Disclaimer: This isn’t funding recommendation. PLEASE DO YOUR OWN RESEARCH !!!
As all the time with my extra detailed writeups, I’ll concentrate on the final sections within the submit and fix the complete pdf for anybody within the particulars. And naturally the Bonus Sound Monitor.
- Elevator pitch:
STEF SA is a reasonably distinctive listed French firm that runs a “temperature managed” agrifood provide chain and logistics enterprise throughout 8 European nations. Majority owned by its Administrators and Workers (~72%) the corporate has compounded guide worth, earnings and dividends by 12% p.a. over the previous 22 years with little or no affect from any of the massive crises (GFC, Euro, Covid, Ukraine) that hit Europe within the meantime.
This enterprise trades at an unbelievable low 8x trailing P/E which in my view, contemplating the monitor report, their development alternatives and the “important infrastructure” character is a “bonkers cut price”.
Some shorter time period headwinds exist (rates of interest, French politics, agrifood inflation), however within the mid- to long run the set.up for very respectable shareholder return is superb, with very restricted basic draw back,
- Introduction:
I’ve appeared superficially at STEF infrequently however for some cause, I by no means went deeper however stored it on my watch checklist. Solely lately, after I scored my watchlist extra systematically, STEF got here out as fairly engaging. As well as, the present political tensions in France motivated me to dig deeper.
- The Firm & The enterprise
3.1. What Downside does STEF resolve ?
STEF is lively in “temperature managed” storage and transport of meals from the producers to both wholesalers, retailers or eating places. Many meals objects are perishable and the hotter the setting, the sooner these things will go dangerous. In lots of instances, going dangerous can impact extreme well being issues for the last word finish buyer. STEF, with its triukcs and particularly warehouses helps to maintain meals cool and recent with out incurring too excessive prices for this service.
3.2. The Firm.
STEF SA is a French firm, Paris headquartered with a market cap of 1,4 bn EUR that’s lively in “temperature managed” transport and storage of meals. They’re lively in 8 European nations, the most important market is their dwelling market France.
The corporate is greater than 100 years outdated, nevertheless till 1987, the corporate was owned by SNCF, the Authorities prepare operator. It was then privatized and eventually listed in 1998 on the inventory market.
11. Professional’s and Con’s:
As all the time, at this stage a fast abstract over the Professional’s and Con’s for STEF;
Professional’s:
- Workers personal 18%, whole insider possession 73%
- Important logistic/infrastructure
- not very cyclical
- Excellent long run monitor report
- sale of loss making maritime enterprise in 2023 (at a revenue)
- Good reporting (no changes, natural vs. inorganic and many others.)
- market chief in Europe, competitors fragmented, Community results
- Strategic refocusing (sale of delivery in 2023, Well being logistics in 2024)
- Potential Inflection level for worldwide enterprise
- attention-grabbing adjoining companies as development alternatives
- Respectable administration alignment
- Respectable capital allocation / Capital administration
Cons:
- capital intensive (actual property)
- debt /greater curiosity price
- no laborious catalyst
- all the time comparatively low P/E
- weak French core enterprise because of meals inflation in 2023
- political setting France
12. Conclusion and Sport Plan
Total, STEF appears to be like just like the Archetype of firm that I’m searching for: Boring, underneath the radar, nice monitor report, respectable enterprise, respectable administration and a really respectable valuation.
In fact, investing into European small caps in the meanwhile will not be lots of enjoyable. Alternatively, that is additionally the explanation why you should buy into such high quality compounders at “bonker cut price” costs.
The sport plan right here is comparatively simple: Sit again and watch them execute.
As SETF hits so a lot of my necessities, I made a decision to allocate 5% of the portfolio into STEF at a share value of round 116,50 EUR per share.
Why 5% ? As a result of I actually assume that the mix of enterprise high quality, monitor report and valuation is sort of distinctive and really engaging. In comparison with Eurokai and EVS, the Upside appears comparable, however the draw back in my view is even higher coated by the defensive enterprise mannequin.
So as to partially finance this place, I offered my remaining Biontech place (~1% of the portfolio).
Bonus monitor:
I feel this tune suits very good to STEF’s core enterprise:
