Portfolio Q1 2026 + D-Box
Portfolio update as of March 27th 2026 plus micro-cap D-Box
The following table shows the top portfolio holdings. I included the industry it is operating in, the current price, the price at the closing of December 2025, the YTD performance, the initial year of acquisition and related trades.
Legal Disclaimer: All content published on Wintergems is intended for informational and entertainment purposes only. It is not intended to serve as a recommendation to buy or sell any security. The views expressed are my own and are subject to change without notice. The information provided here is proprietary. I make no representations or warranties as to the accuracy or completeness of the information provided and will not be liable for any losses, injuries, or damages from the display or use of this information. Readers are solely responsible for their own investment decisions.
As we are closing the first quarter, we can safely say that we had quite a difficult quarter where 9 stocks or 56% of the positions were down.
The high volatility has allowed me to enter (or re-enter) in 6 positions:
Robertet (Re-enter)
ARM
Agnico Eagle
Fico
Pernod Ricard (Re-enter)
I encourage you to ask any questions related to one of these positions or existing one in the comment below. This is the fun part for me:
Country Split
Below is the country split of the top positions now and at the start of 2025 and 2024:
The country split of the top positions is more diversified than ever. It was not the case a few years back. At the start of 2024, I was mostly invested in USA, with 10 positions. Although anecdotic, I am observing that for the 30-40 consumer centric companies that I follow, these companies are negatively impacted by the health of the USA consumer market. The political and economical division inside of America is not helping. I am particularly concern by the decline in purchasing power of the American middle class. As such, I decided to recenter around markets that I am comfortable with but outside of USA, markets that often provided more value and with less internal division, namely Canada (4), Japan (3), and Western Europe (6).
D-Box
D-Box is my 3rd largest Canadian position. D-Box had an exceptional year in 2025, the first time it was able to turn a significant profit.
D-Box is down 20% YTD but normal consolidation after a crazy run. Also the largest investor (referred below as the Activist) is trimming.
D-Box is the most important entertainment haptic company in the world. D-Box has been deployed in 1135 cinema theaters and the technology is expected to be deployed in more and more theaters, a 10-15% increase per year is expected. D-Box is still a small cap with only 222m shares currently trading at 75cents, trading at at market value of 165 million CAD. D-Box gets a royalty stream from all tickets purchased using the D-Box technology. It gets 10-15% of the premium part of the ticket, the premium part is around 8 USD. D-Box encodes in-house all movie released with D-Box experience.
The background
D-Box is a micro-cap with an innovative technology but an history of loosing money since it started:
The came an activist Daniel Marx of StoneHouse Capital who bought a 10% stake (roughly) and put pressure on the management to focus on the theater business segment which generates royalties versus the other segments (race tracking simulation and industry simulation) and cut expenses. It also help reshuffle the board and get more seasoned management in the cinema business.
New CEO Naveen Prasad
Naveen Prasad became CEO in April 2025 and he hired in November an ex-Sony Pictures executives Scott Sheer. My understanding is that the current CEO is traveling almost non stop to meet cinema operators to drive get new screens to get D-Box seats installed. It shows in the results, as 80 new screens were equipped in the December quarter, a record which represents a 7.5% increase in the number of active screens in just one quarter. The effect of the CEO - think Alain Bouchard ! - on a microcap can be so significant. A recent Scuttlebut investigation from Jon Cukierwar from Sohra Capital where he surveyed the number of screens for Cinemark alone, has shown an increase 118 screen since end of October. Since Hoyt’s cinema also likely rollout a good amount of screens in those 2 quarters, - Hoyt’s announced in June 2025 the addition of 539 new D-Box seats for the next 12 month, if we take Jon mid-range estimate and add 10 screens from other operators, we could get to close to 70 screens in Q1. In this case, we would be firmly in the 15%-20% increase range of new theater screens in the past 12 month. This would be a sharp acceleration thanks to the new management.
It took 9 quarter to increase the number of screens by 200. Under the new management, in just 3 quarters, D-Box added 35, 37 and 81 new screen or 153 screens in total. The 200 new screens might be achieved in just a year with the new management. More or less double the rate. Note that 30 screens that were never activated and installed under the previous management- we suspect installed in Russia - were removed from the total in the last Quarter.
Operating Margin
The other thing positive was a significant reduction in payroll. Management talks about re-priorities, but I suspect that some expenses were unjustified. We just have a tighter ship now. Here are the quarterly expenses of Sales and marketing and G&A in 000s CAD. You can observe the reduction starting in Q1 2025 for both.
Gross margin of system sales for the theater, sim racing and simulation (excluding royalties) have also sharply increase.
Latest 9month results
Cutting expenses, adding more screens plus a surge in royalties in the Summer quarters as resulted it sharp increase in operating income, going from 3.5 million CAD to 9.2 million CAD. I am discarded the positive effect of the 6.4 million tax recoveries. As such, the last 12 month of D-Box operating has generated 10 million CAD.
Cash machine
D-Box is a high tech company, generating most of its value by matching content ( movies, race track experience) with haptic code to create an immersive experience. It does make its own actuator, but do not need to invest large sum of Capex to keep the actuator business up to date. Most of its profits comes from royalties with some systems sales at a now more healthy 38% gross margin.
If you look at the latest cash flow below, it was able to generate 8 million in cash in the latest 9 month. Matching closely operating income. It currently has 16m in cash.
No tax for another 3 years
The company has accumulated a net deficit of 35 million, so at current rate, we have 3 years of income without paying tax.
How to value D-Box
Since D-Box is not paying tax, the best way to value the company is to look at the operating income, which removes non operating financial items. D-Box has earned 10m CAD in operating income or 0.045cents per share. It has 16m in cash, no debt so around 7 cents of cash per share. The Company has authorized to use its cash to purchase up to 10% of its shares or 15m CAD at current price. The stock trades at a PE (ex cash) of 15x. Earnings is expected to grow at 15-20% over the next following years based on:
1) New theaters rollout of D-Box representing a 10-15% growth per year, but likely 20% new adds in 2026 as discussed earlier.
2) Trailing earnings (calendar 2025) is based from a depressed 2025 box office likely the after effect of the 2023 writer and actor strike. 2026 NA Box office is expected to increase by 10%. There is strong correlation between NA box office over a trailing 12 month period and the operating profit and royalties that D-Box gets from viewing.
3) The following figure shows the ratio of the quarterly royalties per screen to the NA box office. Due to seasonality and movie content, management has advised us to use the 12 month moving average. This ratio makes only sense in a relative fashion. I use the royalties that the company got in one quarter per screen in Canadian dollar time 1 million and I divided that number by the North American Box Office realized in the same quarter in US Dollar. In any case, as we can see, D-Box gets a larger and larger share of the box office per screen from 1.25 in 2022 to 1.5 current. This upward trend is likely to continue fueling additional growth.
Expected operating income for calendar 2026
Based on the preceding points, an optimistic forecast - if management keeps hitting on all cylinders like they just did - could see an increase of 20% on the number of screens for Q2 2026 and onwards, an increase of 10% box office, and possibly a 5% increase in the ratio of royalties per screen over the Box office numbers.
This would result in a increase of 38% of the royalties revenue in calendar 2026. In 2025, royalties was 13.8 million, and the Company was able to achieve 11.2 million in EBIT or 81% of the royalty stream. I am adding 1.2 million of restructuring charge to the EBIT.
In the optimistic scenario, royalties could get as high as 19 million. Assuming the same ratio, this could lead to 15.39. Assuming a 10% repurchase or 20m shares in 2026, we could get as high as 0.075cents in EPS and the company would still have 15m in cash that is generated by the free cash flow in 2026. Such a sharp increase in EPS - 66% in operating income YoY would certainly lead to get the stock to trade at 20x PE.
In the conservative scenario, screens would increase by 15%, Box office would disapoints and grow MSD (5%) and without any ratio increase of royalties screen per box office NA. As such, royalties would still increase by 21% or to 16.7 million. Using the same 81% ratio, we would get to 13.6 million. Assuming just a 3% buyback, we would get to 118m shares and 0.063 cents per share. In this scenario, the stock might trade more likely at 15x earnings. the cash would pile up to 25 million.
Do the math.. Do your own research. This is microcap La La Land be careful.
Legal Disclaimer: All content published on Wintergems is intended for informational and entertainment purposes only. It is not intended to serve as a recommendation to buy or sell any security. The views expressed are my own and are subject to change without notice. The information provided here is proprietary. I make no representations or warranties as to the accuracy or completeness of the information provided and will not be liable for any losses, injuries, or damages from the display or use of this information. Readers are solely responsible for their own investment decisions.
I wonder why you added to Dollarama as it is relatively still expensive ... and same for ARM ?
And could you share more light on the reduced position in Alphabet (afraid of Capex, and play this increase with ARM) and Bombardier (was it the Middle East conflict or just the last year performance that made you take profit) ?
Interesting. Pernod Ricard is cheap but sales are in Freefall. How do you justify buying now?