Great British Stock Write-ups! #12
12 write-ups on UK equities
1. Ashtead Technology (£AT) – South Sea Investing
Thesis: Ashtead Technology is poised for growth by capitalising on increasing global demand for offshore energy, both renewables and oil & gas, through strategic acquisitions and equipment rental services. Despite a recent share price drop, its strong financial performance, expanding market share, and undervalued metrics suggest a compelling investment opportunity.
2. B&M European Value Retail (£BME) – Moat Mind
Thesis: B&M “is a leading discount retailer operating a chain of variety stores offering a broad mix of general merchandise and groceries,” and it “has several durable advantages that constitute its economic moat in the discount retail industry. At its current trading price of roughly £2.74, our model indicates an internal rate of return (IRR) of about 18.4%.”
3. B&M European Value Retail (£BME) – 10Bagger
Thesis: ”A nearly 50% decline in the share price over the past 12 months, compared to expected earnings decline of only about 6%, has created a significant investment opportunity. The company has double-digit growth, high returns on invested capital, and the potential to continue reinvesting for many years.”
4. British American Tobacco (£BATS) – Coughlin Capital
Thesis: “BAT sells nicotine products to consumers, mainly through retail channels.” “At 8.9x earnings and with a 7% dividend yield, it seems the market is pricing in an awful lot of pessimism. I see a business still capable of generating steady profits while investing for an attractive future. With some luck and solid execution, I believe BAT shares can deliver solid returns from here.”
5. Dowlais (£DWL) – Cornerstone Value
Thesis: “Dowlais offers an attractive set of near-term catalysts. The firm is working to approve a cash-and-stock merger with U.S.-listed peer American-Axle, and current deal terms offer an extremely attractive upside/downside ratio of 13% deal premium vs 2% breakage. If or when the merger breaks, we expect management to resume the strategic review of non-core assets and continue to put cash into buybacks.”
6. Focusrite (£TUNE) – Wonder Stocks
Thesis: “A global business known for its high-quality audio interfaces and professional music equipment.” “As revenue recovers and sentiment shifts, the stock could deliver between 350% and 500% in capital return alone. With limited analyst coverage and the stock still under the radar, now may be an opportune moment to get in before the market fully recognises its turnaround potential.”
7. Goodwin plc (£GDWN) - Matt Brazier's Investment Diary
Thesis: “Shares currently trade at 16 times 2022 net profit and profit is likely to rise in the current year based on management commentary regarding work in hand. I think the chances are that Goodwin will surpass its record earnings-per-share performance of 2014 in the next few years which would represent a price-to-earnings ratio of just over 10 at the current share price.”
8. Kinovo (£KINO) – Stingy and Poor
Thesis: “Kinovo provides building repair and maintenance, electrical and mechanical services to local councils and housing associations… Kinovo is currently trading below 6x of its CURRENT earnings. This appears cheap to me considering the certainty of its cashflows (£175m of three-year visible revenues and growing).”
9. React Group (£REAT) – Just A Value Investor
Thesis: “React group is a specialised emergency cleaning business that focuses on cleaning hazardous or urgent situations which need to be cleaned by someone with specialist expertise… While React isn’t a screaming buy, it’s interesting enough to be on my watchlist. I’m waiting to see if the Aquaflow acquisition works out and if they stop diluting.”
10. Syncona Partners Limited (£SYNC) - _H_A_Z_E of Canary Wharf Bets on Reddit
Thesis: “Syncona presents an investment opportunity, particularly for those with a long-term perspective. Syncona's focus on early-stage life sciences companies, coupled with their proven track record of developing and realising value, positions them well for future success. The company's commitment to building a diverse portfolio, with a target of 20-25 life science companies by 2032, and their ambitious goal of achieving a NAV of £5 billion, underscores their growth potential.”
11. Ultimate Products plc (£ULTP) – Demystified Value
Thesis: “Ultimate Products plc is a supplier of household products to the UK and European markets such as cookware, laundry, floorcare, audio and other types of products…. If we believe this capital light, highly cash generative business is worth 8x EBITDA, that would put this at a 13x P/E multiple. 86% upside from today’s price.”
12. Watches of Switzerland Group (£WOSG) – Sempiterno Investments
Thesis: This international retailer of luxury watch and jewellery brands presents an opportunity as management has an excellent track record; they have long-term agreements with luxury brands; there is the possibility of sustainable US growth; there are clear and growing competitive advantages; and this is trading at an attractive valuation.