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Value Investigator

30 Apr, 13 tweets, 4 min read

New Position:
Hello Fresh Group $HFG

A great business with a long growth runway at a (very) reasonable valuation.

• trades at 24x 2020 FCF
• guides for 40% growth this year
• 2021 price sales of 2.3
• targets ebitda margins of 15%, up to 20% long term.

Grew 56% prior to Covid, clear COVID winner with 100% growth in 2020, but based on preliminary Q1 numbers it’s clear they don’t stop here. Based on very strong Q1 data $HFG guides for 35-45% growth this year (they used to underpromise and overdeliver)

The business model is very sticky. Not like saas, but much better than traditional e-commerce. I have friends in Germany where $HFG originated that use it non-stop since 4ys and are very happy.

The opportunity is massive. Only 5mn customers so far

Hello Fresh is the clear leader in its category and it’s gaining share. If Germans are good at one thing, it’s grocery logistics and execution (see what Aldi and Lidl did to incumbents)

First mover advantage. Good luck competing with that if you’re a new startup.

Growing organically...

...And through acquisitions

Growing the TAM by entering new markets. Check out what they do to goodfood market in Canada.

The business is very sustainable. Sourcing directly from producers (and it’s profitable of course)

Long growth runway, strong profitability, and plenty of optionality.

The business model fits perfectly into the convenience economy. Saves a lot of time to think about what to cook and to buy the stuff. Tastes great. Makes life’s of hard working people much simpler (and healthier).

€5.13 per meal per person in Germany currently. Good value IMO

A good meal kit is essentially online grocery +.

Pure online grocery = access to a gym

Meal kits = personal trainer

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More from @value_invest12

Value Investigator

@value_invest12

27 Apr

Back in Prosus $PRX.AS
• trades at a 33% discount to its 29% stake in Tencent.
• €16.5bn in cash
• €9.3bn in delivery hero (25% stake) and mail.ru (27% stake)
• ~ €29bn stakes in private companies (at a 7.5x revenue multiple)

-> 46% discount to NAV(!)

Tencent can sell its tencent stake without paying capital gains tax. And tencent has already done so. There is hence no rational reason for this excessive NAV discount.

https://twitter.com/value_invest12/status/1386789490858106880

The investment thesis for the next years will heavily depend on tencent. I am confident tencent is at least a double over the next 5ys.

https://twitter.com/value_invest12/status/1386789490858106880

Read 5 tweets

Value Investigator

@value_invest12

7 Apr 20

I’m on a discount-to-NAV shopping spree.
During crises, some listed investments fall way more than their underlying net asset values (NAVs). Value stocks, defined as those with the highest discounts to NAV tend to outperform over the cycle (the P1 portfolio in the picture below)

https://twitter.com/value_invest12/status/1246119944695230464

1) Simon Property Group
NAV: $168
Share price: $62.57
Discount to NAV: 62.8%

NAV is the average analyst estimate from the last 3 months (which is likely to come down significantly).

https://twitter.com/value_invest12/status/1246119944695230464

2) Macerich
NAV: $36
Share Price: $8.13
Discount to NAV: 77.5%

NAV is the average analyst estimate from the last 3 months.

Read 13 tweets

Value Investigator

@value_invest12

16 Jan 20

Bought an immaterial position in a hated stock to learn more - Beyond Meat. Mission driven, focused company. Product is “right” in a number of ways. At 16x annualized sales it’s expensive, but the type of company that may never be cheap. 250% growth, profitable. $BYND

Core product is plant-based meat. Basically the first real meat-like vegetarian burger patty. But they also do sausages, chicken nuggets, etc. Unlike previous vegetarian meat replacements, Beyond has it all, taste, texture and nutritients are all very meat-like.

The products are strongly appealing to vegetarians, vegans, and people who want to eat less meat. Especially for the last group I consider it the perfect product. The market could be huge and expanding. Annualized sales of $400 million may be just 1% of the addressable US market.

Read 14 tweets

Value Investigator

@value_invest12

25 Nov 19

Bought a starter position in Match Group. Here’s why:

1) Tinder! If you’re single, try it. Women get a ton of attention, while men get to fish where the fish are, spending boatloads of money to stand out. 5 mil. subscribers, and thus IMO a very, very long growth runway. $MTCH

2) Online dating used to be a local, or at least a country-level thing. Tinder is has changed this. We’re living in a more and more globalized world, people come around a lot. No matter where you’re from, if you’re up for a date, Tinder is the place to be. Winner takes it all.

3) In it’s early days, Tinder had a hookup image. Today it’s still used for that (or at least some may hope for it), but the spectrum has expanded: killing time, finding a partner, or just like-minded people in new places. Below is the 5y google trends; note the tipping point:

Read 9 tweets

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