Michelmersh: A Great UK Company You've Never Heard Of

Рет қаралды 786

Күн бұрын

The video is all about a boring company by the name of Michelmersh. It covers my full analysis, including a Discounted cash flow (DCF) model. Its ticker symbol on the London Stock Exchange is $MBH
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-- Disclosure --
The video is created for entertainment / informative purposes and should not be treated as any specific inducement to make an investment or follow a strategy. The statements/opinions are based on my analysis and can change in case new information is introduced.
Of course, past performance is not indicative of future results and therefore there are no guarantees for outcome in any direction.
If you decide to trade/invest, do not forget that your capital is at risk.
This video does not take into account your particular investment objectives, financial situation, or needs and is not intended as recommendations appropriate for you.
You must make an independent decision regarding investments or strategies.
Before acting on information on this show, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.
Timestamps:
0:00 Introduction
1:34 Management's sense of humor
1:55 The broader environment
3:39 Historical financial performance
4:49 2015 vs. today
5:51 Ownership
6:45 Returning cash to the shareholders
7:47 Key assumptions
8:54 Intrinsic valuation
10:40 What if?

Пікірлер: 21

@Reciprocation_of_goodwill 7 ай бұрын

I love these type of videos

@kostadin_ristovski 7 ай бұрын

Damn, so not boring enough?

@innocenti67 2 ай бұрын

like you, I am revisiting this as i owned it a few years ago. I dont quite understand your Intrinsic Valuation. I have very similar revenue, Ebit, capex numbers but very different outcome. My DCF says its worth £185 using a 10.5% WACC, with terminal (2012) revenues 103m, Ebitda 23.7m, capex 4.1m therefore FCF pre interested 15.3m. My 10yr DCF value is £100m inc the £10m cash therefore terminal (11yr+) is £73m

@kostadin_ristovski 2 ай бұрын

Hey there, if you have similar revenue, ebit, capex, wacc, etc, it doesn't make sense to have such a large difference in the outcome. In theory, if you have a FCF of 10m/year, and you have a WACC of 10.5%, the only explanation for coming up with such a high valuation is to have a high implied revenue growth in year 10. So, either there is something going wrong in your model or you have a much higher multiple in year 10 (through high expected revenue growth).

@innocenti67 2 ай бұрын

@@kostadin_ristovski my terminal growth is 3%. It’s the same model I have used for decades as a hedge fund manager

@uncertaintyunravelled8273 7 ай бұрын

A commoditized player in a slow-growing cyclical industry tied to the credit cycle and facing a ton of competition. It's pretty much exactly the opposite of the type of company I like.

@kostadin_ristovski 7 ай бұрын

I personally don’t share that view, but I encourage disagreement. Thank you for sharing your thoughts!

@altairjb 7 ай бұрын

this is the type of company i like. Unfortunately it's in the UK, otherwise i would take a look at it myself.

@kostadin_ristovski 7 ай бұрын

I'm tempted to buy shares. Let's see what the New Year brings Joel! Would you mind sharing why the "unfortunately" part?

@altairjb 7 ай бұрын

@@kostadin_ristovski it's just the broker that I use. It does not give me access to international markets. If there are no ADRs, then it's out of reach for me. I don't feel like opening another account.

@altairjb 7 ай бұрын

It reminded me a bit of my investment in Simpson Manufacturing. I did extremely well in SSD. I just doubled my investment a couple weeks before year end. I have since sold half of my position. The run up was probably a bit too quick. I am having trouble finding something interesting at the moment. I have some cash in money markets because of that. Waiting for an interesting investment.

@altairjb 7 ай бұрын

I have an eye on Fortinet, but I don't like the current price. 2023 was phenomenal for me. Makes me a bit doubtful I can achieve the same gains in 2024. In almost 4 years, I have an annualized return of about 20% and I have no doubts it's not my expertise. I have been extremely lucky with some of my investments. But luck eventually runs out.

@altairjb 7 ай бұрын

About 60% of my combined portfolios is in small caps. I think that's where most of the opportunities are. I have made more money with some small caps than with Google that I bought at $85 in 2022.

@methioswar2916 7 ай бұрын

the share price is going nowhere. dunno why i would want to invest in it. Even with divs included they are hardly keeping up with inflation.

@kostadin_ristovski 7 ай бұрын

The goal of the video is not to convince you to invest. Other than that, fundamentally, your approach is wrong. If you judge a company based on the share price, I doubt it will lead to a performance that beats the market. In the long run, the share price reflects the fundamentals of the business. If the earnings grow, and the dividend grows, the price will follow.

@methioswar2916 7 ай бұрын

@@kostadin_ristovski i agree with that on a fundemental lvl. But here in europe companies are under valued for decades. If a mature company like this one hasnt ever traded around its fairvalue i dont see why that would change in the future

@kostadin_ristovski 7 ай бұрын

I disagree that in Europe companies have been undervalued for decades. In fact, I'll argue that many of the large companies are overvalued. As for this particular company, I think not only it was around its fair value, but it was also overvalued back in 2015. Somehow, companies whose share price already went up get more attention, than the ones whose share price is flat and might be a better deal. Investing is fun and this is only to show the behavioral part that plays a big role!

@woodyworld9341 7 ай бұрын

Interesting company but they never realy recovered from the 2008/09 crisis. Another crisis like that and you wont see your money for the next 15 years. But then you can pick them up for -90% the current price.

@kostadin_ristovski 7 ай бұрын

The company is definitely not riskless.