Robert Leitz of iolite Partners presented his in-depth investment thesis on Bakkafrost (Oslo: BAKKA) at Best Ideas 2018.
Bakkafrost is a best-in-class, vertically integrated salmon farmer with operations in the Faroe Islands. The company owns permanent licenses in geographic locations suitable for salmon farming, boasts state-of-the-art production facilities, decades of technical know-how, and is run by a shareholder-friendly owner-manager. At NOK 320 per share, Bakkafrost recently traded at just 11x LTM P/E and 7.7x LTM EV/EBITDA. This is low for a high-quality company in an industry with strong tailwinds: demand is growing (demographics, global development, zeitgeist), but supply is struggling to keep up (suitable locations, politics, biological hazards). Bakkafrost is a prudently run company that has shown impressive organic growth over the last five years (ROE 30% annually, EBITDA 30%, harvest 6%) and is likely to grow production by another 30% (6% annually) until 2021 given current capex projects. Robert believes the market has failed to catch up with Bakkafrost’s growth profile and is overestimating the impact from short-term price swings (supply interruptions in Chile and Norway spiked salmon prices in 2016-2017; they recently came down from those highs).
About the instructor:
Robert Leitz is iolite’s sole owner and managing director. Before founding iolite in 2008, he held positions at various financial institutions, including TPG Credit (a hedge fund), Goldman Sachs’ European Special Situations Group, and KPMG Corporate Restructuring. Robert graduated from the University of St. Gallen (HSG), Switzerland, with a Master of Science in Business Administration and Economics, and wrote his master’s thesis under the guidance of Prof. Eli Noam at Columbia University, New York.
Members, log in below to access the full session.
Not a member?
Thank you for your interest. Please note that MOI Global is closed to new members at this time. If you would like to join the waiting list, complete the following form:
About The Author: MOI Global Editorial Team
The MOI Global Editorial Team, led by John Mihaljevic, CFA, includes community builders, event organizers, writers, editors, research associates, security analysts, and fanatical member support advocates. Our sole purpose is to serve the members of MOI Global as well as we possibly can in order to help them learn, invest intelligently, and build lifelong friendships with like-minded people.
Who is MOI Global? In recent years, The Manual of Ideas has expanded to become more than simply “the very best investing newsletter on the planet” (Mohnish Pabrai). We are now a thriving global community of intelligent investors, connected through great ideas, thought-provoking interviews, online conferences, live member events, and much more.
Members of MOI Global enjoy complimentary access to a growing array of resources and content related to the art of intelligent investing. Members also enjoy preferential access to selected offline events as well as exclusive access to other events hosted by MOI Global, including the Zurich Project Summit, the Latticework Conference, and Ideaweek.
More posts by MOI Global Editorial Team