Louis d’Arvieu presented his in-depth investment thesis on Linedata Services (France: LIN) at Best Ideas 2015.
Linedata Services is a software company in the Asset Management and lending/asset finance space, 40% US, 40% France and 20% UK. It is an external growth story with great capital allocators in the management team, very disciplined in terms of acquisitions, shooting only when valuation is cheap + synergies are significant. Cost control is great with EBITDA margins steadily increasing over time to current 25% level. Pre-tax ROIC including Goodwill is thus >20% though P&L profits understate the true cash generation power of the company. On top of acquisitions, the cash generation enables decent dividends and big and regular share buybacks under and around current very cheap stock price : 1.3x EV/Sales, <10x PER, 12-13% recurring FCF yield. Founder and managers hold close to 50% of outstanding shares, a growing percentage over time.
About the instructor:
Louis d’Arvieu joined Amiral Gestion in 2005 and serves as a fund manager for the Sextant funds. Founded by François Badelon, Amiral is an independent asset management firm based in Paris. Amiral’s single goal is sustained performance with minimum risk based on the firm’s value investing approach. Louis graduated from the HEC School of Management in Paris.
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