Sid Choraria of Amiral Research presented his in-depth investment theses on NESCO (India: 505355) and Vinamilk (Vietnam: VNM) at Best Ideas 2018.
NESCO is a ~$600 million market cap company, debt-free, with a valuable 70-acre land asset in Mumbai, recorded at cost of $1 million and bought more than fifty years ago. This land/location provides a wide moat to the growing operating businesses, which are cash cows: IT parks and exhibition businesses. The stock has tripled in the last four years but has a long runway for growth as NESCO embarks on expansion with the new Bombay Convention Center over the next decade. The top managers are conservative and value-oriented capital allocators with “skin in the game” and have been taking steps to professionalize the company from a “family-run” venture. Sid initially present NESCO at Asian Investing Summit 2014, hosted by MOI Global, when NESCO was a $190 million company. NESCO remains an attractive long-term compounding story in India.
Vinamilk is a $13.5 billion market cap Vietnamese company with a wide moat, offering investors a liquid opportunity without constraints on foreign ownership to get long-term exposure to Vietnam. The company has market share of 50+% in key product categories with pricing power, a strong distribution network, a brand favored by locals, and economies of scale. The reproduction costs of this moat are high for foreign players. Although the stock is not “hidden” in the traditional sense, the consensus in Sid’s view underestimates the long-term potential (5-10 years). Vinamilk should be viewed as a combination of great companies, given the diversified product portfolio (probiotics, juices, coffee), which he believes have the long-term potential to become more valuable in the future without meaningful capital deployment, as distribution and brand are in place.
About the instructor:
Sid Choraria joined Amiral Research as Head of Asian equities research in Singapore to adopt Amiral Gestion’s value investment process in the inefficient Asian equity markets. Prior to Amiral, Sid worked as Portfolio Manager and Vice President at APS Asset Management in Singapore, a $2.7bn leading hedge fund in Asia. Previously, Sid work at Goldman Sachs, Merrill Lynch and Morgan Stanley in Hong Kong. Over the last five years, Sid has won multiple global investment research awards, judged by over 70 global fund managers and allocators by institutions like SumZero, Ira Sohn, Value Investing Congress and Factset. In 2015, Mr. Choraria was the recipient of the Best Analyst Excellence Award by SumZero from a pool of over 13 000 analysts and fund managers globally. In 2014, Sid piqued the attention of Warren Buffett on a Japanese investment research report, which elicted a response from Mr. Buffett of “keep your eyes open!” Mr. Choraria received his MBA from New York University in 2011 and was recipient of the Harvey Beker Scholarship. During his MBA, Sid worked at Bandera Partners LLC in New York under well-known value investor, Jeff Gramm, Founder of Bandera Partners and Adjunct Value Investing Professor of Columbia Business School. He is a member of Value Investors Club, an elite investment club for top money managers and analysts founded by Joel Greenblatt.
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