Isaac Schwartz presented his in-depth investment thesis on Jimmy Choo (London: CHOO) at Best Ideas 2017. At the start of the session, Isaac Schwartz spends a few minutes previewing VALUEx Kazakhstan.

Jimmy Choo designs and markets fashion footwear. It’s a classic case of a great brand and business, which had been underinvested by private equity, was then identified and acquired by a brilliant capital allocator – responsible for developing a wide range of high-performing consumer brands of recent decades – and is now in the last innings of a major operational expenditure program that will result in a transformed business. Although gross margins have increased steadily, these operational initiatives have temporarily obfuscated the naturally high operating margins. The control shareholder group has an excellent track record, and there is high insider ownership and creative management incentivization. Taking these circumstances into account and viewing the recent operational successes in new and old markets, Isaac believes the reported PE of 22 misstates the intrinsic earnings of the business, which he expects to be revealed in the near future.

About the instructor:

Isaac Schwartz is a portfolio manager at Robotti & Company Advisors LLC. In 2005, Isaac launched the firm’s initiative, now known as Robotti Global Fund, to apply fundamental investing in overseas markets, initially in Southeast Asia. Isaac’s research has led him to live for extended periods of time in Singapore, Istanbul, and Beijing, and he was based in Hong Kong from 2008 to 2013. Isaac has a special interest in the rise of Central Asia, and has been an active investor in Kazakhstan since 2010. Prior to joining Robotti & Company, Isaac worked for Schiff’s Insurance Observer, an investigative journal focused on the property-casualty insurance industry. Isaac holds a B.S. in Economics from the Wharton School.

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