Christopher Rossbach presented his in-depth investment thesis on MTU Aero Engines (Frankfurt: MTX) at European Investing Summit 2013.
Largest independent Tier-1 civil aero engine component manufacturer and the largest independent player in aero engine maintenance, repair and overhaul (MRO) services. “Razor and razor blade” business model: growing installed base of new civil aero engines and nearly 60% of sales in aftermarket – split 40% MRO services and 20% very high margin engine spare parts. Positioned in the sweet spot of the recovery in civil aerospace spending with little exposure to declining military budgets in comparison to many peers. A recent profit warning (related to military PW2000 engine spares) represent a buying opportunity as the growth opportunity in the next generation of civil engines remains intact. “Offers 25-30% upside” and “can compound earnings and cash flow long-term at 8-10% p.a. with allowance for cyclicality.” (2013E P/E: 14x)
About the instructor:
Christopher Rossbach is Managing Partner of the London-based family office, J. Stern & Co. Established to provide investments for the Stern family, it is devoted to long-term investments for families with a multi-generational approach. J. Stern & Co. builds on the Stern family’s 200 year old banking tradition with a conservative approach and institutional-level analysis and resources. It manages bespoke concentrated global equities portfolios following a strict value approach, based on its own proprietary analysis, with a long-term investment horizon. Prior to co-founding J. Stern & Co., Chris had senior investment roles at Merian Capital, Magnetar Capital, Lansdowne Partners and Perry Capital. Chris holds a BA from Yale University and a MBA from Harvard Business School.
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