Northgate: Light Commercial Vehicle Flexible Rental Business Operating in the UK, Ireland and Spain

Dan Abrahams presented his in-depth investment thesis on Northgate (London: NTG) at European Investing Summit 2013.

Light commercial vehicle rental business operating in the UK, Ireland and Spain. Commoditized, cyclical and capital intensive industry, but mid-cycle fleet of 100K implies a 12% steady state FCF yield on recent market capitalization. Asset-based valuation considerations: enterprise value per van following rescue rights issue (mid 2009): £8.1k; current enterprise value per van: £11.1k. The equity may represent a “repeated opportunity” as the share price tends to be more volatile than business value. Acquisition target in the absence of shareholder returns (speculated target for Enterprise and Avis; open shareholder register).

About the instructor:

Dan Abrahams is the portfolio manager of the Praxient Leopard Fund, a long biased equity value fund which launched in 2013. Daniel joined Praxient Capital at the firm’s inception in 2007 and works as a generalist. Prior to joining Praxient, Dan worked in Corporate Finance at Deutsche Bank. He began his career with Arthur Andersen and graduated from the University of Oxford with a First Class degree in Economics and Management. Dan is a CFA Charterholder and spent two years as the co-chair of the Value Investing Special Interest Group of the UK CFA Society.

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