Disclaimer: This isn’t funding recommendation. PLEASE DO YOUR OWN RESEARCH !!!
Expectation administration: In the event you like both/or: tremendous low-cost firms / excessive margins / capital gentle / quick time period catalysts / recurring income / low incomes volatility / Excessive dividends / share purchase backs / firms with merchandise within the grocery store → THIS IS NOT FOR YOU.
Elevator pitch:
DEME, a Belgian Marine Engineering Group, is a contrarian, secular progress /imply reversion story. Present outcomes are noisy, however progress, particularly in offshore wind set up is undamaged and accelerating. A mix of sturdy progress and bettering margins may result in a tripling of EPS over the subsequent 5 years.
Because the WordPress editor nonetheless sucks for longer writups, here’s a pdf model of the complete writeup. Don’t fear, it’s solely 18 pages and quite a lot of photos of good ships ?
As a particular service, the funding case & abstract for these to lazy to learn the Pdf:
Abstract:
General, DEME is clearly not a “no brainer”. It doesn’t display effectively and you really want to consider that offshore wind is just not useless. Nonetheless, in case you look nearer, I do suppose that DEME is a very attention-grabbing contrarian alternative. I’m very a lot satisfied that offshore wind will develop for a while and DEME will be capable of make some huge cash putting in windparks for a few years.
But additionally DEME’s different companies are no less than tremendous stable with revenue imply reversion potential. On high of this, I do suppose that DEME is a top quality firm.
It’s clearly extra dangerous from a enterprise perspective than my typical goal firm, as it’s mission primarily based and capital intensive. As any capital intensive enterprise, it may very well be topic to sturdy cycles which may negatively affect profitability, particularly within the off shore house.
Alternatively I do suppose that a few of that threat is mitigated by the massive and rising order books, the worldwide diversification and the secular tailwinds.
In the interim, I established a 3% place at round 88 EUR per share which displays the upper threat and that I’ve nonetheless to study so much about DEME’s enterprise..
