Disclaimer: This isn’t funding recommendation. PLEASE DO YOUR OWN RESEARCH !!!
As at all times with my extra detailed writeups, I’ll deal with the final sections within the put up and connect 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 international locations. Majority owned by its Administrators and Workers (~72%) the corporate has compounded e book worth, earnings and dividends by 12% p.a. over the previous 22 years with little or no impression 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 for my part, contemplating the monitor document, 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 first rate shareholder return is great, with very restricted basic draw back,
- Introduction:
I’ve regarded superficially at STEF every so often however for some cause, I by no means went deeper however saved it on my watch record. Solely lately, once 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 Drawback does STEF clear up ?
STEF is lively in “temperature managed” storage and transport of meals from the producers to both wholesalers, retailers or eating places. Many meals gadgets are perishable and the hotter the surroundings, the quicker this stuff will go unhealthy. In lots of circumstances, going unhealthy can impact extreme well being issues for the final 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 international locations, the most important market is their dwelling market France.
The corporate is greater than 100 years previous, nevertheless till 1987, the corporate was owned by SNCF, the Authorities practice operator. It was then privatized and eventually listed in 1998 on the inventory market.
11. Professional’s and Con’s:
As at all times, 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 document
- 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
- fascinating adjoining companies as development alternatives
- Respectable administration alignment
- Respectable capital allocation / Capital administration
Cons:
- capital intensive (actual property)
- debt /increased curiosity price
- no exhausting catalyst
- at all times comparatively low P/E
- weak French core enterprise attributable to meals inflation in 2023
- political surroundings France
12. Conclusion and Sport Plan
Total, STEF appears just like the Archetype of firm that I’m searching for: Boring, below the radar, nice monitor document, first rate enterprise, first rate administration and a really first rate valuation.
In fact, investing into European small caps in the mean time just isn’t a whole lot of enjoyable. Alternatively, that is additionally the rationale why you should buy into such high quality compounders at “bonker cut price” costs.
The sport plan right here is comparatively straightforward: 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 worth of round 116,50 EUR per share.
Why 5% ? As a result of I actually suppose that the mix of enterprise high quality, monitor document and valuation is sort of distinctive and really engaging. In comparison with Eurokai and EVS, the Upside appears comparable, however the draw back for my part is even higher coated by the defensive enterprise mannequin.
With a purpose to partially finance this place, I offered my remaining Biontech place (~1% of the portfolio).
Bonus monitor:
I believe this music suits very good to STEF’s core enterprise:
