Dave Sather presented his in-depth investment thesis on Remy Cointreau (FRANCE: RCO) at Wide-Moat Investing Summit 2014.
Remy Cointreau: Bad recent news creates opportunity to buy one of the premier brands in the global alcoholic beverage industry at an attractive price. The bad news revolves mainly around the recent Chinese government crackdown on extravagant gift-giving, which has reduced sales of Rémy products there (~30% of 2013-14 revenue is from Asia-Pacific). However, with a logical, long term focused family owner, strong management, and the unique Rémy Martin/Louis XIII cognac brands, the business is bound to grow over time. The margin of safety is provided by the value of current “eaux-de- vie” (estimated market value of €2.4 billion relative to current cognac pricing, or 70% of recent market cap), which implies a value for remaining brands of less than €1 billion. The latter include valuable brands such as Cointreau and Metaxa, which combined contribute nearly 30% of operating profit (the remainder is from Rémy Martin cognacs).
About the instructor:
Dave Sather is president and founder of the Sather Financial Group, Inc, a “fee-only” financial planning and investment management firm responsible for overseeing approximately $290 million in client assets. Dave was raised in El Paso, received his B.A. in Business Management from Texas Lutheran University and received his M.B.A. from Texas A&M University. He has spent the past twenty years in the financial analysis, investment and banking industries. As team leader he is responsible for coordinating portfolio management as well as financial and strategy planning of a client’s life. This strategy planning not only includes traditional fee-only investment management, but also estate, retirement, taxation and risk management planning. In addition to his work with Sather Financial, Dave is a Director of Business Bank Of Texas. Dave is an adjunct professor in the Business program at Texas Lutheran University and is a member of the schools Executive Advisory Council. He is also Chairman of the Finance and Investments Committee for the Brownson Children’s Home and is Treasurer of First English Lutheran Church. He and his wife, Carol, live in Victoria, Texas.
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