Matthias Riechert presented his in-depth investment thesis on Energy Assets (UK: EAS) at Wide-Moat Investing Summit 2014.
Energy Assets: UK-based company that collects stable, inflation-protected cash flows from gas meters and data loggers. EAS installs, owns and manages gas meters in the industrial and commercial sector in the UK (more than 2/3 of revenues are recurring). It is ideally positioned to profit from a land-grabbing opportunity: the exchange of old to new “smart enabled” meters (drivers are energy efficiency and EU-wide regulation) and a domestic regulatory-driven break-up of the traditional monopolistic market structure under National Grid. Moat: switching costs (costs for site visit, capex for new meter, gas supply interruptions) and search costs/reputation (for new business the company competes based on reputation). The equity is cheap on an absolute and on a relative basis compared to its main competitor Smart Metering Systems. Riechert estimates that EAS will grow its EPS to 0.42 in less than three years. Growth is less predictable (but not unlikely) afterwards.
About the instructor:
Matthias Riechert is co-founder and portfolio manager at Polleit & Riechert Investment Management, an investment firm dedicated to significantly increasing the wealth of its clients, adjusted for inflation. Prior to co-founding the firm in 2012, Matthias worked at Citigroup, including as head of investment products Germany, from 2001 to 2010. Previously, he was an equity and options trader at Van der Moolen. Matthias holds an MBA from Columbia Business School and London Business School.
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