Yearly Archives: 2023

Israel is currently going through an extremely challenging period, perhaps the most difficult since I arrived in Israel over 30 years ago. During such a challenging time, I want to express my hope for the swift return of all hostages, the defeat of Hamas, and the safe return of all soldiers.

In times like these, it’s important to continue focusing on routine matters. Therefore, I have chosen to write several posts and updates about companies that I find very interesting. In the stock market, it is also a challenging period, with small stocks seemingly uninteresting, while good reports are ignored, and mediocre reports result in extreme declines.

I have decided to write about three companies that I have been holding for some time and also present an interesting new idea for a company traded in Israel, but with most of its sales in the East and the United States.

In the upcoming posts, I will write about more companies and share thoughts on the market. I hope you find value in the content.

PLUS500 – Trades on the London Stock Exchange with an approximate market capitalization of $1.5 billion, the company holds around $875 million in net cash. While not all cash can be distributed, I believe that at least $400 million is surplus. In the past few years, the company has operated with a much lower net cash of around $300 million. In other words, Plus500 currently trades at a P/E of 2 excluding cash and around a P/E of 4 excluding surplus cash while the company aggressively buys back its own stocks.

 

Additionally, the company has initiated operations in the US, introducing a new trading platform for retail customers in the US futures markets, forming the Group’s B2C business in the US. The company has also obtained a license to operate in the Emirates, which is expected to be a strong geographical area for the company’s operations.

If we look at the last six years of operations, excluding the extraordinary year of the Covid pandemic, the company has achieved a net profit of around $300 million per year. Even in 2023, which seems to be the less volatile year, Plus500 is expected to make a net profit of $250 million.

The question naturally arises: why is this the situation? I believe that the main reason the company is less attractive to investors as it is not growing significantly, the markets is less volatile, when VIX approaching it lowest levels in years, and the company needs to invest to acquire new clients, all while facing regulatory challenges. However, looking at Plus500’s numbers, it appears to be a company capable of ceasing marketing spendings entirely and still making a net profit of $550 million per year for at least 3-4 years.

I personally think Plus500 should trade at around 9 times its representative net profit of $300M, with an additional $500 million surplus, giving the company a value of $3.2 billion or double its current price. If shares do not appreciate in the next few months, it will trade around 1 P/E excluding cash at the end of 2024 that will cause a total absurd. Should be mentioned that Plus 500 was at much less favorable financial and regulatory situation during past decade but still delivered exceptional returns to shareholders

SLYG

Shelly is still one of my favorite investments despite the significant appreciation at share price over the past year. The company has a highly growing niche, a unique line of products in the IOT market, exceptional management, and a loyal customer base. Shelly presented till now (9M of 2023) impressive results in the not-so-easy market in 2023. In my model, I assumed lower growth than the company’s and analysts’ expectations, lower gross profitability, and still, the company is trading at a P/E multiple of 16 for 2024 and a P/E multiple of ∼11.5 for 2025.

A similar company that comes to mind is XPEL, which has always traded at much higher multiples, even though I personally think Shelly’s business is better, and the optionality is higher.

The company’s advantages lie in its extensive product line, significantly lower R&D costs compared to competitors, a growing market, optionality for SAAS revenue and a founder passionate about the company’s products. There is also a catalyst in the form of Uplisting and the company’s inclusion in a technology index in Germany.

In a few months, the company will be listed on a normal exchange in Germany, and I believe will lead to price appreciation.

During last weeks we saw some big blocks on sale while we didn’t succeed identify who is selling I personally think when those blocks will end shares will appreciate materially

BELFB

A company operating in the field of discrete components, I’ve mentioned it several times on Twitter. Bel Fuse continues to publish excellent reports and trades at significant valuation gaps compared to competitors such as LFUS, CTS, and APH. The company is traded at a simple earnings multiple of 9, while the entire industry is above 20. Surprisingly, BELFB’s verticals are better than those of competitors and less exposed to recession, thanks to high exposure to the defence, railway, and aerospace sectors. The company will also benefit from the global trend of electrification.

It’s important to remember that this year’s multiple doesn’t truly represent since many of Belfb customer still holds lifted inventory which will be cleaned in few months.. When Belfb returns to growth next year and reconstructing costs will disappear, the multiple is expected to decrease even further. Personally, I think Bel Fuse could be a very interesting acquisition target for a potential buyer or a PE fund.

QLTU.TLV – Qualitau Ltd. MC ~80M$

Qualitau Ltd. is a company listed on the Tel Aviv Stock Exchange (TASE) that operates in the semiconductor testing industry. While the company is registered on the Israeli stock market, its primary operations and revenue streams are not directly connected to Israel. With a market capitalization of $80 million, Qualitau is profitable, growing, and operating in one of the interesting fields of semi testing environment

Business Overview: Qualitau specializes in providing testing solutions for semiconductor wafers. The company conducts flow tests to ensure the functionality of individual chips located on wafers. Its clients are private and public companies involved in the manufacturing and design of semiconductor chips. The majority of the world’s chip manufacturers are customers of Qualitau. Additionally, many clients have made repeated purchases of the company’s systems and services.

Despite its relatively small size, Qualitau is considered a global leader in its niche, focusing on testing at the wafer level. At it annual reports Qualitau mentions FORM, a U.S.-based firm with a market capitalization of $3 billion, as one of its main competitors.

Market and Growth: The market for wafer testing equipment is currently valued at almost $2 billion and experiences a growth rate of 5-6% annually.I personally think the growth rates will be much higher in the next few years due to chip act at USA, investments at Japan, and Chips war between nations.

Due to the miniaturization of chips, the quantity of defects in production increases, leading to a higher demand for parameter testing in the wafer fabrication process. Qualitau also begins to operate in the backend market, which is twice the size of the wafer testing market.

Qualitau sells its products in regions such as East Asia, Europe, and the United States, with its manufacturing sites located in the U.S.

Financials and Valuation: While the company operates in one of the most attractive niches in the semiconductor industry, its multiples present a company at distress or company operates at cyclical environment like coal producers.

Qualitau is currently trading at a P/E of around 7, ex cash P/E of 5 while all semi in world trades at multiples higher than those of S&P500 . The closest competitor, Form, trades at a adjusted P/E around 30 and a normal P/E of 70 while growing much less than Qualitau and with lower gross margins.

So question raised why Qualitau still trades at such valuation?

Approximately 60% at 2023 of the company’s revenue comes from China, and the ongoing U.S.-China trade tensions pose a risk to Qualitau’s operations. Some orders was delayed by USA regulator and was released after few weeks. Last order delay caused company to lose around 25% of it market cap in few weeks, only to be announced that orders were approved to deliver few weeks after.

China risk is not unique to Qualitau all semi companies worldwide have such risks but they not trades at net multiple of 5, honestly speaking all semi companies worldwide trades at pretty lifted multiplies.

In addition to the China exposure risk, the company is listed on the Israeli stock exchange, reporting in Hebrew, has low institutional holdings, and most of its investor base consists of private investors and small funds that don’t appreciate its competitive advantages and mostly focus on profit for a specific quarter.

Catalysts for Value Unlocking:

We are pushing the company to publish reports and presentations in English, opening the opportunity for international investors to understand and engage with Qualitau. Additionally, the U.S. government announced a chip act program for bringing back semiconductor manufacturing to the USA, with significant budgets allocated to building fabrication sites. This could serve as a substantial tailwind for Qualitau in the coming years. A recent large order from the U.S was announced few weeks ago and is just the beginning of the tailwinds the company will experience in the next few years when Japan and Europe also increase their budgets.

In addition, we think the company can be a good acquisition target, and based on our checks, some companies have showed interest on it business.

Risks: The primary risk for Qualitau is the potential halt of sales to China. However, this is a global risk affecting all semiconductor companies trading on NASDAQ, and Qualitau’s products, honestly speaking, are not a threat to national security.

Conclusion: Qualitau is currently trading at a P/E multiple of 6 for 2024, with a P/E multiple of 4 after considering the excess cash returning to shareholders in the form of dividends and buybacks. Despite being a niche player, the company is a leader in semiconductor testing, demonstrating growth potential and gross margins exceeding 60%.

Link to company reports Link

 We may hold shares at companies mentioned and the research is not a recommendation to act

I want to present a company that I see as one of the interesting opportunities in today’s markets. It combines growth, quality, and stable business, new management, a large holder entering the board, and a positive business environment cycle. Meet Sylogist (SYZ.TO), traded in Canada with a market capitalization of 180 million Canadian dollars and an average daily trading volume of 250,000 dollars.

The Business

The company develops ERP and CRM products for three main verticals. For the non-profit sector through the SylogistMission division, for the education and schools sector through SylogistEd, and for municipal services through SylogistGov. In each field, the company has many clients, mainly in the USA and Canada.

Looking at the revenue breakdown, approximately 36% of the revenue comes from the Non-profit sector, around 32% from ED, and around 16% come from GOV.

Another 15% comes from verticals in other areas.

The ERP & CRM segment for organizations is very sticky business, as changing a provider brings significant headaches. Of course, it’s not just a gut feeling; it’s also reflected in the numbers. The churn rate is the lowest within SAAS companies and mostly comes as the last choice by the end customer. Customer retention rates for companies in this sector are even higher than those of Salesforce.

Source – Canaccord Research

Sylogist product and customer support are of good quality and continuously improved during last years . For example, here’s an excerpt from one of the support calls I read at Tegus:

“Yes. So the software is good. I mean, it really is a Microsoft product. And Microsoft like when they initially came out with Excel, not to date myself, it was horrible. But over time, they made a really good product, and pretty much that’s the industry standard. And I feel like Microsoft has generally improved quite a bit over the last 10 years on what they provide, that makes Serenic that much better. But I have to say their customer support is way better than any other software products that I’ve dealt with”

Brief Review of Sylogist products

Sylogist ED is an education software for managing accounts, student registration, billing, and more. Sylogist entered the education software field in 2017 with the acquisition of K12 Enterprises, and in 2021, they acquired MAS, which accounts for 85% market share in the school and education institutions sector in Oklahoma. In the conversation we had with Bill, the CEO of Sylogist, he explained that a number of private equity firms wanted to buy MAS at much higher prices, but the CEO of MAS didn’t want to sell. Only his personal acquaintance with Bill and a promise to preserve the product led to the deal.

Sylogist has significantly improved the product and offer during the last two years, and they are now expanding into more regions. The product went live in North Dakota in July. A government incentive program will lead to increased budgets in the software upgrade sector and serve as a catalyst for growth. In our conversation with the CEO of Sylogist, he mentioned that many schools still use outdated local software and are looking to upgrade to the cloud. In the recent conference call, the company also highlighted that they see a very strong business environment.

“On the SylogistEd side, following the successful lift and shift of our software platform from Oklahoma to North Carolina in a top-10 school district in North Carolina, having gone online on live on SylogistEd right on schedule. We are seeing several other districts leaning into follow suit. I see us as very well positioned to accelerate in North Carolina over the next 12 months and elsewhere in the back half of ’24.

As I’ve said before, we’re just getting started in the SylogistGov and SylogistDev markets and the value creation opportunity we see ahead is large, very large.”

According to Gartner, IT budgets for educational institutions are expected to increase by 9% annually until 2026, which is expected to support Sylogist’s organic growth. The company’s major competitors in the field are PowerSchool and Tyler, which focus on larger districts compared to Sylogist.”

SylogistMission provides SaaS-based ERP, CRM, and analytics solutions

for non-profits organisations. Company products built on Microsoft dynamics 365 and include verticals like fundraising, payroll and grant management.

There are over 1.5 million non-profit organizations in the United States, with around 120,000 of them having a budget of over 1 million dollars per year, making them potential customers for Sylogist.

The intriguing aspect of this segment is that the direct and major competitor, Blackbaud, has an outdated product that was developed many years ago and hasn’t been upgraded since. Blackbaud is undergoing a massive process of contract renewal with quite aggressive price increases, creating a good potential for Sylogist to gain market share.

Another interesting story is that the largest shareholder of Blackbaud, Clearlake Capital, intends to take the company private with an offer of $71 per share or around a multiple of 13 times EBITDA. The board has rejected the deal and will likely be busy with proxy battles, making it unlikely to change direction at this stage and invest more in the product.

 

SylogistGov is a 100% SaaS solution for municipal and local governments. It offers three unique cloud-based solutions, that drive efficiency with Microsoft Dynamics 365. Among these offerings are SylogistGov ERP, tailored for local government needs, SAVIN, an advanced victim notification system, and Grants Manager, streamlining award and grant management processes.

From our conversations with the company and several organizations, we’ve learned that many government organisations are using very outdated systems and are in need of significant upgrades. The incentive program of the U.S. government will serve as a significant catalyst in the coming years.

“US government through the American Rescue Plan Act authorized a $350B stimulus for State and Local governments, a majority of which remained undeployed. The deadline for obligating/budgeting funds is December 2024 and the spending deadline is in December 2026. State and Local governments have spent 45% and 38% of the funds allocated, respectively, which implies there could be a strong tailwind from deploying the stimulus over the next several years”

There’s also an additional 15% of the revenue that comes from providing services to various entities in the field of system implementation consulting, payments, payroll, and more.”

Revenue Structure

 Approximately 60% of the company’s revenue is categorized as recurring revenue, with around 65% of that recurring revenue being true subscription-based revenue (SAAS). The company anticipates increasing its share of recurring revenue in the coming years. The remaining 40% of non-recurring revenue is also relatively sticky, as it involves system upgrades and support based on licensing.

The company operates under the Rule of 40, where the sum of organic growth and EBITDA equals 40. The company’s growth forecast is in the double digits for the near future, with expenditure increases being controlled.

Management

CEO Bill Wood joined the company in late 2020. He was one of the founders of Blackbaud and possesses extensive knowledge in the Non-Profit sector from previous companies. He has been the driving force behind the recent changes within the company over the past year.

In May 2023, the company strengthened its executive team further by appointing Sajeet Kini as CFO. Kini brings significant experience in software companies and SAAS enterprises.

The primary investor in the company is Pender Fund, holding a 14% stake. They have also recently gained representation on the board. It is always good to see board representation with someone aligned with the shareholders.

Financial Data

 

It’s evident from the financial data that the company experienced minimal growth between 2016 and 2021. However, after the change in management, it reverted back to a significant growth trajectory, both organically and through acquisitions. The management forecasts a double-digit organic growth rate and additional growth through acquisitions.

Why do I expect shares to rerate?

I hope I’ve convinced you that it’s a good business, with stable revenues and growth, both organic and through acquisitions, very capable and ambitious management, and it’s trading at an EV/EBITDA multiple of 10 for 2023, 8.5 for 2024 and around 12 EV/FCF for 2024 , which is roughly half of most competitors despite a much better growth profile.

Source –Canaccord Research

But what’s the story? Why will investors rerate it?

Looking at Sylogist’s financial profile, it seems that the company barely grew between 2016 and 2021, generated around $35 million in revenue, approximately $23 million in gross profit, and about $13-16 million in EBITDA. Yet, how much the market was willing to pay for such a business at those five years?

The business has been traded mostly above $11 (with almost the same share count) and even reached $17 in 2021, which is about 50-60% higher than today’s price, despite the fact that its financial data was much less favorable.

This business generated 40% less in gross profit and still traded at a premium of at least 50% over today’s price—okay, what’s happening here?

The story is simple: Bill, the new CEO, understood that he had a great business on his hands, but he needed to invest in it for the years ahead; otherwise, they wouldn’t capture market share and might even lose customers. Due to the favorable business environment and growth prospects, they decided to cut dividends and invest in growth. This decision makes great sense to a savvy investor who understands how growing SAAS companies are rewarded. However, those who held SYZ stocks consisted of some passive dividend funds. Before the decision, the company had a high dividend yield. In addition, the company is categorized as SAAS and didn’t drop significantly until mid-2022, in contrast to its peers, which created a rebalance within people’s portfolios. All of this contributed to the price spiral, all while the business was improving.

A change in shareholders base can indeed be a very painful experience, and despite all the improvements in the company’s business, the stock remains undervalued compared to its true worth. Why did people pay considerably more for a mediocre business just a few years ago?

Keep in mind that today this is a company generating over $40 million in gross profit and decides how much to invest based on attractiveness. The company could have reverted back to its expenditure levels from 2016-2020 and achieved an EBITDA of $30 million and a free cash flow of $25 million, but is that the right course of action?

It’s essential to evaluate these decisions carefully. Companies often weigh the trade-off between short-term profits and long-term growth. Making aggressive investments might result in slower short-term profits and cash flow but could position the company for stronger, sustainable growth in the future. The market’s reaction might not always immediately reflect the value being created by these investments.

Deciding between maximizing immediate profits and investing for long-term growth is a complex strategic decision that depends on the company’s goals, market conditions, competitive landscape, and investor expectations. It’s a trade-off that many companies grapple with, and there’s no one-size-fits-all answer.

Ultimately, it’s important for the company to communicate its strategy effectively to its investors and stakeholders to help them understand the rationale behind their decisions.

It seems like Sylogist is at a turning point. The company has made significant improvements in its product, support, and cost management. With the new CEO’s efforts to push the product, market it more aggressively, and invest in its development, there’s a strong expectation of growth in the coming years.

The company is gaining traction among investors and has hired new IR services, indicating a growing interest among the investing public. The robust business environment also contributes to this positive outlook. I believe valuation will follow those improvements as well.

In addition to the organic value creation company’s profile might attract potential PE buyers, our discussions with the management indicate that they might not be actively pursuing such an activity right now, given the enormous opportunity to grow the business organically and the current share price that doesn’t even close to approximate fair value.

In summary

Sylogist appears to be an excellent business with a strong management team, trading at a discounted valuation due to suppressed profitability. Even with this suppressed profitability, the company is undervalued by about 40% compared to its cheapest peers despite having a more favorable growth profile and generating much better cash flow. As the company continues to grow its revenue, optimize operations, and adapt to changes, it’s expected to undergo a transformation in the next 12 months, I expect share price will rerate significantly as well.

 We hold shares at Sylogist and the research is not a recommendation to act

One of the good things that has happened to me since I opened a Twitter account is that I receive many interesting ideas from followers from different countries, whereas my own ability to come up with those ideas is quite limited. This idea came from one of my followers from Bulgaria.

Allterco (A4L) Frankfurt

Number of shares: 18,000,000

Stock price: 9.7 euros (in Germany)

Market capitalization: 175 million euros

Before I will talk about the company, a few words about the stock dynamics. It is a Bulgarian company, dual-listed on the Bulgarian Stock Exchange and also on the Frankfurt Stock Exchange. The company was listed on the Frankfurt Stock Exchange at a price of 14 euros, and quickly the stock price rose to 16 euros. However, since then, it has declined along with the overall growth stocks, and particularly after the war in Ukraine, despite the fact that the company has no exposure to Ukraine. It is a profitable company that can be valued based on a simple earnings multiple. I have been following the company for over half a year and feel comfortable writing about it after seeing several quarterly results. I also met the company’s management in Germany a few months ago and had more than five Zoom calls with the company.

Brief history

The company was founded in 2003 for the purpose of designing and manufacturing hardware systems for various cellular operators. There is not much connection between the company’s current products and how the company started, but it is important to understand the background for the continuation. In 2013, the company established its IoT division and began building the foundations of what the company looks like today. In 2015, Allterco started selling GPS tracking watches for children, known as MIKI, which still exists in the company today. The interesting product that has been the focus of most of my work is called SHELLY, and the company began selling initial products somewhere in 2018. In 2019, the company sold its telecommunications business and now focuses most of its efforts on developing home IoT products.

Shelly Products

The company manufactures IoT products for smart homes that are inserted into electrical outlets and enable control over all electrical devices in the house. The company’s products operate on Wi-Fi and come with a dedicated app that allows controlling all the devices in the house. The physical connection is relatively simple – you disassemble the socket, insert the Shelly product, and then you have the option to control and monitor every electrical point in the house.

In addition, the company’s store also offers specialized products such as variable lighting bulbs, window opening and closing sensors, smoke and gas detectors, and energy-saving products.

From the descriptions I wrote, it can be understood that the company specializes in smart home products, one of the fastest-growing niches in the world.

Market Description

It is very difficult to define the exact TAM for Allterco, but what is clear is that the company is at the beginning of the trajectory, and the trajectory itself will be long.

As can be seen in McKinsey’s graph, they talk about a growth of 12-26% depending on different segments.

In a presentation Allterco published in 2020, the company set a goal to be in 1.4% of smart homes in the Western world.

 

One of the things I love the most about the companies I choose is being in a growing market. Just like in the past with the investment in Telsis, which was in one of the growing markets in the electronics field. A growing market can compensate for many less-than-optimal management decisions, so it is definitely an important aspect in my investment choices.

The Company’s Business Model

Despite being a Bulgarian company, Allterco’s almost sole connection to Bulgaria is its development center since most of the company’s sales are made in Western Europe and the United States. The company benefits from cheap labor in Bulgaria, less competition from strong companies, and most of its sales are in euros.

In the chart below, you can see the breakdown of the company’s sales per country.

Allterco conducts all its R&D activities in Bulgaria, while the company has three manufacturing sites in China. Allterco purchases its components from various suppliers and maintains the design flexibility of its products, which allows the company to easily overcome component-related challenges. In addition to hardware, the company also develops specialized software and works on upgrading its application, but I will expand on that later.

The company’s sales model is divided into two categories: direct sales to end consumers through online stores and an Amazon store, and working with distributors. Around 30% of the products are sold through online stores and the rest through distributors. The company has a representative office in Germany, which is currently its main market, and in the future, the company plans to open representative offices in other countries.

Competition

There are several competitors in each category of the company’s products. When thinking about competition, it is important to remember that the product installed in a home can control a lot of data in the future. Therefore, there are several aspects that are very important to consider, such as user data security and where this data is stored. Therefore, I don’t see much chance for Chinese companies to penetrate this market. From my research in various developer forums, I think Shelly enjoys several advantages:

1. Software automation
2. Product size
3. Convenient price

To determine whether a product is a commodity or a company with a specific advantage, it is important to look at the companies’ gross margins and see if there is a downward trend over time. From my investigation, Shelly manages to maintain high gross margins alongside continued growth. Shelly products are in the early stages of growth, there are several years before competition begins to impact the profits.

Here are some of the comments I found about the company on Amazon:

“This is a great device at an incredible price. Before trying these, I automated switches by replacing the entire switch. This left a lot to be desired because dedicated smart switches weren’t great. They felt and sounded like clicking a computer mouse since they used micro switches internally. By using a device like these Shellies, you’re able to use any switch you like, so I can keep the classic electrical switches I’ve grown accustomed to.”

“The stock firmware on these guys is incredibly capable compared to competitors. I was astonished. It’s not unpolished Chinese software that you may expect, it’s very well done and very capable. With the recent update, I don’t have any reason to try custom firmware like I originally expected to.”

“Before we start talking about the device, we have to talk about the cool and fast app. Shelly is one of the most important devices in my home, very practical and compatible with many automation systems. I did a review for this device on my YouTube channel, WeSmart.”

If you think these comments are random and that all products enjoy such popularity, that’s not the case. The founders of Shelly are passionate about product quality. They are technology IoT enthusiasts, and the product gains significant popularity in the developer and smart home installation communities.

To reinforce my research on the company, I met with the distributor and installer of the products in Israel. We discussed the product’s advantages, especially usability, ease of installation, and good support from the company for inquiries. In addition, the company’s products are becoming a standard in the industry, and there are dedicated chat forums where they solve issues, which increases the desirability of using the product for new installers since it save a lot of time.

Financial Numbers

Before presenting the company’s financial results and my forecasts for the coming years, it’s important to present the company’s stock forecasts that they made in 2020. It’s worth noting that during the years of the forecasts, there were the COVID-19 pandemic, the crisis in Ukraine, and concerns about inflation in Europe.

Actual results for the years 2020, 2021, and forecasts for 2022, 2023, and 2024 are shown in the table below:

It can be seen that the company has performed much better than the forecasts they gave in 2020.

Additionally, a few weeks ago, the company released forecasts for the upcoming years that, for some reason, didn’t receive much attention from the market.

Link to the company’s forecasts

A few days ago, the company published its results for the first half of 2022, which exceeded management’s expectations. In the latest publication, the forecasts for 2022 were approved.

Comparison to Competitors

The company has published in its investor presentation a number of companies with which it compares itself, such as Alarm, Vivint, and SOMFY. All the mentioned companies trades at very high profit multiples, grow slowly, and on the other hand, offer a different range of services, including subscriptions for customers.

The most relevant competitor, in my opinion, is PLEJD, a Swedish company that is growing at high rates (slightly above Allterco), specializes in the Scandinavian market, and trades at a profit multiple of over 50

Optionality

One of the points I think the market overlooks about the company is the significant optionality it offers

Allterco has sold over 6 million devices so far and is likely to sell over 6 million more in the coming years, meaning over 10 million connected devices in people’s homes. Currently, Allterco is working on upgrading its user application and plans to start offering some paid services on a subscription model starting next year. Some of these services may include troubleshooting electric devices that consume above-average energy and contribute to the electricity bill, real-time reporting of window opening or closing reprted directly to the call center, and other services. Even if, let’s say, only 10% of people want to subscribe and agree to pay a few euros per month, it represents a significant contribution to the company’s profits, as these revenues will directly impact the bottom line. Additionally, the company is working on algorithms for network fault monitoring that can cause damage to electrical devices, and it can sell that data to manufacturers. It is important to note that this optionality was not included at all in the forward projections, and I believe there is a reasonable chance of a positive surprise in the financial results.

Shareholders and Management

The two founders of the company together hold about 65% of the company, and Dimitar Dimitrov also serves as the joint CEO of the company and is primarily responsible for product development. To support business development and transition to the growth stage, Wolfgang Kirsch was appointed as joint CEO of the company. I met Wolfgang in Germany a few months ago, and he left a very positive impression on me. He is a manager who was responsible for sales at MediaMarktSaturn in Germany and significantly grew the business. He has a very well-structured work plan for the company, and as a graduate of McKinsey, he also brings disciplined methodologies and goals to the company. I particularly like the stage where the founders say that someone talented from the outside needs to take the company to the next level.

Risks

It’s important to remember that we are dealing with a small Bulgarian company with small trading volumes, so the stock may not interest anyone for a few months. Despite the possible lack of short-term interest, I am confident that as the company continues to perform well, interest in it will grow, as will liquidity. Additionally, one of the founders may want to sell some of their stocks at higher prices.

Despite optimistic forecasts and the fact that the company has met their past projections, it’s always important to remember that these are just forecasts and that the industry is highly competitive. It’s important to continue monitoring whether the company is able to execute according to their plans.

There is a risk of planning failure, as the product is connected to high voltage and any technical failure could result in costly recalls and potential lawsuits.

שנת 2202 הסתיימה לפני מספר ימים וזאת הייתה שנה מאתגרת מאוד לכולם. שנה שהתחילה כמו עוד שנה, בה הייתי אופטימי על החברות בפורטפוליו, הסתיימה בירידה חדה מאוד בחלק מהמניות. מה שעוד יותר מתסכל שהחברות עצמן הציגו ברובן דוחות שיא, ולמרות זאת ירדו עשרות אחוזים בלי קשר לכלום. ההרגשה הייתה שוב ששום דבר לא משנה ואנשים רק רצו למחוק שורות ולצאת מהמניות.

כמי שפועל בשוק הישראלי, הפחות נזיל, כבר לא מעט שנים, אני מודע כמובן לחוסר הנזילות שתוקפת את השווקים המקומיים לפעמיים, אבל העוצמה של הירידות בחלק מהמניות הפתיעה גם אותי. כמובן שניצלנו חלק מההזדמנויות לשנות פוזיציות ואני מעריך שהפחד של היום זאת ההזדמנות של המחר.

לקראת השנה החדשה אני רוצה לחלוק מספר מחשבות על חברות שהזכרתי בעבר וקצת עצות לבעלים. אנחנו נמצאים בעולם השקעות מאתגר, בעולם החדש זול כבר לא מספיק ובעלים שרוצים לייצר ערך לבעלי מניות צריכים גם לחשוב מחוץ לקופסה ולפעמים גם להתאמץ הרבה יותר. לפעמים בטווח הקצר הדברים שהם יעשו לא יובילו לתוצאה הרצויה, אבל הם יבנו אמון עם המשקיעים ובטווח הארוך הדברים ישתלמו מאוד.

תיגבור

בתיגבור חווינו ממש רכבת הרים החברה פתחה את השנה סביב שער של 45 שקל ששיקף לחברה שווי של 420 מיליון שקל, ותוך חודשיים שווי החברה עלה לכמעט 700 מ’ שקל, רק בשביל לרדת כל הדרך חזרה ל-270 מ’ שקל. העניין שהשוק ממש רצח את המניה למרות שהדוחות לדעתי, לא היו רעים. אני רוצה להסביר לקוראים מה מקבלים עבור ה-272 מיליון שקל שווי.

עסק תפעולי

כל מי שכתב שדוחות של תיגבור היו מאכזבים השנה מפספס לגמרי לפי דעתי

 

 

 

 

 

 

 

 

 

 

 

אפשר לראות שתפעולית החברה שיפרה את הרווחיות השנה מול שנה שעברה, כאשר שנה שעברה כללה עדיין פרויקטים של קורונה והשנה כבר לא. כלומר, בסיס ההכנסות והרווח התפעולי השנה זה הבסיס שממנו החברה תמשיך לצמוח אורגנית. ההבדל ברווחיות בשורה התחתונה נובע אך ורק מהפסד מהשקעה בניירות ערך.

אז מה כוח הרווח של תיגבור השנה? אם נתעלם מהפסדים מניירות ערך (כמו שאני מתעלם כאשר החברה מרוויחה מהתיק) נקבל שהחברה הרוויחה ב-9 חודשים סביב 21 מיליון שקל. נניח שהחברה תרוויח רק 5 מיליון נקי ברבעון 4, שאומנם חלש עונתית בדרך כלל, אבל כלל בתוכו בחירות, נקבל חברה שתרוויח סביב 26 מיליון שקל נקי ב-2022.

כרגע החברה נסחרת סביב מכפיל 10.5 על רווחים של 2022, שלא הייתה שנה מדהימה. פעילות מהלב רק עברה אינטגרציה וכמעט לא תרמה, ותתחיל לתרום יפה מאוד ב-2023. בנוסף, החברה הפסידה בפעולות אחרות שזה בעיקר תחום הניקיון ועדכנה את המחירים ברבעון האחרון ככה שהפעילות תהיה רווחית בשנה הבאה.

בחישוב המכפיל לא התחשבתי בתיק ניירות הערך של החברה בשווי של 39 מיליון שקל אחרי הירידות, ולכן מכפיל לשווי פעילות נמוך אפילו יותר.

אבל החברה לא רק זולה תפעולית היא כוללת בתוכה נדל”ן, שלפי דעתי מכסה חלק נכבד מהשווי של החברה היום.

נתחיל עם הקרקע ברחוב דויד חכמי בתל אביב:

“ביום 20 במרץ 2018 התקשרה החברה עם שתי חברות: חברת רובינשטיין וחברת מכשירי תנועה בהסכם שיתוף לאישור תב”ע לאיחוד החלקות של החברות והקמת בנין משרדים, תעסוקה ומסחר ב ן כ-42 קומות. ההסכם מסדיר את התכנון, ההקמה, הבניה המשותפת וניהול הפרויקט וכן את החלק היחסי של כל צד בפרויקט. החברה, בעלת מקרקעין בדוד חכמי בתל אביב )חלקה 17 בגוש 6950 .)חלקה של תגבור הינו %92.12 מסך הפרויקט או 750,7 מ”ר כגב וה מבניהם, לפני מטלות ציבוריות”

החברה עובדת על קבלת אישור תב”ע לבנית מגדל בן 42 קומות בלב תל אביב. התב”ע צפויה להתקבל בחודשים הקרובים. עסקאות דומות לדוגמא זאת של סלע נדל”ן נותנות לחלק של תיגבור שווי של 180 מיליון שקל למשרדים אחרי יזום.

כמה יעלה לבנות את המגדלים? לפי הערכות שלנו סביב 8 אלפים שקל למטר זה מחיר סביר, שזה אומר הוצאות של 62 מיליון שקל ליזום. אני חושב שתיגבור יכולה לממן על ידי תיק ההשקעות שלה והלוואה קטנה. כמובן שיהיה גם מס שבח, ומס רווח יזמי אבל היזום של הבניין יוביל להצפת ערך של 60 מיליון להון העצמי לפחות.

העניין הוא שתיגבור לא מתכוונת בשלב זה לפחות למכור את משרדים אלא להשכיר אותם למרות שכמובן שערוך מחדש של היזום יקבל ביטוי בדוחות. תשואת שכירות של 6% בלב תל אביב נראית סבירה גם בזמנים של ריבית עולה ותזכרו שהמשרדים יהיו מוכנים רק עוד כמה שנים ולכן תיגבור תוכל לקבל סביב 11 מיליון שקל דמי שכירות.

תוסיפו לזה את הבית חולים שרשום בספרים לפי הערכת שווי אחרונה ב-51 מיליון שקל ומניב לתיגבור 2.5 מיליון צמוד מדד בשנה וכולל בתוכו המון אופציות להרחבה ובניין בפינסקר שמניב חצי מיליון שקל שכירות ורשום בספרים לפי 15 מיליון שקל. מקבלים חברה עם נכסים מניבים לא קטנים שיכולה להגיע לffo- של 15 מיליון רק מהנדל”ן ובלי מינוף. מכפיל 9 לתזרים הזה יתן לפעילות הזאת שווי של 135 מיליון שקל, וגם זה שמרני במידת מה בגלל שהבניין של פינסקר בכלל לא מניב את מה שצריך בשלב זה, וגם הבית חולים כולל זכויות הרחבה ששוות כסף.

אנחנו חושבים שהפרדת פעילות הנדל”ן המניב מפעילות המסורתית של סיעוד תוביל להצפת ערך מיידית של עשרות אחוזים וזה אחד הכיוונים שנמשיך לפעול מול ההנהלה לצד רצון לראות המשך שיפור בצד התפעולי. חשוב לזכור שגם בחלק של הרכוש הקבוע בתיגבור יש משרדים שלא משוערכים לשווי האמיתי וגם אותם אפשר להוציא לזרוע של הנדל”ן המניב ושהחברה התפעולית תשכיר אותם.

לסיכום

ההשקעה הזאת יושבת הן על המשך שיפור העסק ברמה התפעולית, ולחברה יש את הרוח הגבית בדמות הזדקנות האוכלוסייה, ולצד המשך השבחת החלק של הנדל”ן והפרדתו מעסקי הליבה של החברה. אני מאוד אופטימי על החברה לשנים הקרובות וחושב שזאת אחת ההזדמנויות המעניינות בשוק המקומי במיוחד אם המשק יכנס למיתון ועסקי החברה לא יפגעו.

אשראי חוץ בנקאי

איך מגדירים סערה מושלמת? מה שקרה לחברות בענף החוץ בנקאי בשנת 2022. לא צריך להזכיר כמובן את הפרשיות של גיבוי ויונט שהובילו לאיבוד אימון מוחלט בקרב המשקיעים. היום כשאני מזכיר את החברות האלו בפני משקיעים אחרים התגובות נעות בין עזוב אותי לא מעניין, לבין בוא נראה מה יהיה עוד חצי שנה. הגופים המוסדיים לא לרוצים לקחת אחריות שישקיעו בחברה שתהיה ההונאה הבאה ושמם בטעות ישתרבב לחברה, וכך נוצרה סיטואציה שיש בשוק אין סוף מוכרים ואין קונים.

תוסיפו את עליית הריבית, מחשבות לגבי מחירי הנדל”ן, אג”חים של חברות האח”ב שנסחרות בתשואה חד ספרתית גבוהה או אפילו דו-ספרתית וקיבלתם את המתכון המושלם לריסוק מכפילים בענף. משקיעים שבעבר חשבו שמגיע לחברות מכפיל דו-ספרתי בגלל הצמיחה הגבוהה ותשואה גבוהה על ההון, היום לא מוכנים לשלם גם מכפיל 8.

כאשר אני נתקל בבעיה כזאת ובכזה חוסר אמון של השוק אני מנסה לפשט את הבעיה ולהסתכל עליה בצעדים מופשטים, ואז לראות האם התזה שלי מחזיקה עדיין מים ואולי אני זה שטועה? כמו שאז בעין הסערה כתבתי את הפוסט על אטנטו- לינק.

השאלה המרכזית במקרה של חברות שנואות ושנמצאות במשבר שצריך לשאול האם צריך את המוצר שלהן? בלי תשובה חיובית לשאלה הזאת קשה מאוד להתקדם.

אני אישית חושב שבלי חברות שיעשו ניכיון, המשק יכנס לקטסטרופה של נזילות שתוביל לעצירה כמעט מוחלטת של ענף הבניה וחלק גדול מהתשתיות. לכן, לדעתי התשובה ברורה שמימון הון חוזר ליזמים וקבלנים הוא קריטי להמשך תפקוד תקין של המשק.

הרבה פעמים שואלים מדוע הבנקים לא יתנו את המענה הזה, והתשובה היא מאוד פשוטה, הבנקים לא רוצים את הלקוחות האלו בסניפים שלהם. חוץ מזה שבנקים היום מקטינים סניפים, הם פשוט לא יוכלו לתת שירות מהיר וטוב לפועלים שיבואו לסניפים שלהם. בנוסף, הבנקים מעדיפים לתת מסגרות לחברות החוץ בנקאיות עם ערבות אישית של הבעלים, ולהוריד מעצמם גם את האחריות החיתומית וכמובן לפתוח את התחום לתחרות ולא להסתבך עם הרגולציה.

אחרי שאני מבין שלפחות לגבי המוצר אנחנו לא נראה מה שאמריקאים אוהבים להגיד Disruption של השוק אני ניגש בצורה קרה להסתכל על המצב.

היום אפשר לקנות את שוהם במחיר יותר נמוך מאשר החברה נסחרה בזמן הקורונה, ששם חששתי מאוד להמשך העסק. אני חושב שהחוסר רציונליות בכל מה שקורה בסקטור, נובע אך ורק מפרשות גיבוי ויונט. דווקא אחרי הפרשות הללו, אני חושב שכולם בדקו הרבה יותר לעומק את כל מה שקורה בחברות. אם חצי שנה אחרי לא צצו פרשות חדשות, להערכתי הסיכון של החברות נמוך יותר.

בנוסף, אחרי הפרשות של גיבוי ויונט השוק עובר טרנספורמציה. חברות לא מקבלות כסף בקלות, ויוצאות מהשוק. למשל נאוי הפסיק לחלק כסף למנכי-משנה כמעט לגמרי, בנקים גם בחרדות, ואז כל השחקנים הפרטיים שגם ככה היו בבעיה של חוסר חידוש רישיונות פשוט יוצאים מהשוק.

כאשר יש שוק שחייב את המוצר, תחרות קורסת ואין כבר ויכוח על מחירים, והחברות נסחרות במכפיל חד ספרתי נמוך אני אופטימי. אני לא טוען שלא יהיו דיפולטיים בחברות, זה חלק מהעניין. אבל לפי דעתי בלי פרשיית גיבוי החברות לא היו נסחרות במחירים דומים במקצת למחירים של היום, אני חושב שיש המון חוסר רציונליות במחיר כיום.

מה שמאכזב אותי בחברות שאנו מחזיקים, שוהם ובול מסחר, שהבעלים לא מספיק דומיננטיים כמו במלרן למשל. ברור שאם הם ירכשו מניות, זה לא יעזור בשלב הראשון, אבל זה ייתן ביטחון למשקיעים להמשיך להחזיק את המניות וכן לתמוך בחברות בהמשך הדרך.

הייתי מצפה הן מאלי נידם והן מרונן בכור, כמו שהם מבקשים מאיתנו תמיכה בכל מיני נושאים, להיות הרבה יותר אגרסיביים כשצריך.

 רפק

מניית רפק ירדה בחדות במהלך חודש דצמבר, מה שיצר הזדמנות נדירה להגדיל פוזיציה באופן משמעותי. העניין שהירידה הייתה בלי שום הסבר הגיוני, ודווקא לאחר סגירת העסקה מול ג’ניירישן וירידה בסיכון. בואו נבדוק מה רפק “צריכה” להיות שווה באמת.

פעילות	שווי מוערך
מכירת פעילות תחנות צפוניות וחופיות	382 מ’ מחיר מכירה רווח צפוי של 180 מ’, כלומר מס של 40 מיליון לכן נטו החברה תקבל 342 מיליון שקל
תחנת MRC	בהערכת שווי האחרונה של ג’ניירישן הגיעו לשווי של 232 מ’ חלקה של רפק. חושב שזה די שמרני בגלל שלקחו ערך גרט באפס, אבל מספיק טוב כרגע
אלמור (חברה נסחרת) מחזיקים 48%	שווי שוק של אלמור 370 מיליון לכן חלקה של רפק 177 מיליון
אקסל (חברה נסחרת) מחזיקים 10.6%	בערך 15 מיליון יש עוד אופציות וזכויות נתעלם מזה כרגע
ג’ינרל מהנדסים, מיזמים סולריים ויעוץ	50 מ’ שמרני על בסיס מכפיל 6 תפעולי לפעילויות
אופציה לראיינדר	15 מ’ חלקה של רפק -אופציה לאחת התחנות הגדולות בישראל שיכולה להציף המון ערך
חוב נטו סולו רפק	50 מ’ חוב נטו
סך הכל	780 מיליון שוו נכסים

 

לפי החישוב שלי, אני מגיע לסך הכל של 780 מיליון שקל שווי פעילות של רפק לפני יזום ולפני אופציות הרחבה של MRC. שווי שוק של החברה עמד על 450 מיליון שקל לאחר התיקון של הימים האחרונים. גם אם ניקח דיסקאונט של 25% לחברת אחזקות (מופרז לגמרי) נקבל עסק שנסחר בדיסקאונט עמוק של מעל ל-30%. מה שאני אוהב ברפק שהחברה לא צפויה להיפגע במיתון, וברגע שהריבית תרד שווי התחנות יעלה בגלל ההיוון.

כמובן שאני מניח שחלק מהתקבול שרפק תקבל מהעסקה יוחזר לבעלי המניות בצורת דיבידנד או רכישה חוזרת של מניות.

לסיכום

אני לא רוצה שהפוסט יהיה ארוך מדי אז נדבר על חברות נוספות בפוסט הבא. אני אופטימי היום הרבה יותר בטח אחרי ירידות רוחביות שהביאו חלק מהמניות לתמחורים שזכורים רק בימי קורונה.

אני ממשיך לחפש כל הזמן הזדמנויות חדשות. שתהיה לכל הקוראים שנה טובה, שנה של בריאות נחת וקצת מסכים ירוקים.

גילוי נאות: אין לראות באמור לעיל משום המלצה לביצוע פעולות ו/או ייעוץ השקעות ו/או שיווק השקעות ו/או ייעוץ מכל סוג שהוא. המידע המוצג הינו לידיעה בלבד ואינו מהווה תחליף לייעוץ המתחשב בנתונים ובצרכים המיוחדים של כל אדם. כל העושה במידע הנ”ל שימוש כלשהו – עושה זאת על דעתו בלבד ועל אחריותו הבלעדית. קפלר קפיטל ו/או הכותב מחזיקים ו/או עלולים להחזיק חלק מן הניירות המוזכרים לעיל.

פרסום מידע זה אינו מהווה הצעה לציבור להשקעה בשותפות. ההשקעה בשותפות הינה על בסיס הצעה פרטית בלבד, בכפוף למגבלות כמפורט בהוראות הדין החל, ולפי שיקול דעתו המוחלט והבלעדי של השותף הכללי.