Conventum - Alluvium Global Fund Q2 2026 Performance Review

The note highlights strong relative performance with Alphabet up 24.4% over the quarter, while Copart fell 15.1% over the quarter. It argues Charter trades at an earnings yield and free cash flow yield of >20%, implying the stock is at less than half of the stated valuation—supporting a mildly positive, valuation-driven stance despite the mixed tape.

Analysis

GOOGL looks like the cleaner momentum expression here, but the risk is that the market is paying today for AI optionality that may not fully show up in near-term revenue. The mechanism matters: if search remains resilient while cloud margin expands, the stock can keep rerating; if AI features compress clicks or capex stays elevated, upside slows from multiple expansion to only earnings delivery. In the next 1-3 months, the key is whether ad growth and cloud margins confirm the move, not whether the narrative stays hot.

CPRT weakness is more interesting than the absolute move. This is the kind of name where a lower stock often reflects a slower salvage-volume cycle, softer used-car realizations, or insurance severity normalization rather than a broken franchise; that creates second-order pressure on RBA/IAA and on used-car/repair economics more broadly. If total-loss frequency and auction prices stabilize, the setup can reverse quickly, but if vehicle inflation keeps cooling, fee growth and take rates may stay under pressure for quarters.

Charter is the potential contrarian value leg: a depressed multiple with >20% earnings/FCF yield is usually the market pricing in secular decay, not just a bad quarter. The question is whether broadband churn and leverage keep compressing equity duration, or whether buybacks plus any rate relief can force a rerating. If rates stay high and subs keep eroding, this is a value trap; if free cash flow holds, the upside is mostly multiple-driven over 6-18 months.

Key Decisions for Investors

• Long GOOGL on 3-5% pullbacks; target a 6-12 month hold. Risk/reward improves if Q3/Q4 ad growth and cloud margin confirm the rerating; reduce if capex guidance steps up faster than revenue.
• Pair trade: long CPRT / short RBA for a 1-3 month mean-reversion setup. Thesis is that CPRT’s pullback is overshooting cyclical salvage normalization; invalidation is another quarter of falling auction volume or realized prices.
• Watchlist CHTR as a deep-value catalyst trade, not an outright buy yet. Enter only if FCF stabilizes and management reinforces buyback capacity; abandon if broadband net adds and leverage trends worsen.
• Hedge GOOGL long exposure with short-duration QQQ puts or a partial short in high-multiple internet peers if antitrust or AI-cannibalization headlines intensify.