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Gabriel Castro, CFA Profile picture
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5 Apr, 5 tweets, 4 min read
Amazing presentation from Pax Global on its FY 2020 earnings and fantastic Chairman's speech sharing his ambitious goal. Call transcript avaiable in the following link:

slideshare.net/GabrielCastroC…
The company is beating the most optimistic estimates. Management is excellent. They left China avoiding the commoditization and price war before nobody predicted it and switched to geographies where they add real value. Their moat is growing day by day and the best is yet to come
The management is aware of the shareholders' needs. They know the stock is really cheap and will continue to unlock value through increasing shareholder reward
Brokers are increasing the Target Price, but they are still very far from a reasonable valuation. CMS raised Pax Target Price up to HK$ 12.1 from HK$ 10.1 as back in December I predicted. I bet they will raise the TP again this year

I will update the valuation and provide my thoughts during the week on a video, but I can reveal we are increasing our internal TP due to better capital allocation decisions and Pax still has >100% upside from here

youtube.com/channel/UCfZzQ…

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More from @gabcasla

Gabriel Castro, CFA Profile picture
29 Mar
Pax Global reported amazing results and uploaded the best presentation I've seen since we became shareholders. Market should ease concerns on capital allocation and Long Term prospects from now. As I said many times, despite the huge price increase, the best is yet to come! 👇
Pax reported 0.83 EPS. It increased 46% due to 44% profit increase and 1.2% share count reduction. The adjusted profit is 0.91 EPS. Minor non-cash impairments due to COVID and the stock option are the differences. Notice that Pax stock option expenses are not recurrent like in US
While competitors like Ingenico struggled in 2020, Pax delivered an outstanding growth in all geographies due to its superior Android portfolio and SaaS solution. Moreover,the company didn't rest on their laurels, Pax increased 16% its R&D expenses above of its 15% revenue growth
Read 8 tweets
Gabriel Castro, CFA Profile picture
24 Mar
Bompard llegó a Carrefour en 2017 y diseñó un plan de turnaround desde 2018 a 2022. Los primeros tres años consistían en estabilizar el negocio, recuperar la confianza del consumidor y reorganizar la empresa para prepararla para el crecimiento futuro
La primera fase del plan ha sido un éxito: 1.Confianza del consumidor en máximos (NPS). 2. Reducción de costes, deuda e ingresos por activos non-core superando las expectativas. 3. Aumento de la marca blanca y reorganización de su portfolio. 4. Ecommerce
La perfecta ejecución del plan se ha trasladado en una significativa mejoría reduciendo en más de €1bn la deuda financiera y acumulando un crecimiento de EPS del 25% en los últimos 3 años. Especialmente significativo el turnaround en Francia donde los analistas eran recelosos
Read 7 tweets
Gabriel Castro, CFA Profile picture
19 Mar
$ZIM We started a position last Feb in the integrated shipping liner. We are up >100% in half a month. The IPO failed to generate interest despite its amazing prospects. Oddly, the roadshow was horrible but we quickly understood Zim wasn't interested in raising capital
After our due dilligence reading the prospect and talking with the bookrunners,we didn't understand how that was possible.We regret not buying enough shares, but we felt it was too good to be true. ZIM will be debt free by mid-2021 and was trading below 2x
maritime-executive.com/article/zim-s-…
The company will publish its first results next Monday premarket. We are super optimistic as we believe Zim will make $3EPS in Q420 and around $5EPS in Q121. Consensus is still too far from those figures.
Jefferies: $3.4 Q1
Clarksons: $1.4 Q1
Barclays: $3 FY21
Goldman: $8.6 FY21
Read 4 tweets
Gabriel Castro, CFA Profile picture
16 Mar
¿Aplicar value investing a la renta fija? La mayoría de inversores se pierden un mundo emocionante centrándose solo en renta variable. Nosotros estudiamos la estructura de la empresa y decidimos el segmento más interesante para invertir según el binomio rentabilidad/riesgo. Hilo
La famosa Aryzta. Empresa que analizamos antes de la entrada de Cobas y descartamos inicialmente al considerar que había upside, pero con un riesgo excesivo. Hasta Agosto de 2019 no tomamos posición y en 2020 incrementamos para votar en la junta

Sin embargo, el verdadero dinero lo tenemos en los híbridos (deuda perpetua). Todo se remonta a 2013-2014, en un momento donde la compañía tenía demasiada deuda pero quería seguir creciendo a través de M&A (con poco sentido estratégico como Picard)
Read 12 tweets
Gabriel Castro, CFA Profile picture
15 Mar
$ARYN Tras publicar el acuerdo con Lindsay Goldberg para vender el segmento de NA por €712M, la compañía presenta unos excelentes resultados (€124.8M EBITDA) batiendo ampliamente al consenso (€102M EBITDA). Call muy bullish! Algo ha cambiado...

La venta se produce a un precio superior al que esperaba el mercado. Había mucho pesimismo por parte de los analistas. En Diciembre os adelanté nuestras estimaciones: €700/850M. Las cifra final ha quedado en la parte alta al no incluir LATAM

El nuevo equipo directivo ha conseguido darle la vuelta a la situación en un tiempo récord. Generación de FCF a pesar del entorno COVID y mensaje muy bullish para los próximos 18 meses. Elliott quería aprovecharse de la situación y "robar" el negocio a un precio ridículo.
Read 5 tweets
Gabriel Castro, CFA Profile picture
9 Mar
Pax Global Technology went down 24% from its recent highs last Feb 16th. Despite the 112% price increase since our first report, overperforming, by far, all indexes I consider the stock cheaper than last Nov 2019 when @nmahtani91 and I published our first report.
Market misunderstands Pax. They think Pax is a COVID and tech play and the business will be negatively afected by rates raise or economy reopening. In fact, the stock traded down in line with Nasdaq. I guess the fact that Pax's name is Pax Global Technology doesn't help
Quite the contrary, Pax profits are still very depressed because Pax end clients are physical retailers and the company is trading at <7x PE. Unfortunately, due to listing rule, Pax is not allowed to repurchase shares. Pax will report its earnings during the week of March 22nd
Read 4 tweets

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