Member Info for dang123

Hi all,

I’ve been looking at Ashtead Technology and have written up a more detailed note on it.

My basic view is that the market may be treating it as a more cyclical offshore services name than it really is, while the underlying business looks better positioned than that. A few things that stand out to me:

exposure to both offshore energy and wider subsea / inspection / monitoring demand

a business that appears to be benefiting from longer-term energy security and infrastructure spending themes

the question of whether the current valuation fully reflects the quality of the model and growth runway

Full write-up here: https://outsizedreturns.substack.com/p/ashtead-technology-9-earnings-16

Interested in other views, particularly on how people see the balance between cyclical risk and longer-term structural demand.

Hi all,

I’ve been looking at Renew Holdings and have written up a more detailed note on it.

My basic view is that this may be a higher-quality infrastructure services business than the market gives it credit for. A few things that stand out to me:

exposure to essential maintenance rather than pure new-build cycle risk

decent underlying quality and return characteristics

the possibility that the market is overlooking the durability of demand

Full write-up here: https://outsizedreturns.substack.com/p/renew-holdings-the-maintenance-compounder

Interested in other views, especially on whether the current valuation properly reflects the quality of the business.

Hi all,

I’ve recently written up my thoughts on Plus500 and thought I’d share them here.

My view is that the stock may still be seen too narrowly as an ex-growth CFD business, whereas there may be more going on under the surface. A few points I covered:

the strength of the core cash-generative business

whether the market is underappreciating newer growth options

how much of the valuation is already supported by cash and returns to shareholders

Full write-up here: https://outsizedreturns.substack.com/p/plus500-x-kalshi-the-otc-cash-machine

Would be interested in hearing other views, particularly on how much value should be ascribed to the newer business lines.

Hi all,

I’ve been looking at The Property Franchise Group and have written up a note on it.

My basic view is that it looks stronger and more resilient than the market may be giving it credit for, especially given the recurring nature of parts of the model. Key points for me were:

good recurring revenue characteristics within the franchise model

cash generation and the economics of the broader platform

potential for the market to be underestimating integration and growth opportunities

Full write-up here: https://outsizedreturns.substack.com/p/the-property-franchise-group-tpfgl

Interested in other views, especially around the housing-cycle sensitivity versus the quality of the underlying model.

Hi all,

I’ve recently written up my thoughts on Trainline and thought I’d share them here.

My view is that the market may still be too focused on regulatory risk, while the business continues to show decent growth, strong cash generation, and buyback support. A few points I covered:

the core UK business versus the perceived government risk

international growth, especially as proof the model can travel

whether the valuation already discounts too much bad news

Full write-up here: https://outsizedreturns.substack.com/p/trainline-trnl-disruption-narrative

Would be interested in hearing where people agree or disagree, particularly on the long-term risk from rail reform.

Hi all,

I’ve been looking at Keystone Law and have written up a more detailed note on it.

My basic view is that the market may be valuing it more like a fragile professional services firm than the cash-generative platform business it arguably is. A few things that stand out to me:

strong cash generation and low capital intensity

continued lawyer growth and solid profit conversion

the debate seems to be whether the model is more durable than the market assumes

Full write-up here: https://outsizedreturns.substack.com/p/keystone-law-keysl-a-high-return

Interested in other views, especially on the durability of the model and whether the current rating is justified

I would be careful applying a 20x to the whole business. You have got to remember that a significant portion of those earnings are associated with Net Treasury income which they explicitly report separately within their results as it largely determined on interest rates.

However back of the envelope I think you are right , a 20x (underlying profit) of £47.4m gets you too ~£1bn which is roughly equal to the current enterprise value.

You are then essentially throwing in the net treasury income for free. I could easily see this being sustainably around the £50m. If you apply a 10x to that portion then add another £500m to intrinsic value.

This brings my fair value to approx £40-45. Heavy buyer at these levels

I have just initiated a position here as I believe this represents an attractive risk / reward.

However some possible reasons for the share price drop:

General recession fears and oil price drop - I think the main fear here is lower utilisation rates which are historically high at 44%. That being said Ashtead have weathered previous downturns well (2014–2016 oil price collapse). Customer backlogs also promising

US administration’s stance on offshore wind and general tariffs – Non event in my eyes given the current limited exposure to Americas

Fears about leverage and integration risks – again we should be down from 1.6x to 1.3x by end of year and AT has a proven track record of acquiring

Welcome peoples thoughts

Yes good results. I see this company as a fairly low risk way to achieve a decent return on investment over the next 3-5years as they start to sell off the assets on the book given the majority are in there at cost. Key factor being the speed with which they can do this.

My only slight nervousness is the ~25% of revenue within Services attributed to HS2. I think we can assume that this does not extend past the 2 years stated. Would be interested to see if anybody has a view on how easy it will be for them to win new work and reassign the associated resources / cost base. If this drops off of a cliff and is not replaced do we see a significant hits to overall margin?