SCC Portfolio Update (YTD Thru Q2 2026)

4 days ago

10 min read

Seven Corners Capital's equity portfolio finished 1H 2026 down ~8%, versus up ~10% for the S&P 500, representing an underperformance of ~18% during the period. Since the beginning of 2020 (i.e., on a "Pandemic stacked basis"), the SCC Portfolio has appreciated ~196% versus up ~153% for the S&P 500, in each case including all dividends received, representing outperformance of 4,300 basis points versus the index:

	SCC	VFINX	vs VFINX
2026 YTD Return	-8%	10%	-18%
2025 Return	35%	18%	17%
2024 Return	17%	25%	-8%
2023 Return	17%	26%	-9%
2022 Return	6%	-18%	24%
2021 Return	11%	29%	-18%
2020 Return	46%	18%	28%
Pandemic Period	+196%	+153%	+43%
CAGR -->	18.2%	15.4%

“Lethargy, bordering on sloth, remains the cornerstone of our investing style.” --Warren Buffett

The following summarizes returns for the top 6 holdings in the SCC portfolio (representing 80% of total AUM; NOTE that "YTD Total Return" column includes all dividends received during the applicable time period):

The following is an update regarding earnings and other news for SCC's top-6 equity positions (PSHZF, GNW, TPB, CART, SD & RKT):

Pershing Square Holdings (PSHZF), 26% position (Cost Basis: $15.75; 6/30/2026 PPS: $49)

PSHZF, led by billionaire hedge fund manager Bill Ackman, finished 1H 2026 down 24% (including dividends), underperforming a 13% decrease in its NAV (thus, PSH's discount to NAV increased to 34%):

I have belatedly modified the long thesis to dispense with any closing of the sizable NAV discount over the short to intermediate term (although it may fluctuate between 15%-35%, which would imply that it currently stands at the lower end of the historical range). For whatever reason(s), the market has decided that Ackman's vehicle warrants a large NAV discount. [One factor that may have contributed to the recent widening in PSH's NAV discount was Pershing's launch of a $5 billion AUM US-based closed-end fund (CEF) earlier this year--perhaps this has lessened demand for PSH in Europe, as investors who have access to US-based exchanges can now buy the US CEF.] So what to do? Obviously, when market participants are willing to sell their merchandise (stock) at 1/3 off true value, it behooves PSH to simply repurchase as many shares as possible for as long as possible, thereby turning an apparent negative into a positive for long-term holders. On this front, happily, PSH has repurchased 75,692,585 Public Shares for a total of $1.9 billion at an average price of $25.27 as of June 30, 2026.
In addition, while Ackman previously hinted in 2022 that PSH could become a Berkshire Hathaway-type vehicle via a US listing, Ackman subsequently decided that PSH would instead invest in US-based opcos indirectly through Howard Hughes Corporation (HHH), of which PSH owns 18.8 million shares (32% of the outstanding). In May 2025, Pershing announced a transaction whereby the management co (i.e., not PSH, but rather Ackman & his investment team) invested $900MM in HHH stock at $100/share, thereby increasing the overall Pershing Square equity interest in HHH to 47%, with the following specifics:
- HHH will pay Pershing Square a quarterly base fee of $3.75M and a quarterly management fee equal to 0.375% of the increase in HHH’s equity market capitalization above the reference market cap of the company. The reference market cap is determined by multiplying the post-transaction share count of 59,393,938 (the “Reference Share Count”) by the reference market price of $66.1453, which is adjusted annually for inflation, subject to equitable adjustment for stock splits, reclassifications or similar capital changes.
- The management fee won't change if HHH issues addition shares to raise equity, acquire a company for stock, or for compensation to employees. As a result, the management fee will not increase due to share issuances. It will only increase if the company’s share price compounds at a rate in excess of inflation.
- HHH will seek to acquire controlling interests in high-quality, cash-flow generative public and private companies, Scott Sellers, chairman of HHH's special committee said. "We believe this agreement not only reflects the value that HHH has created in recent years, but it also positions the company to transform its strategy, with enhanced value creation opportunities and upside potential, while improving its credit profile," he said.
Importantly, Ackman clarified that performance fees earned by Pershing Square from its investment in HHH will offset (and reduce) the fees that would otherwise be charged by PSH to PSHZF shareholders on an ongoing basis (to the extent of PSH's ownership interest in HHH).
Additionally, in December 2025 HHH announced that it had entered into an agreement to acquire Vantage Group Holdings, a P&C and specialty insurer, for $2.1 billion. PSH will fund $1 billion of this amount through a zero-coupon preferred issuance, which would convert to common after 7 years unless HHH pays it off earlier (the repurchase price for each share of the PSH Preferred will be cash consideration equal to the greater of two values: the original issue price of the PSH Preferred plus 4% per annum through the repurchase date, or 1.5 times Vantage’s book value, multiplied by the ownership percentage of Vantage represented by the PSH Preferred shares (on an as-exchanged basis)). This transaction is part and parcel of the overall goal of HHH becoming a home for US-based operating companies, as well as a vehicle to own large cap common stocks. Ackman has stated that he expects to compose Vantage's investment portfolio of 40% short-term bonds and 60% equities, which hopefully will lead to a 20% ROE for the insurer:
The full slide presentation for the Vantage transaction may be found here.
Linked are the most recent NAV performance statistics and monthly performance reports for PSHZF.
Pershing Square Capital Management's 13-F holdings can be found here. In addition, PSH continues to repurchase shares under its repo program (see PRs here).
The original 2018 SCC long case for PSHZF can be found here. PSHZF has appreciated over 20% annually since this bull thesis was published.

Genworth Financial (GNW), 17% position (Cost Basis: $3.75; 6/30/2026 PPS: $9.50)

GNW stock finished the 1st half of 2026 up 6%, marginally underperforming the S&P.
GNW continues to represent a way to obtain (A) (at a discount) indirect ownership in its 80% owned subsidiary, Enact Holdings (ACT), a private mortgage insurer, and (B) a call option on its other businesses (Long Term Care and Life & Annuity). SCC has previously provided calculations regarding GNW's seemingly perpetual discount to its sum-of-the-parts (which most recently stands about 18%), which is needless to repeat here. Another way to think of it: GNW currently owns 110.4 million shares of ACT (per Form 4, dated 9/1/2026); with 378 million shares of GNW outstanding (per the GNW Q2 10Q filing), this means that each share of GNW represents ownership of 0.292 shares of ACT, worth $14.30 as of the end of 2025 (versus the $10.35 GNW share price).
Of course, GNW also carries net debt of around $540 million at the holdco level, however this could be paid off completely with the $750 million expected to be received by GNW pursuant to the Santander/AXA payment protection litigation, currently on appeal by Santander. From GNW's Q3 2025 earnings call: "The U.K. High Court in July [2025] issued a favorable judgment holding Santander liable for losses related to the mis-selling of payment protection insurance. In October, Santander was granted permission to appeal the judgment. We continue to expect this process to take 12 to 18 months and remain confident in AXA's position. If the ruling is upheld, we expect to recover approximately $750 million, subject to exchange rates at that time."
The SCC underlying thesis on GNW involves the eventual separation of GNW's ACT stake from GNW's generally unprofitable long-term care & life and annuity operations (the market currently ascribes zero value to the latter). Longer term value could be unlocked by a de-stacking transaction involving GNW's Life & Annuity business (L&A). Currently L&A is trapped below the long-term care business in the org chart, hence no funds may dividended up from that entity to the holdco; however, L&A could become valuable if and when the applicable insurance regulators give their blessing to GNW liberating it from the LTC stranglehold.
The company has been actively repurchasing its stock in recent years (notably, this began after SCC started applying pressure on GNW management in 2022). Thru the end of Q2 2026, GNW has repurchased $922MM of stock in aggregate under the repo program at an average price of $6.48 per share.
SCC's discussion of the corporate governance issues plaguing GNW in recent years can be found as follows: initially (2022), here and, more recently (2025), here.

Turning Point Brands (TPB), 14% position (Cost Basis: $25.60; 6/30/2026 PPS: $85)

Turning Point Brands, whose stock retraced a sizeable chunk of its massive 2025 gain during 1H 2026, is an old standby in the SCC portfolio, having originally been purchased back in Q3 of 2016 (via SCC's investment in Standard Diversified [SDI], which then owned a majority stake in TPB and subsequently merged into TPB in mid-2020). The investment thesis remains that the company enjoys the benefit of a steady, high-quality compounding business model via its Zig-Zag and Stoker's brands, which should benefit from a tailwind in the long-term decline of the use of traditional cigarettes. Stoker's FRE brand of smokeless tobacco is currently growing at an extremely high rate; per TPB's Q2 2026 results announcement from November: "Q2 2026 Modern Oral Gross Revenue increased 149% to $87.0 million and Net Sales increased 128% to $68.4." Thus, the run-up in the stock price over the past 2 years likely reflects, in large part, investor optimism regarding the future value of the FRE business.
TPB's dividend is still stuck at a low level ($0.32 annually). Once the FRE segment reaches a relatively mature state (in the intermediate term of 1-3 years), however, the company should have room to increase this payment materially.

Instacart (Maplebear Inc.) (CART), 8% position (Cost Basis: $30; 6/30/2026 PPS: $47)

Instacart's stock appreciated about 2% in 1H 2026, underperforming the overall market, but remains up well over 50% from SCC's cost basis. In Q2 2026 (see PR here), orders grew 9% year-over-year, GTV increased 14%, and both net income and Adjusted EBITDA expanded. Net income came in at $111MM, or $0.41/diluted share. On a forward (fiscal 2026) basis, the company trades at 20X expected "adjusted" earnings of ~$2.35/share, which seems reasonable given its growth prospects and the inherent strength of its business model.
The more consumers realize that ordering their groceries and other household items via CART is saving them large chunks of time (and time, of course, is money) without any meaningful sacrifice in the quality of selection, the more often they use the service. On the other hand, the greater the use of CART's service, the better the speed and quality of selection becomes (as CART's designated shoppers' skills increase). This virtuous circle results in increased shareholder value. While many other public companies experienced a temporary COVID boost to their operations that subsequently dissipated (think Peloton, for example), the inherent robustness of CART's business model appears to have been maintained and the company has incrementally built upon the foundation it created during the 2020-2022 pandemic period.
Of course, the convenience benefit provided by ordering via CART is somewhat offset by the fact that retailers typically charge higher prices online versus in-store; nevertheless, one would expect that market pressure will gradually reduce these disparities over time.
Frustratingly, CART's stock has been hit repeatedly recently by questions about competition from Amazon and Kroger, as well as an FTC probe into its pricing algorithms. However, we think this short-term noise will abate and the stock will reflect the business results in the long term.
CART's CEO Fidji Simo resigned in May 2025 (effective on August 15th) to work at an AI company and CART replaced her with its Chief Business Officer Chris Rogers (who originally joined the company in 2019). We don't see things changing much as a result of this CEO shift, as several large holders of stock remain represented on the board.

Sandridge Energy (SD), 8% position (Cost Basis: $5.53; 6/30/2026 PPS: $14)

Sandridge is SCC's largest energy holding, whose stock has been relatively stagnant (along with the price of oil & natural gas) over the past 2 years. The long thesis here remains that the secular decline in O&G drilling, combined with the revival of inflation generally, will support carbon-based energy prices going forward (in other words, if you own O&G assets, then ESG is your friend). With legendary investor Carl Icahn as its largest shareholder (he owns 13%) and Icahn's former lieutenant Jonathan Frates as SD's CFO, Sandridge did an admirable job steering the company away from the abyss of bankruptcy in April 2020 (when, recall, the price of oil dropped to NEGATIVE $40/bbl). The company has cut unnecessary expenses to the bone ("high-grading" SD's well inventory in fact, not just as a management talking point), thereby maximizing free cash flow conversion. SD has also done a great job recompleting and reactivating dormant wells. SD's annual PDP decline is expected (by the company) to average approximately 8% over the foreseeable future.
In Q3 2024, SD acquired additional production and acreage in the Western Anadarko basin (in Oklahoma) for a cost of $144MM, which was equal to 68% of their cash balance of $211MM as of the end of Q2 2024 (see PR here). Should oil prices increase over the next 3-5 years, this acquisition will redound to SD's benefit.
In addition, the company retains significant natural gas acreage, which presumably should benefit as LNG exports from the Gulf Coast ramp up over the next decade.

Rocket Companies (RKT), 6% position (Cost Basis: $8.24; 6/30/2026 PPS: $16)

Rocket Companies announced two transformative acquisitions during the first half of 2025, of (1) Redfin [PR here] and (2) Mr Cooper [PR here]. In connection with the Redfin transaction, which closed on July 1, 2025, Rocket collapsed its "Up-C" structure and now all of the company's common stock has equal voting rights. The Mr Cooper transaction closed on October 1, 2025.
Redfin Acquisition: Valued at $1.75B (or $12.50/RFIN share). Stated rationale: "By combining Redfin's home search and real estate agent network with Rocket's mortgage origination and servicing capabilities, [RKT] envisions a more seamless experience from search to close, to servicing and future transactions." The company has already announced that clients buying a house using a Redfin agent and obtaining a Rocket Mortgage to finance the purchase will receive preferred mortgage pricing: "Clients who finance their home through Rocket Mortgage and buy a home listed by a Redfin agent or purchase with the help of a Redfin agent will have a one percentage point reduction in their interest rate for the first year of their loan or receive a lender credit at closing, up to $6,000".
Mr Cooper Acquisition: Valued at $9.4B (or 11 RKT shares for each COOP share); Rocket shareholders will own approximately 75% of the combined company on a fully diluted basis [pro forma for the Redfin transaction], while Mr. Cooper shareholders will own approximately 25%. Stated rationale: "(1) Combined company to service more than $2.1 trillion in loan volume. (2) Integrating Rocket's originations-servicing recapture flywheel with Mr. Cooper's servicing platform will drive down costs and improve the experience for the companies' nearly 10 million combined clients, representing one in every six mortgages. (3) Transaction is expected to generate annual run-rate revenue and cost synergies of approximately $500 million, contributing to organic revenue growth while increasing operating leverage and maintaining significant capital and liquidity".
We like investing alongside a certified brilliant entrepreneur like Dan Gilbert, whose 1.8 billion Class L share position is now effectively on par with all other shareholders (i.e., with (A) no super-majority voting power and (B) equal rights to dividends and residual net assets as the Class A common holders).