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Disclosures: Neither Alex nor Huckleberry has an interest in any security mentioned.

Disclosures: Huckleberry and Alex Pape, CFA own shares of Gentrack Group. This is hopefully rather obvious, as it is the topic of the entire video.

Dear Investors, It’s summer! That means beaches, mojitos, and — for your Huckleberry team — the endless pursuit of value. As always. For updates on your investments, plus a teaser on Tom’s second book (being published in August, and arriving in your mailboxes shortly after) and a look forward, click this big purple button:

See Your Summer 2016 Investor Letter

For those of you who would prefer to get back to the sand and minty drinks with all expediency, our updated returns are below. Cheers, Alex Pape, CFA CEO, Huckleberry

The biggest Huckleberry Virtuous Circle event this quarter has been the continuing of CorEnergy Infrastructure Trust’s (CORR) massive gain from its February bottom. After being beaten down due to the panic in energy stocks (and other reasons that were both superficial and factually wrong), CORR produced a 171% gain, including dividends, from February 11 to July 13, and 54% in Q2 alone. This certainly helped client accounts, but it is also a reminder that the more a stock drops, the more ground it must make up (a 50% loss requires a 100% gain). But up 7.6% in the last year beats the alternatives. And the dividend, currently 10% but over 20% at the bottom, bought more shares when reinvested.

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A Barron’s article featured Cincinnati Bell, which then jumped over 20% in just a few days. We’re glad to see reasoned analysis that agrees with our own, though we are wary of confirmation bias. Close to $5/share, CinBell is worth $7 and up to a buyer, so we’re not selling. As always with an unusual move unrelated to business performance, the quick gains may as quickly recede.

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John Malone’s many media companies, of which we own five, spun off its Atlanta Braves property (BATRA) and will spin off this week its small CommerceHub.com. I sold BATRA and will sell CommerceHub from your accounts. They are tiny businesses that are not crucial to

Hertz Global Holdings spun off its equipment rental division, which I sold also. We want to own Hertz, which we knew said it would use the cash from the spinoff to buy back more Hertz shares. Good.

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PORTFOLIO TURNOVER: A BIOTECH VALUE BUY

HVC had only one portfolio change in Q2, adding Gilead Sciences, a biotech drug maker. Some of you may remember I wrote the monthly investing column for the journal Nature Biotechnology, which experience caused me to swear off biotech forever, and ask, “What’s up?”

But Gilead isn’t a biotech in the way we think – not a newly-public start up with no approved products and a “promising” platform or drug in trials. It’s an established drug maker with superb approved and best- selling treatments for, among other things, Hepatitis C and HIV/AIDS.

Still, to buy a drug maker, I’d have to say I understand the science and competition and, well, that’s a rabbit hole. However, Gilead stock got hit so hard – plummeting 20% - after earnings in April and into May that it was priced for a scenario in which its existing drugs could falter and all new drugs fail to be approved, and its then-current valuation still offer limited downside risk. Talk about an unloved thrown out stock! That’s when we want to buy: when something is so unloved and emotionally discarded that it doesn’t evenrequiresharpeningadigitalpencil!Oh,it fits HVC perfectly, paying a sustainable dividend and buying back what was already discounted stock and now is on sale.

Gilead is a small position for HVC, but as my friend Zeke Ashton of Centaur Capital Partner

says, “100% gain for a small position beats 100% of a 0% position.” Indeed.

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OVERALL PORTFOLIO MANAGEMENT

Over the months, I’ve taken HVC down from 20% cash to about 6% today. The bargains just keep on coming. This hasn’t meant portfolio turnover – completely exiting a position or starting a brand new one – and I expect annual turnover to be very low. You

may notice rebalancing and dividend reinvesting, which are normal, but that’s not turnover.

We will likely add new or eliminate existing positions rarely, and only when they are richly priced or there’s something better. For example, telecom Windstream (WIN, indeed) has brought phenomenal gains and is the largest single position in HVC. Approaching $10, it could be worth $12-ish, so I wouldn’t be surprised if we lighten up ahead.

So 14% of our cash has gone to Gilead and existing positions. Our NorthStar investments – NorthStar Realty Finance, NorthStar Realty Europe, and NorthStar Asset Management (to be merged back into NorthStar Realty Finance) – remain ridiculously undervalued. Taken together, the three form our second largest holding after the combined John Malone-controlled companies (anything that begins with “Liberty” and also SiriusXM Holdings), at 9% and 10% respectively.