Scott Reardon of Dakon Capital presented his in-depth thesis on Tinkoff Bank (UK: TCS) at Wide-Moat Investing Summit 2019.

Thesis summary:

Tinkoff Bank, one of the largest online banks, is located in one of the most unlikely places: Russia. Tinkoff earns 40% returns on equity and is growing assets at 25+% a year. Because Tinkoff is in Russia, the shares trade at only 6x earnings. Meanwhile, an oligopoly has formed in the Russian credit card market, and Tinkoff has established itself as the number-two player. The business is doubling in size every three years, yet trades at the same multiple as businesses that might not exist in three years. Scott estimates that Tinkoff shares are worth at least 125% more than the recent market quotation, even if a “Russia discount” is imposed.

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About the instructor:

Scott Reardon has a background in special situations, deep value strategies and activist investing. Prior to co-founding Dakon Capital, he was an analyst and the director of corporate development at a holding company pursuing a Berkshire/Leucadia strategy. Previously he was a research fellow at Columbia Business School in the Graham & Dodd Value Investing Program. He graduated cum laude from Northwestern Law and worked at Simpson Thacher & Bartlett in New York before joining the investment industry.