Introducing the Monthly Screener
Today, I’m launching a new section on the blog: Monthly Screener.
One of the most time-consuming parts of my investment process is generating initial ideas. It requires going through hundreds of stocks just to find a few worthy candidates. First, I conduct a broad quantitative screening. Then, I narrow it down to a preliminary list, and then the deep analysis begins.
In this section, I will present 3 companies that passed the initial screening and may be worth further analysis.
Please remember this is a preliminary description of these companies, not a full analysis or an investment recommendation
1. ASBISc Enterprises (ASB)
The ASBIS Group was established in 1990 and is based in Cyprus. It is a specialist distributor of IT components, blocks, and peripherals. The company has warehouses in over 30 countries and operates in Central and Eastern Europe, the Baltic States, the Middle East, and Africa.
ASBIS has experienced steady growth, achieving a CAGR of 9.8% over the last 10 years. As a distributor, ASBIS operates with inherently low margins, though these have improved in recent years. The company’s debt level is moderate at a net debt-to-EBITDA ratio of 2.21. ASBIS consistently generates ROEs above 10%; these ROEs have recently exceeded 20% due to improving margins.
The company is led by its founder, who owns 36.84% of the outstanding shares, always a positive sign of aligned interests.
The company currently trades at an LTM EV/EBITDA ratio of 6.74 and an LTM P/E ratio of 7.8.
2. Warpaint London PLC [W7L]
Warpaint sells branded cosmetics primarily under the popular brand names of W7 and Technic. The business model is asset-light because it outsources most of its production, mainly to Asia. This strategy allows the company to generate high returns on invested capital. Warpaint sells its products globally, with its core markets being the UK and Europe.
This is a clear growth story: since its IPO in late 2016, the company has multiplied its sales by five times (5x). Warpaint is led by its two founders, who are also the principal shareholders. This creates a very conservative management team that consistently operates with a Net Cash position on the balance sheet.
Warpaint is currently valued at an LTM EV/EBITDA of 7.2 and an LTM P/E of 10.7.
3. ILPRA S.p.A. [ILP.MI]
ILPRA S.p.A. is involved in the design, production, and sale of packaging machines worldwide. Their product line is broad, including tray sealers, thermoformers, fill seals, and secondary packaging machinery.
The company has a very strong growth history, achieving a CAGR of 19% since 2016. The company’s debt level is reasonable, with a Net Debt/EBITDA ratio of 1.55.
ILPRA is managed by Mauricio Bertocco, who is also the largest shareholder and owns 70.5% of the company’s shares.
ILPRA trades at an LTM EV/EBITDA of 7.5 and an LTM P/E of 12.8.