#106: Jeremy Raper; Endor AG
06/22/20 • 36 min
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OverviewEndor AG is a Munich-listed holding company whose sole asset is Fanatec, the premium provider of racing wheels and other accessories for sim racing games played on consoles and PCs
Despite being a German-listed small-cap, the company has ~80% market share in the premium wheel/accessories segment and has essentially locked up exclusive branding rights for all the major OEMs and racing organizations (F1/Nascar/WRC) to produce branded replica racing wheels. Growth Endor AG grew 70-80% last year and has compounded revenues at 40% over the last 10yrs, as iRacing/simulated racing has grown organically in popularity at very high rates COVID-19 Impact Current growth is exploding due to COVID-19 and the mainstream recognition sim racing has garnered with normal sports closed for the last three months. The current business is growing 100-200% per annum, so much so that the company can barely keep up with demand. The company has already leaked they are targeting 150-200mm in revenues at 25-30% EBIT margins in the next couple of years (versus 40mm revenues last year and 80mm this year). Going Forward The stock currently trades at ~11x 2021 earnings, and ~2x 2021E sales, despite a multi-year runway where the business could grow 30% for a very long time. Fair value on a 'normal' exchange with English disclosures/investor relations would probably be 4-5x the current price. Jeremy believes that even on the minor German exchange, it's hard to see how the stock doesn't double or triple again. Staying In Touch With Jeremy Raper Staying In Touch With Eric Schleien
If you like The Intelligent Investing Podcast, please consider subscribing on:
OverviewEndor AG is a Munich-listed holding company whose sole asset is Fanatec, the premium provider of racing wheels and other accessories for sim racing games played on consoles and PCs
Despite being a German-listed small-cap, the company has ~80% market share in the premium wheel/accessories segment and has essentially locked up exclusive branding rights for all the major OEMs and racing organizations (F1/Nascar/WRC) to produce branded replica racing wheels. Growth Endor AG grew 70-80% last year and has compounded revenues at 40% over the last 10yrs, as iRacing/simulated racing has grown organically in popularity at very high rates COVID-19 Impact Current growth is exploding due to COVID-19 and the mainstream recognition sim racing has garnered with normal sports closed for the last three months. The current business is growing 100-200% per annum, so much so that the company can barely keep up with demand. The company has already leaked they are targeting 150-200mm in revenues at 25-30% EBIT margins in the next couple of years (versus 40mm revenues last year and 80mm this year). Going Forward The stock currently trades at ~11x 2021 earnings, and ~2x 2021E sales, despite a multi-year runway where the business could grow 30% for a very long time. Fair value on a 'normal' exchange with English disclosures/investor relations would probably be 4-5x the current price. Jeremy believes that even on the minor German exchange, it's hard to see how the stock doesn't double or triple again. Staying In Touch With Jeremy Raper Staying In Touch With Eric Schleien
Previous Episode
#105: Pinelawn Cemetery (PLWN); An OTC Dark Stock; Jan Svenda
OTC Stock Manual If you’d like to purchase Jan Svenda’s Manual Of Stock (like an updated online Walker’s Manual)...click, here. You can see samples to Jan’s manual, here. Other Episodes Featuring Jan Svenda
- Altair
- Vulcan International
- Millennium Investment & Acquisition Company
- Conair Corp
- Mills Music Trust
- OTC Investing Primer
If you like The Intelligent Investing Podcast, please consider subscribing on:
IF YOU’D LIKE TO WATCH THE INTELLIGENT INVESTING PODCAST ON YOUTUBE, CLICK HERE. SummaryIn this episode of The Intelligent Investing Podcast, Eric Schleien sits down with Jan Svenda to discuss Pinelawn Cemetery (PLWN), a dark OTC stock.
Articles- A Dark OTC Stock with a 9% Dividend Yield (Elementary Value)
Jan is a “deep value” investor/analyst mainly focused on the US small-cap and micro-cap universe. He started out with a long-only bias (stocks trading close to NCAV etc.) which led to his interest in the OTC world.
Jan now covers this space through his exclusive newsletter service where he shares his latest long ideas and a watchlist of OTC stocks which should help subscribers generate material returns and allow them to “monitor” the OTC space more efficiently.
The service also acts as a community of engaged members who share the same focus. On top of this, he is interested in short-focused research especially in the thesis revolving around accountancy or earnings manipulation.
From time to time he also contributes to Safety in Value’s marketplace ‘Microcap Review’.
STAYING IN TOUCH WITH JAN SVENDATo learn more about Jan and his manual of OTC stocks, you can visit his website.
He can also be reached via LinkedIn.
Staying In Touch With Eric Schleien DisclosureEric Schleien and clients of his company Granite State Capital Management have no position in Pinelawn Cemetery. I, Eric Schleien, recorded this podcast myself, and it expresses my own opinions. This episode should not be considered investment advice. Please do your own due diligence.
Next Episode
#107: Calloway's Nursery (CLWY) | Jan Svenda
OTC Stock Manual If you’d like to purchase Jan Svenda’s Manual Of Stock (like an updated online Walker’s Manual)...click, here. You can see samples to Jan’s manual, here. Subscribe
If you like The Intelligent Investing Podcast, please consider subscribing on:
SummaryCalloway's Nursery was first discussed in Episode #22.
In this episode of The Intelligent Investing Podcast, Eric Schleien sits down with Jan Svenda to discuss Calloway's Nursery, Inc. (CLWY).
This may possibly be the least obscure stock that Jan has ever discussed on the show.
The company runs a small chain of garden centers in Texas. There is an activist investor in the management who has been a good steward of capital. The original pitch was that the company was trading below liquidation while business was solid. New management came in and realized value. There’s been about an extra 10% return with special dividends. The company currently spits out $3,000,000 a year in free cash flow which is backed up by real estate and a healthy balance sheet. The company is opening up new stores. There’s also the possibility of future improvements in free cash flow. The company is currently valued at about a 10% free cash flow yield. The coronavirus should not hurt them too badly.
About Jan SvendaJan is a “deep value” investor/analyst mainly focused on the US small-cap and micro-cap universe. He started out with a long-only bias (stocks trading close to NCAV etc.) which led to his interest in the OTC world.
Jan now covers this space through his exclusive newsletter service where he shares his latest long ideas and a watchlist of OTC stocks which should help subscribers generate material returns and allow them to “monitor” the OTC space more efficiently.
The service also acts as a community of engaged members who share the same focus. On top of this, he is interested in short-focused research especially in the thesis revolving around accountancy or earnings manipulation.
From time to time he also contributes to Safety in Value’s marketplace ‘Microcap Review’.
STAYING IN TOUCH WITH JAN SVENDATo learn more about Jan and his manual of OTC stocks, you can visit his website.
He can also be reached via LinkedIn.
Staying In Touch With Eric SchleienIf you like this episode you’ll love
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