Hargreaves Services: Misunderstood, Coal-Related Company Based in the UK

Reiner Sachs presented his in-depth investment thesis on Hargreaves Services (London: HSP) at European Investing Summit 2013.

Misunderstood, coal-related company based in the UK. While the company also produces coal (30% of group EBIT), nearly 60% of group EBIT derives from specialty coal distribution (UK domestic heating, briquettes used for barbeque, cement), where it does not take price risk. Hargreaves has effectively been able to become the dominant UK specialty coal distributor in an increasingly weak competitive field allowing it to consistently gain market share and generate extraordinary profits. CEO has skin in the game with 9% equity ownership (bulk of personal net wealth) and is an excellent operator and capital allocator. Recent bankruptcies of several UK coal producers have allowed Hargreaves to cherry-pick cheap assets. Raised capital in April 2013 and acquired two high quality mining assets on the cheap. Trades at FCF/EV2014 of >15% or FCF/market cap 20%.

About the instructor:

Reiner Sachs, CEO of Shareholder Value Management, presented instead of Frank Fischer at European Investing Summit 2013.

(The following bio is available in German only.) Reiner Sachs, Jahrgang 1959, gründete 1999 mit Günter Weispfenning die Shareholder Value Management AG. Er ist seit 1999 Mitglied und seit 2005 Vorsitzender von deren Vorstand. Zudem ist er seit 2000 Mitglied des Vorstands der Shareholder Value Beteiligungen AG. Reiner Sachs ist seit 2003 Mitglied des Stiftungsrats und des Anlageausschusses der Share Value Stiftung. Seit 2012 ist er Vorsitzender des Anlageausschusses. Er ist Mitglied des Vorstands der Förderstiftung Liebieghaus. Von 1992 bis 1999 war er erst in der Thüringer Sparkassenaufsicht und danach im Parlamentsdienst und Wissenschaftlichen Dienst des Thüringer Landtags, zuletzt als Regierungsdirektor, tätig. Dort war er als Referatsleiter unter anderem für den Geschäftsbereich des Wirtschaftsausschusses zuständig. Nach seiner Ausbildung zum Bankkaufmann bei der Commerzbank AG studierte er Rechtswissenschaften in Gießen und Bonn. Herr Sachs ist Volljurist und in Frankfurt am Main als Rechtsanwalt zugelassen.

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