Sam Sheldon of Punch & Associates Investment Management presented his in-depth investment thesis on Alta Equipment Group (US: ALTG) at Best Ideas 2021.

Thesis summary:

Alta Equipment Group is an under-the-radar owner-operated industrial and construction equipment dealership platform. The sale and rental of equipment drives higher-margin quasi-recurring revenue for parts and service, creating a unique razor/blade model. Exclusive territory agreements with OEMs and existing access to a tight labor pool of skilled technicians create barriers to entry.

The company operates in a fragmented space, and Sam believes that Alta is the preferred acquirer of OEM dealerships, limiting M&A competition. Since going public in February 2020, the company has completed seven acquisitions at valuations well below Alta’s discounted market multiple. With a proven playbook of acquiring and improving dealerships, a full pipeline of acquisition targets, and strong secular tailwinds, the company appears well-positioned to continue organic and inorganic growth.

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About the instructor:

Sam Sheldon joined Punch & Associates as an intern in June of 2016, while attending the University of St. Thomas where he also lead the University’s Investment Club. After graduating in May of 2018 with a BA in Financial Management, he joined the team full-time as an investment research analyst. In his free time, Sam enjoys boating on White Bear Lake, cheering for the Green Bay Packers and playing an occasional round of golf.

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