#28 ValueStream
$GRF SM-$THEP FP-$FA-$HGV-$XPOF-$NTDOY-$VTY.L-$MGNI-$TKR-$LVS
Disclaimer
This content is for informational purposes only and does not constitute financial advice; we recommend always verifying the ideas presented here and conducting your own research, as there may be errors in interpretation and translation.
Today we have compiled the following theses:
Grifols S.A. - $GRF SM - April 21, 2025 By White Falcon Capital Management
Thermador Groupe - $THEP FP - April 04, 2025 By Ennismore European Smaller Companies Fund
First Advantage - $FA - April 22, 2025 By Optimist Fund
Hilton Grand Vacations - $HGV - April 24, 2025 By Laughing Water Capital
Xponential Fitness - $XPOF - April 24, 2025 By Laughing Water Capital
Nintendo - $NTDOY - April 24, 2025 By Crossroads Capital
Vistry PLC - $VTY.L - April 24, 2025 By Crossroads Capital
Magnite - $MGNI - April 24, 2025 By Crossroads Capital
The Timken Company - $TKR - April 25, 2025 By SouthernSun Small Cap
Las Vegas Sands Corporation - $LVS - March 31, 2025 By Baron Focused Growth Fund
White Falcon Capital Management
https://www.whitefalconcap.com/
https://www.whitefalconcap.com/_files/ugd/2e6ec1_dcd408afb9164f0281eeb0aa9413a480.pdf
https://twitter.com/WhiteFalconCap
April 21, 2025
2025 Q1
Grifols S.A. - $GRF SM
Grifols is a Spanish leader in plasma-derived therapies, operating in a stable oligopoly with CSL and Takeda.
Core business is Biopharma (~84% of revenue), producing IG, Alpha-1, and albumin.
Owns 390 plasma centers and complex infrastructure, with 9–15 month processing cycles.
Historical issues included poor governance, related-party conflicts, and excessive leverage.
COVID-19 worsened operations due to donor shortages and high debt.
A 2024 short report caused a 50% stock drop and led to a management overhaul.
New CEO/CFO implemented restructuring: asset sales, job cuts, and efficiency upgrades.
The firm operates in a high-barrier, regulated industry with global growth potential in plasma use.
Key risks: U.S. immigration policy and recombinant protein substitutes (especially Alpha-1).
Net leverage reduced to 4.6× from 6.8×.
Valuation:
2025 Targets: Revenue €7.7B, EBITDA €1.9B, FCF €400M.
2029 Outlook: Revenue €10B, EBITDA €2.9B, FCF €1.2B/year, 40% FCF conversion.
Trades at lower multiples vs. peers (EV/EBITDA: 12.1× vs. 13.2× avg).
DCF-based upside: +103% (€17 target) or +109% (€19 target). At WACC of 10% and an exit multiple of 10x.
Ennismore European Smaller Companies Fund
https://ennismorefunds.com/european-smaller-companies-fund/newsletters
https://ennismorefunds.com/media/744/Ennismore-European-Smaller-Companies-Fund---March-2025.pdf
April 04, 2025
2025 Q1
Thermador Groupe - $THEP FP
French distributor in HVAC, water management, and fluid circulation via 18 niche-focused subsidiaries.
Long-standing subsidiaries hold >30% market share with mid-20% margins.
Organic revenue growth of ~7% p.a. (2015–2023), total growth ~13% with M&A.
Operates mainly in France (82% of 2024 sales); fragmented supplier and customer base provides competitive moat.
Centralized logistics supports scale advantages across decentralized units.
Historically resilient: only -5% revenue in 2009, stable 13–15% operating margins (2014–2023).
2024 hit by temporary issues: delays in the French MaPrimeRenov energy subsidy programme, housing weakness, inventory destocking, deflation, and weather impact.
Well-positioned for medium-term recovery via energy/water efficiency trends and policy support.
Strong financial health (net cash), experienced acquirer, benefits from weak competition.
2026 expected to see recovery in sales and margins, especially in high-margin subsidiaries.
Net cash: ~EUR 30 million.
Dividend yield: ~3%.
M&A track record: 15 deals in 10 years, avg. 0.8x sales, low double-digit margins — value-accretive.
Valuation
Trades at ~11x 2026 net operating profit after tax.
Valuation target of 16x implies 65% upside by end of 2026.
Optimist Fund
https://www.optimistfund.com/
https://www.optimistfund.com/investorletters/q1-2025-quarterly-letter-pd56k-6dcac
https://twitter.com/optimist_fund
April 22, 2025
2025 Q1
First Advantage - $FA
Market leader in employment background checks after acquiring Sterling Check (~25% market share).
Positioned for strong recovery as hiring volumes normalize after a 2-year downturn.
Merger expected to unlock >$100M in cost synergies, significantly enhancing EPS.
Deleveraging (from ~5x to ~3x net debt/EBITDA) expected to materially grow EPS.
Valuation:
Trades at 10x estimated 2026 EPS.
Expected EPS growth >20% annually without further M&A or buybacks.
5-year price target: ~$75/share.
Implied upside: ~400%, based on 25x multiple of projected 2030 EPS of $3.00.
Laughing Water Capital
https://www.laughingwatercapital.com/
https://seekingalpha.com/article/4777597-laughing-water-capital-q1-2025-letter
https://twitter.com/LaughingH20Cap
April 24, 2025
2025 Q1
Hilton Grand Vacations - $HGV
Branded timeshare business with a resilient, recession-resistant model.
Historically grew through every recession prior to the financial crisis.
Strong management alignment with shareholder interests.
Valuation
Trades at 4–5x free cash flow.
$600M annual buyback authorization (recently increased by 50%).
On pace to retire ~50% of shares in 3 years at current repurchase rate.
Xponential Fitness - $XPOF
Franchisor of boutique fitness concepts; Club Pilates is the standout asset.
New, experienced management brought in to stabilize and professionalize operations.
Business growth supported by already-sold franchise development agreements.
Regulatory concerns began to fade, improving outlook.
Potential divestiture of underperforming brands.
Upcoming investor day could signal positive developments.
Valuation
Initial thesis: Club Pilates alone worth more than entire company’s market value.
Stock mispriced due to short report and regulatory issues.
Position was increased significantly as regulatory risk declined and share price rose.
Became a top 5 holding before a sharp decline (~50%) following weak guidance and disappointing store openings.
Crossroads Capital
https://www.crossroadscap.io/
https://x.com/CrossroadsOnX
April 24, 2025
2025 Q1
Nintendo - $NTDOY
Nintendo is completing a long-term transformation into a recurring, ecosystem-based business model.
Switch 2 launches into an existing platform with 129M users and 34M+ NSO subscribers—no revenue reset.
Deep IP portfolio expanding into films, theme parks, and merchandise enhances brand value and monetization.
Switch 2 features (AI, mouse, online chat) and AAA third-party support target broader gamer demographics.
Transition positions Nintendo as a platform with increased user engagement, retention, and monetization potential.
FY 2026 revenue consensus (~¥1.9T) underestimates hardware sales by nearly ¥1T.
Company prepping 20M+ units at $450 each—implying strong sales upside.
Software revenue expectations seen as even more mispriced than hardware.
Multi-year setup offers exceptional risk-adjusted return potential.
Valuation:
Trades at <12x normalized earnings (ex-cash).
Vistry PLC - $VTY.L
Transitioning to a full “partnerships” model focused on affordable housing.
Model reduces cyclicality and improves cash flow timing.
Expected to become the UK’s largest affordable housing provider.
Business shift increases predictability, return on capital, and operational visibility.
UK government support for affordable housing is growing.
Management and major shareholders are actively buying shares.
Focused on reducing work-in-progress in H2 2025 to mark transformation progress.
Company targeting 40% ROCE, 12%+ margins, and 5–8% annual revenue growth.
Delayed targets (20k completions, £800M profit) still seen as achievable.
Trapped capital in legacy operations expected to be released and returned to shareholders.
Valuation
Trades at ~4x EBIT vs. peers at 3–4x higher multiples.
2026 target: £500 million operating profit.
Magnite - $MGNI
Largest independent Sell-Side Platform (SSP) for programmatic digital advertising.
Key player in Connected TV (CTV); partnership with Netflix highlights technological strength.
Margins are strong (75%+ incremental EBITDA); post-acquisition integration phase is complete.
Positioned to benefit from structural changes in digital advertising due to legal actions against Google.
DV+ division (open internet SSP) could gain market share from Google’s weakening dominance.
Publishers are seeking alternatives to Google, enhancing Magnite’s strategic position.
Netflix ad tier could generate over $70M in incremental EBITDA, implying 30%+ growth.
LEAP options offer highly asymmetric return potential.
Market underappreciates both Netflix impact and Google-driven reallocation of value.
Valuation
Trades at a single-digit EBITDA multiple.
Google breakup could result in 5–10x equity upside for MGNI.
SouthernSun Small Cap
https://southernsunam.com/
https://southernsunam.com/wp-content/uploads/2025/04/First-Quarter-2025-SouthernSun-Small-Cap-Strategy-Composite-Commentary.pdf
April 25, 2025
2025 Q1
The Timken Company - $TKR
Global leader in bearings and industrial motion products.
Revenue slightly down due to softer European demand.
Wind turbine bearing demand in China has stabilized; cost-cutting improved market share and profitability.
Leadership change: former CEO Rich Kyle returns as interim.
Long-term prospects supported by diversified product portfolio and operational initiatives.
Valuation:
Net debt/EBITDA stands at 2x.
Trades at a low double-digit P/E multiple, indicating compelling valuation.
Baron Focused Growth Fund
https://www.baronfunds.com/product-detail/baron-focused-growth-fund-bfgix
https://twitter.com/baroncapital
March 31, 2025
2025 Q1
Las Vegas Sands Corporation - $LVS
Recent underperformance due to concerns about China’s economic slowdown and U.S. tariffs.
Nearly $2B Macau investment causing short-term disruption; expected to be completed in May.
Post-completion, company is positioned to gain market share in Macau.
Still generating strong cash flow.
Maintains the strongest balance sheet in the gaming sector.
Buying back $2B in stock annually (8% of shares).
Pays a 3% dividend, well-covered by earnings.
Leverage is low at 2x EBITDA.
Valuation
Trades at a 6-point discount to historical valuation multiples.