| High conviction ideas by Small & Micro Cap portfolio managers

Liquidity Services: Significant percentage in 22NW LP & Roumell Capital’s portfolio and signs of moat

by | Oct 2, 2019


M.Cap: $215 million

The company creates liquid marketplaces for surplus and scrap assets.

Traditional methods of surplus and salvage asset disposition include ad-hoc, negotiated direct sales, utilization of individual brokers or sales agents, and live on-site auctions.

The company provides sellers with a comprehensive solution to quickly bring surplus assets to market and enhance the financial value realized from the sale of their surplus assets.  The company provides its sellers with access to a network of liquid marketplaces with over 3.4 million professional buyers.

Roumell Asset Management

  • The top five stocks account for 57% of the total portfolio.
  • Liquidity service accounts for 10.9% of the total portfolio – Rank #2

22NW, LP

  • The top five stocks account for 38% of the total portfolio.
  • Liquidity service accounts for 6.2% of the total portfolio – Rank #6

Signs of moat

a) Network effect

The company’s CEO, Bill Angrick, in an interview, explains the network effect enjoyed by the company.

“More supply leads to more relevant listings for buyers, which leads to more buyers. More buyers leads to more transactions, meaning better results for sellers, thus creating more sellers, which circles back to more supply.”

b) Barriers to Entry

The company’s warehouse can be replicated – in fact, a competitor can easily double or triple the company’s warehouse capacity (which is less than 0.6 million square feet), but it is difficult to attract a large buyer and seller base.  Think of Facebook, LinkedIn, eBay – the network effect itself acts as a barrier to entry.



William P. Angrick, III

Ownership: 15.6%

Mr. Angrick held the belief that there is a better way forward in the $150 billion reverse supply chain industry and dedicated himself to creating a company to provide better service, scale, and results—and Liquidity Services was born. Mr. Angrick is a co-founder of the Company and has served as the Chairman of the Board of Directors and Chief Executive Officer of the Company since January 2000. 




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