THE MILLEGAN MEMO: POST-OCTOBER 2025
Brought to you by The Woodworth Contrarian Fund
October gave us drama; we’ll take cash flows. This issue covers a bruised Helen of Troy we think is mispriced, a local vineyard darling that flunks our capital test, Stellantis the misunderstood cash machine, and why both our Woodworth Oregon Index and the Peace of Westphalia rhyme around one theme: durable institutions are the real edge.
— Managing Partners Drew Millegan & Quinn Millegan
“You don’t need to be a genius to be a great investor. You just need to be disciplined and think independently. The best opportunities come from overlooked situations with simple stories.”
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OCTOBER IN ECONOMIC HISTORY: 1648 – The peace that made promises worth lending to
Peace of Westphalia. The Swearing of the Oath of Ratification of the Treaty of Münster, oil on copper by Gerard Terborch, 1648, depicting the settlement of the Peace of Westphalia.
By the autumn of 1648, Central Europe looked like the set of a biblical plague film: burned-out villages, empty parishes, fields gone to scrub, and whole regions missing what historians now estimate as 4.5 to 8 million people—as much as a third of the population in some territories—after thirty years of war. What began in 1618 as a dispute over religion and Habsburg authority had metastasized into industrialized ruin. Merchants were broke, princes were pawning their plate, tax rolls had dissolved, and mercenary armies drifted across the map like freelance locusts, paid—when they were paid at all—by whatever they could steal. When the diplomats finally signed the Peace of Westphalia on October 24, 1648, in Münster and Osnabrück, they did more than tell the guns to fall silent. The treaties redrew borders, confirmed the independence of the Dutch Republic, and hardened the rights of hundreds of territorial princes inside the Holy Roman Empire, including the authority to choose their own religion and strike treaties so long as they didn’t wreck the whole. It wasn’t heroic or poetic; it was paperwork. But to lenders, traders, and tax farmers, it delivered a revelation they hadn’t heard in a generation: this border is real, that tax stream belongs to someone you can find tomorrow, and there is an institution—however fragile—standing behind the seal on your contract.
The mistake is imagining that modern finance was born in that conference room. The Dutch were already running a remarkably modern playbook: the VOC IPO in 1602, tradable shares, active secondary markets, long-term annuities and short-term bills. Between 1621 and 1648, the province of Holland’s public debt swelled more than fivefold to roughly 125 million guilders, and investors still showed up because they trusted its fiscal machinery and representative institutions. By contrast, Habsburg Spain sat on galleons of American silver and paid usurious rates, crippled by a habit of serial default. Westphalia didn’t invent bond markets; it certified a new hierarchy of borrowers, formalizing what capital already suspected—that a state with defined territory, functioning courts, and some constraint on its rulers was safer than a roaming strongman with a heraldic animal. Interest rates did not collapse on October 25; Britain, for one, needed 1688 and a century of reform before it could borrow like the Dutch. But the direction of travel was locked in. Every time we talk about “sovereign risk,” every time one government bond trades as cash and another as a gamble, we’re relying on the same insight Westphalia helped write into Europe’s operating system: constitutions, courts, and tax offices are collateral. For investors, that’s the durable contrarian tell—when state capacity quietly strengthens beneath ugly headlines, you may be staring at underpriced safety; when the plumbing starts to rot, no extra yield is worth pretending you don’t smell the leak.
HELE - RESET CREATES OPPORTUNITY
Helen of Troy just took its medicine, and that’s exactly why we like it. A roughly $326 million non-cash impairment in Beauty & Wellness turned the headline into a scary –$13.44 GAAP loss per share, but underneath, the engine is still running: adjusted EPS of $0.59 beat expectations, revenue was down but disciplined (–8.9% to $431.8 million), gross margin held a healthy 44.2%, and adjusted operating margin, while compressed to 6.2%, stayed firmly positive. Inventories remain elevated and net debt near $893 million keeps everyone on their toes, yet management reaffirmed full-year sales and earnings guidance, is pushing China sourcing down toward 25–30% of COGS by year-end, has been upfront about covenant housekeeping if needed, and put new CEO Scott Uzzell on the Board to own the next chapter.
The selloff is doing patient investors a favor. In the high teens, HELE trades at roughly 5x the midpoint of that reaffirmed earnings guide, under 0.3x sales, and about 0.5x book for a portfolio of category leaders—OXO, Hydro Flask, Osprey, and established beauty brands that still sit on real shelves in real homes. That’s not a broken business; that’s a set of durable franchises temporarily priced as if the impairment swallowed the company. We see a classic reset: big write-down, cleaner balance sheet, clear cost and sourcing levers, and a new leadership team stepping into a low-expectations setup. If they simply execute—work inventories down, prove up cash generation, tidy the covenants—the path to a better multiple is straightforward, and it doesn’t require heroics. Our full HELE write-up walks through the brand-level math and scenarios in detail.
Please note that the Woodworth Contrarian Stock & Bond Fund, LP, of which the Millegan Brothers manage and are invested in, currently holds a position of HELE as of the publication date of this article. They may or may not choose to decrease or increase their exposure to this name for any reason at any time. This is not a recommendation to buy or sell HELE or any other name - investments incur significant risk, our risk tolerance may be significantly higher than the average investor, and any discussion in this article does not take into consideration your individual circumstances.
WVVI — Local flagship, local pride… but not our kind of value & Woodworth’s Oregon Index
On the surface, Willamette Valley Vineyards is everything we’re supposed to love: an Oregon name, recognizable brand, hard vineyard and winery assets, and a stock price that looks cheap at a few dollars a share. Look closer and the romance fades. Recent numbers show revenue drifting lower (Q2 2025 down about 1.3% year-on-year to ~$10.2 million), thin operating profit erased by more than $1.1 million in six-month preferred dividends, and a loss to common of roughly –$0.36 per share despite respectable gross margins. Stack roughly $25–30 million of obligations against a modest common equity value and a capital structure built on serial preferred issuance and shelf capacity, and the “discount” stops looking like a mispricing and starts looking like a warning label. This isn’t necessarily a misunderstood diamond in the rough; it’s a funding model that asks common shareholders to finish their glass last.
For us, that’s the point. Being based in Oregon doesn’t earn anyone a pass. We want to back businesses that create durable value here, not just ones that use the ZIP code in their marketing. That’s why we’re building the Woodworth Oregon Index—a simple, transparent way to track listed companies with real operating and employment footprints in the state: Nike, Lithia, Lattice, NW Natural, Dutch Bros, and a vetted bench of smaller names that actually move the local economy. The goal is to separate true builders from hometown narratives and give our LPs a clean lens on “Oregon exposure” alongside their core allocation. We’ll share the methodology and a draft constituent list soon; we’re genuinely interested in how you’d define who belongs in that basket.
Disclosure: The Woodworth Contrarian Stock & Bond Fund, LP does not hold WVVI as of this publication and may change its views or exposure at any time; nothing herein is a recommendation to buy or sell any security.
STLA — A misunderstood cash machine priced like a problem child
Stellantis is still treated like a messy Chrysler–Fiat reunion tour, even as the numbers say something very different. In Q3 2025, net revenue climbed about 13% to €37.2 billion and shipments rose 13% to 1.3 million units, with North America leading the recovery and U.S. market share nudging back toward 9%. At the same time, management rolled out a roughly $13 billion U.S. investment plan—reopening Belvidere, adding a new Ram midsize truck in Toledo, expanding SUV and hybrid/ICE capacity in Michigan and Indiana, and creating around 5,000 jobs—as it pushes for roughly 50% more domestic output. Six of ten planned 2025 launches are already on the road, and the portfolio is centered on exactly the segments that still throw off real cash: trucks, SUVs, and commercial vehicles.
Yet the stock trades as if none of that matters: around 6–7x forward earnings and roughly 0.2x sales, a steep discount to global peers for a top-five automaker with Jeep, Ram, Dodge, Peugeot, and Fiat under one roof. Yes, this is a capital-intensive, politically exposed, regulation-heavy business with EV/ICE mix risk and plenty of ways to stumble. But you’re not being asked to pay for perfection; you’re being offered durable brands, hard assets, and a clearer operating plan at “permanently broken” pricing. If management converts even a reasonable slice of this capex wave and product cycle into stable margins and free cash flow—without blowing up the balance sheet—the current valuation starts to look more like an opportunity than a verdict.
Please note that the Woodworth Contrarian Stock & Bond Fund, LP, of which the Millegan Brothers manage and are invested in, currently holds a position of STLA as of the publication date of this article. They may or may not choose to decrease or increase their exposure to this name for any reason at any time. This is not a recommendation to buy or sell STLA or any other name - investments incur significant risk, our risk tolerance may be significantly higher than the average investor, and any discussion in this article does not take into consideration your individual circumstances.
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Quinn Millegan (left) & Drew Millegan (right)
About the Managers: Brothers Drew Millegan and Quinn Millegan manage the Woodworth Contrarian Stock & Bond Fund, a hedge fund based in McMinnville, Oregon. They grew up in the finance world, and specialize in contrarian investment strategies in the US Public and Private markets.
Something missing from your portfolio may be a diversification into the Woodworth Contrarian Fund for accredited investors. Now is a great time to diversify your portfolio with an investment into a multi-award-winning fund. An exposure to a value-based contrarian strategy is a unique opportunity for your long term capital that you’re seeking aggressive returns for. With nine years of the Woodworth Fund under management, the Millegan Brothers are trained stock-pickers and experienced venture capital investors with a proven track record. Give us a call today to discuss a liquid investment with independent administration and independently audited monthly statements and a personal relationship.
