Investment Idea Highlights Worth A Look

In Case You Missed It

Sep 24, 2024

Below are a series of Investment ideas published previously which have been very popular and, if you missed them, are worthy of your attention.

Disclaimer:

Views, information and opinions expressed in this analysis are those of the author. They should neither be construed as investment advice nor as a recommendation to buy or sell any particular security. Security specific information should not be relied upon as the basis for your own investment decisions. You must do your own research, seek independent advice and reach your own conclusions. The author may have a position in securities named in this article and may change those position at any time

Long-Term Buy & Hold Opportunities

Olin, Jan 2024

A market leader in a critical niche business, unlikely to be challenged by new entrants, having adopted a new operating model that has almost doubled free-cash flow permanently. Very limited CAPEX requirements going forward, so free-cash flow is being used to reduce the share count significantly.

Alpha Group , Aug 2024

A fast growing global fin-tech disruptor leveraging a free-float to amplify robust earnings. Impressive growth and free-cash flow. New offices in Australia and Canada promise to replicate the success enjoyed in Europe. Excellent corporate culture with a customer-centric operating model and decisions being made based on long-term objectives.

Adyen, Sep 2023

While other payment providers are focused on mom and pop shops, Adyen is the hi-tech market leading payments partner of choice for large enterprises including Uber, Spotify, Ebay, Facebook, Microsoft, Hugo Boss, L’Oreal, Netflix, Cathay Pacific, McDonalds and more. It’s technology is way ahead of the competition. It has a first class management team and corporate culture. Its short-term growth expenditure has now slowed significantly, marking an inflection point with significant operating leverage anticipated to show in the numbers through 2025 and 2026.

Re-Ratings Likely In Next 12 Months

Some companies, for various reasons, have robust businesses but see their stock fall temporarily out of favour with the market. These companies trade well below their intrinsic value yet forthcoming catalysts will almost certainly result in a re-rating in the next 12 months. These include

Strix , Jun 2024

A market leading kitchen water appliance business with strong unit economics. Recent acquisitions are paying off, debt reduction is in evidence and a re-rating of the stock highly likely in the year ahead.

Manolete Partners, Dec 2022

This leading niche insolvency litigation firm specializes in acquiring rights to meritorious legal claims and pursuing them to resolution. The business was temporarily impacted by the COVID-19 pandemic, as government interventions to prevent insolvencies and court shutdowns caused a backlog of cases. With those challenges now resolved, the firm is experiencing record levels of business. Additionally, it has a significant long-running claim against a cartel of truck manufacturers in which liability has all but been established based on legal precedents from litigation of similar fact that has already concluded. Settlement is expected to anytime between now and September 2025.

Anexo, Jun 2024

This company is a market-leading niche legal and credit hire business specializing in road traffic accidents and housing disrepair litigation. It is also involved in class actions against motor manufacturers over vehicle emission disclosure irregularities. Despite trading at less than half of its net asset value, primarily due to leverage used to fund emission claims, one of those claims has settled (Volkswagen) and all of the others are anticipated to settle either in Q4 2024 or Q1 2025. This will result in a large cash inflow for the business enabling it to pay down its debt at which point a re-rating is expected. The company received a take-over bid from a private equity firm in 2021 at 2.3x its current share price, yet the business economics have improved since then implying that it ought to be worth more today. That private equity firm still holds a 29% stake in the business and awaits the re-rating.