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Disclaimer: This isn’t funding recommendation. PLEASE DO YOUR OWN RESEARCH !!!
Expectation administration: If you happen to like both/or: tremendous low-cost corporations / excessive margins / capital gentle / quick 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 unbroken and accelerating. A mix of sturdy progress and bettering margins might 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 a number of photos of good ships ?
As a particular service, the funding case & abstract for these to lazy to learn the Pdf:
Abstract:
Total, DEME is clearly not a “no brainer”. It doesn’t display effectively and you actually need to consider that offshore wind will not be useless. Nonetheless, should you look nearer, I do suppose that DEME is a extremely fascinating contrarian alternative. I’m very a lot satisfied that offshore wind will develop for a while and DEME will have the ability to 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 prime 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 undertaking based mostly and capital intensive. As any capital intensive enterprise, it might be topic to sturdy cycles which might negatively impression profitability, particularly within the off shore house.
Alternatively I do suppose that a few of that threat is mitigated by the big 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 threat and that I’ve nonetheless to be taught loads about DEME’s enterprise..
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