Disclaimer: This isn’t funding recommendation. PLEASE DO YOUR OWN RESEARCH !!!
Expectation administration: When 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 robust progress and enhancing margins might result in a tripling of EPS over the following 5 years.
Because the WordPress editor nonetheless sucks for longer writups, here’s a pdf model of the total 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 screen properly and you really want to imagine that offshore wind shouldn’t be useless. Nonetheless, if you happen to look nearer, I do assume 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 to make some huge cash putting in windparks for a few years.
But in addition DEME’s different companies are at the very least tremendous strong with revenue imply reversion potential. On high of this, I do assume that DEME is a top quality firm.
It’s clearly extra dangerous from a enterprise perspective than my typical goal firm, as it’s challenge based mostly and capital intensive. As any capital intensive enterprise, it could possibly be topic to robust cycles which might negatively affect profitability, particularly within the off shore house.
Then again I do assume that a few of that danger is mitigated by the massive and rising order books, the worldwide diversification and the secular tailwinds.
In the intervening time, I established a 3% place at round 88 EUR per share which displays the upper danger and that I’ve nonetheless to study rather a lot about DEME’s enterprise..