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Therefore, we want to make it easy for you and offer a 40% discount on the monthly and annual subscription .

In this way you will optimize your capital and for only €7.49 per month (prorated annual plan) you will receive investment ideas and theses every week.

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Since we launched the substack in May 2022, we have received 5 OPAs in our portfolio ; Sourcesense , Umanis, Kape Tech , Majorel the last one with a 43% premium or Sababa , a company very similar to today's, and which we received a takeover bid in less than 1 week after publishing it.

The unknown company that we will reveal today is dedicated to offering cybersecurity services and products . It is very similar to companies that we have already published, such as Cyberoo , which we currently have in our portfolio, or the aforementioned Sababa , which we sold after a takeover bid.

As we already discussed in the Thesis of Cyberoo and Sababa, these types of companies are growing at double digits and are expected to continue at this rate in the next 3-5 years, due to the strong demand for their services. In turn, they have a double catalyst, and it is the expansion of their margins as they gain scale and begin to leverage their software products . (This will be explained in today's thesis). To put it in perspective, currently in 2023, Cyberoo has an EBITDA margin of 43% and today's company with 36% , with an estimate of growth thereof of at least +20% per year for the next 3-5 years.

But the most relevant of the idea that we share today, is the special situation that has been created due to the inefficiencies of the market in small companies and in Italy . There is a potential takeover bid for today's company, already communicated by both companies, which must be exercised or not before August 5, 2023. The price estimated by both parties should be around at least + 13% compared to the current price.

Next, we will specifically explain the details of the operation and we will argue why (as we already communicated to subscribers via chat on Monday ) we have decided to start a small position in this company, a special situation that we expect to resolve in less than 2 months.

The ratios and ingredients of the unknown thesis nº 39 are the following:

·       Sales growing by +16.2% and EBITDA by +20%.

·       ROE 20%

·       EBITDA margin 36% and EBIT of 28%

·       10% FCF margin

·       FCF EBITDA conversion of 28%

·       Without debt: Debt/EBITDA -1x

·       Potential takeover bid with a 13% premium with a catalyst in less than 45 days

Without further to add, we leave you with the new company that we have added to the Quality Value portfolio!

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Today's unknown thesis revolves around a food company very similar to Newlat Food, one of our main portfolio positions.

It is a company with a capitalization of €35m, i.e. even smaller than Newlat (€180M), which has grown by 23% this year, and has an average growth strategy of 25% per year until 2026.

Unlike Newlat, where its business focus is on retail sales to large distributors, especially pasta, the Finnish company's core business is in healthy pre-cooked food distributed mainly to healthcare companies. A very stable niche with high tailwinds in Finland.

On a valuation level, it has been heavily pressured this year by rising commodity prices, and supply chain issues caused by the war in Ukraine. The stock traded at a P/E ratio of 20x and Ev/EBITDA of 14x. Multiples that we believe are appropriate for this type of business. Investors came to pay a P/E of 42x in 2020, and currently in 2023 we have it at less than P/E 23x and 10x Ev/EBITDA.

However, the interesting thing would come in 2026, and if they fulfill the plan they have given we estimate that its value should be 4x more than the current one, trading at current prices at 5.2x PER in 2027. In the thesis we will go into more detail on this point.

Ingredients of the investment idea 17th:

• Very stable sector such as food, growing at 23% in 2022.

• Target 2026 more than doubling turnover and expanding margins.

• Targets would imply compound annual growth of 23% in sales and 4,227% in EPS.

• Current margins compressed, with a high probability of expansion this year and by 2026.

• CEO with 26% of the shares.

Without further ado, we leave you with the new unknown idea, we hope you like it and that it encourages you to continue investigating it.

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We return to the Nordic countries, this time with a Swedish company in a sector that we know well, and we like for its secular trends for the coming years; IT services and digital transformation.

Today's company is dedicated to offering digital solutions in the Nordic region, mainly in Sweden, which accounts for 52% of sales. It operates through four segments: Solutions, Experience, Connectivity and Insight. It offers its services to both the private and public sectors, 60% and 40% of revenue respectively.

We are talking about a company with a history of constant sales growth since its IPO in 2005, growing even in difficult periods such as 2008.

This growth has been accelerated in 2021, with an increase in sales of more than 40%, due to the acquisitions made.

Overall, we are talking about a company in the IT sector with a track record of more than 10 years, established, consolidated, and with a strong position in the public sector in the Nordic region.

Ingredients of the investment idea 17th:

• History of steady sales growth since 2008 inclusive.

• Sales growth of more than 40% and 25% in 2021 and 2022 respectively, counting acquisitions.

• The share since IPO has grown by 744%, 12% compound annual growth.

• Steady and stable growth in the digital transformation sector.

• Consistent 15% annual growth target, with an EBITA margin of 12%.

• Debt/EBITDA: 1.34x

Without further ado, we leave you with the new unknown idea, we hope you like it and that it encourages you to continue investigating it.

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