An Infrastructure Play and a Potential Multibagger | Two New Portfolio Additions:
Management saying "we won't sell cheap" + a roll-up buying at 5-7x EBITDA
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Here are the new positions added to the portfolio.
Stock 1: Potential Multibagger
I’ve found a 32-year-old infrastructure business that just secured approval to serve 60% of Saudi Arabia’s pipe coating market.
Revenue growing 31% year-over-year. $157.8M contracted backlog converting within 12 months, up 109% year-over-year. Trading at 9x EBITDA while peers trade at 10-15x.
But here’s what makes this interesting: management just explored strategic alternatives, decided not to sell, and publicly stated ‘the current stock price does not reflect the true value of the company.’
They looked at offers. Said no. And told shareholders the stock is cheap.
Fortress balance sheet with 0.5x net debt/EBITDA.
The asymmetry is clear – either they execute independently and the market eventually recognizes the value they’re publicly stating exists, or a buyer emerges willing to pay the ‘hefty premium’ management demands.
Either way, management is acting like the stock is undervalued.
Stock 2: Potential Multibagger
A Canadian micro-cap quietly building a funeral home empire through disciplined capital allocation.
They’re acquiring family-owned operations at 5-7x EBITDA while targeting 20-25% net margins – creating immediate arbitrage when their stock trades at higher multiples.
Five locations generating CAD $7.5M revenue today. Management plans 4-6 more acquisitions this year.
The math is brutally simple: buy stable, cash-generative assets cheaply, finance with a mix of debt and strategic equity, retain local relationships that matter in this business, and compound.
Trading at CAD $14M market cap with clear visibility to CAD $15-20M revenue within 18 months.
The execution risk is real, but the industry tailwinds are permanent. If they hit their margin targets and maintain acquisition pace, I think this could be a 3-5x over the next few years.
It’s a show-me story, not a buy-and-forget compounder yet. But the setup is there.