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Disclaimer: This isn’t funding recommendation. PLEASE DO YOUR OWN RESEARCH !!!
Expectation administration: When you like both/or: tremendous low-cost corporations / excessive margins / capital gentle / brief time period catalysts / recurring income / low incomes volatility / Excessive dividends / share purchase backs / corporations 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 mixture of sturdy progress and enhancing 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 total writeup. Don’t fear, it’s solely 18 pages and a whole lot of footage 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 nicely and you actually need to consider that offshore wind just isn’t lifeless. Nonetheless, for those who look nearer, I do assume that DEME is a very fascinating 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 a minimum of tremendous stable with revenue imply reversion potential. On prime 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 undertaking based mostly and capital intensive. As any capital intensive enterprise, it may very well be topic to sturdy cycles which may negatively impression profitability, particularly within the off shore house.
However 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 meanwhile, I established a 3% place at round 88 EUR per share which displays the upper danger and that I’ve nonetheless to study lots about DEME’s enterprise..
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