shareholders. I like the business, am very impressed with the management, and think that the current price (below $14 per share) is extremely attractive.