A company everyone shelved as a dying content delivery business now makes more than half its revenue from security and cloud computing, growing at double digits, and it reports August 6 alongside two more mispriced names in compliance software and health insurance.

Read on before the print forces the market to update a file it has not touched in years.

Asset Management

Patria Investments Limited (NASDAQ: PAX) trades near $10.92 after reporting another quarter of rapid expansion. Fee-related earnings rose 24% year over year to $57.1 million, while distributable earnings increased 31% to $0.32 per share.

Fee-earning assets under management climbed 32% to $48.9 billion. Patria also raised $2.3 billion during the quarter, bringing first-half fundraising to $4.5 billion and keeping the firm on track to exceed its full-year target.

Management maintained fee-related earnings guidance of $1.42 to $1.54 per share. You are paying roughly 7.1 to 7.7 times that range for a growing alternative asset manager near the bottom of its 52-week range.

Fundraising Gives the Discount More Weight

Fee-paying assets grew faster than the share price, while permanent capital reached $11 billion and now represents 22% of the total. Stronger recurring management fees give your valuation case more stability than unpredictable asset-sale profits.

The 6% Yield Still Comes With Exit Risk

Patria declared another $0.1625 quarterly dividend, producing an annualized yield near 6% at the current price. You still face uneven performance fees, currency swings, acquisition integration, and weak private-market exits, but the low multiple means the stock does not require perfect execution to rerate.

Diversified Holdings

Cannae Holdings Inc. (NYSE: CNNE) trades near $14.36 after selling its 49.1% interest in The Watkins Company to KDSA Investment Partners. Cannae invested $80 million in the flavoring business in October 2024, and the exit produced about 1.2 times invested capital and an internal rate of return near 10% after sale proceeds, preferred dividends, and fees.

The return is not spectacular, but the transaction converts another private holding into cash and removes a non-core asset from the portfolio. Cannae plans to focus more heavily on sports and entertainment investments while using available capital for new deals or shareholder returns.

Cannae’s May sum-of-the-parts report placed illustrative net asset value at $24.15 per share. At today’s price, you are buying the stock roughly 41% below that estimate, while the $0.15 quarterly dividend adds a yield near 4.2%.

The Sale Makes the Discount Harder to Defend

Watkins carried an illustrative NAV of $1.83 per share in May. Turning the position into cash gives your valuation case a real transaction rather than another private-company estimate, even though the exact proceeds were not disclosed.

Private Marks Can Keep the Gap Open

The $24.15 figure is not a liquidation value or price target, and several holdings still rely on private marks or cost. You still need disciplined buybacks, cleaner portfolio exits, and tighter corporate expenses before the discount deserves to close.

Mortgage REIT

Arbor Realty Trust Inc. (NYSE: ABR) trades near $4.77 after revealing one of the quarter’s most aggressive capital moves. The mortgage REIT repurchased $114.3 million of stock at $5.42 per share, then bought another $20.8 million at $5.85.

Both purchases were completed near half of book value. Together, they retired roughly 24.6 million shares, close to 13% of the June share count, while Arbor also redeemed $270 million of senior notes.

The first repurchase price implies book value near $11.06 per share. You are now paying roughly 57% below that level and even less than Arbor paid for its own stock.

The Buyback Is Large Enough to Matter

Retiring shares at half of book can lift book value for the remaining owners, provided the balance sheet holds. Arbor also generated about $500 million in liquidity, giving your discount case real capital behind it rather than another management promise.

The Dividend Is Flashing a Warning

Arbor posted a $37.3 million GAAP loss and only $0.10 in distributable earnings, or $0.15 after removing legacy-asset losses. Both figures fell below the $0.17 dividend, while loan-loss provisions and nonperforming assets remained heavy. 

You are getting a 14% annualized yield and a huge book-value gap, but credit deterioration can erase the buyback benefit quickly.

Akamai Technologies (NASDAQ: AKAM)

Akamai is the name everyone mentally filed under “dying content delivery network” about five years ago and never reopened. Security and cloud computing now make up over half of revenue and both are growing double digits, which is a completely different business than the one the multiple reflects.

Q2 earnings land August 6 with consensus around $1.61 per share, and the specific thing to watch is whether security growth accelerates while margins hold. If it does, you get a genuine re-rating from declining CDN to mid-cap security compounder, and that gap is wide. The risk is that CDN erosion accelerates faster than security can offset it, which would keep the blended growth rate pinned down regardless of segment performance.

Arrow Electronics (NYSE: ARW)

Arrow is an electronics distributor that got absolutely wrecked through the 2024 and 2025 semiconductor inventory correction, and it trades at a mid-single-digit P/E on trough earnings as a result. Channel checks are finally showing restocking activity, and analyst estimates have been ticking higher over recent weeks while the stock has barely moved, which is exactly the pattern that shows up right before deep cyclicals turn.

Q2 earnings arrive August 6, and the number that matters is book-to-bill, specifically whether it clears 1.0. If management sounds even mildly constructive on the second half, this reprices quickly. The risk is that the restocking signal is a false start and inventory digestion drags into 2027.

EPAM Systems (NYSE: EPAM)

EPAM has been kicked around for two years on the Ukraine exposure story, and the market largely stopped updating its view even as the situation changed. The talent base has been rebuilt across other geographies, generative AI implementation work is now a real revenue line rather than a pitch deck slide, and enterprise clients are budgeting for projects again.

Estimates for the August 6 print have been creeping higher, and at roughly 18x forward earnings you are paying a discount to IT services peers for a business growing faster off a lower base. The risk is that AI implementation demand proves lumpier than expected and the recovery in discretionary client spending stalls before it shows up in bookings.

That's our coverage for today; thanks for reading! Reply to this email with feedback or any stocks you want me to check out.

Best Regards,
—Noah Zelvis
Undervalued Edge