You might not think there would be all that much to like in an
obscure Austrian manufacturer of rubber and plastic products, but Semperit (OTC:SEIGF)
(SMPV.VI or SEM.VI) is definitely a case where investors should take a
much closer look. Rubber gloves, industrial hoses, and conveyors may not
sound like attractive markets, but Semperit has managed to generate
double-digit returns on capital and respectable margins on a pretty
consistent basis. Semperit shares appear to be at least 10% undervalued
on a low-ball EV/EBITDA basis, while a DCF model suggests a fair value
over 35% higher than today's price.
Semperit is going to be a
little more challenging to buy than the average stock. The company
offers ample information in English, but the ADRs are not at all liquid.
While I normally have no problem turning to a company's home European
market when U.S. liquidity is insufficient, the average volume in Vienna
is scarcely better with an average volume of less than 8K shares per
day. I certainly believe some of the value here is a byproduct of the
illiquidity and investors have to appreciate the risk that a speedy
entry/exit with no slippage may be difficult.
Follow this link for more:
Semperit Offers Real Value In Obscurity
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