Giles Capital Weekly - Week 43
Welcome to another edition of Giles Capital Weekly. This week, I've been deeply focused on the upcoming US presidential election and have published a detailed analysis identifying 48 actionable opportunities across sectors based on the potential market impacts. The timing feels particularly relevant with Nate Silver's model now showing Trump at 52.9% odds - their first-ever prediction in his favor.
For investors looking past the electoral cycle, there remains compelling opportunities in the smaller-cap arena. For example, Star Holdings trades at a substantial 60% discount to its net asset value, while quietly advancing asset sales. Conversely, large European companies like EssilorLuxottica show how dominant market positions can generate enduring shareholder value, largely insulated from near-term political uncertainties.
My top pick this week combines analysis from East Asia Stock Insights and MileHighMonk on Atour (ATAT), China's leading upper-midscale hotel operator. Atour's asset-light model and clear expansion path make it a compelling opportunity in China's hospitality market.
Americas
Best Anchor Stocks on Danaher's Q3( 🇺🇸DHR US - $184 billion) Leading life sciences and diagnostics company showing strong operational execution despite market headwinds. Core licensing revenue growing with 8% CAGR and margin expansion potential.
Deep Fundamental Research on Hawkins (🇺🇸HWKN US - $2.8 billion) Resilient chemicals distributor with expanding margins and strong competitive position in water treatment. Trading at 7x earnings with clear growth runway in water treatment segment.
Koneko Research on Star Holdings (🇺🇸STHO US - $200 million) Trading at 60% discount to NAV with concrete progress on Asbury Park development and Magnolia Green asset sales. Multiple catalysts could drive 40% IRR through 2027.
Unemployed Value Degen on Heartland Express (🇺🇸HTLD US - $900 million) Well-managed trucking company trading at 6.5x earnings ahead of expected end to destocking cycle. Strong management track record of M&A integration with potential for margin expansion.
Value Don't Lie on MDU Resources/Everus (🇺🇸MDU US - $4.2 billion) Infrastructure services spin-off trading at discount to peers with significant backlog. Direct exposure to federal spending initiatives and infrastructure bill benefits.
Rijnberk InvestInsights on Texas Instruments (🇺🇸TXN US - $150 billion) Leading analog semiconductor manufacturer trading at attractive valuation with strong competitive advantages. High margin profile and efficient capital allocation drive superior returns on capital.
Value Punks on Disney (🇺🇸DIS US - $200 billion) Trading below historical multiples despite strong content pipeline and parks recovery. Licensing segment provides high-margin growth while US parks expansion drives operating leverage.
Unemployed Value Degen on Alico Inc (🇺🇸ALCO US - $200 million) Florida citrus producer trading at 60% of land value with potential development upside. Strategic land holdings and agricultural operations provide multiple ways to win.
Europe, Middle East & Africa
European Value Investor on EssilorLuxottica Part III (🇫🇷EL FP - €180 billion) Part three of a comprehensive four-part deep dive into the eyewear giant. Dominant player controlling 30%+ market share through vertical integration and ownership of key brands like Ray-Ban. Trades at reasonable valuation given competitive moats and growth runway.
Simon's Substack on British American Tobacco (🇬🇧BATS LN - £50 billion) Leading tobacco company making significant push into digital manufacturing and licensing. Strong core business funds transition while trading at attractive multiple.
Invariant on Philip Morris International (🇺🇸PM US - $140 billion) Global tobacco leader with successful IQOS platform driving growth. Trading at attractive valuation with high-margin licensing revenue providing upside optionality.
The Mikro Kap on Sanderson Design Group (🇬🇧SDG LN - £50 million) Premium British interior furnishings company trading at significant discount despite strong brands and licensing growth. US expansion and digital initiatives provide upside catalysts.
Eloy Fernández Deep Research on Keystone Law Group (🇬🇧KEYS LN - £185 million) Innovative legal services platform with asset-light model and high returns on capital. Strong organic growth potential in disrupting traditional law firm model.
Raging Bull Investments on Northern Ocean (🇳🇴NOL NO - $150 million) High-spec harsh environment drilling assets trading at significant discount to replacement cost. Recent recapitalization provides runway for market recovery.
Small Cap Treasures on Intellego Technologies (🇸🇪INT SS - SEK 630 million) Leading UV indicator technology company with strong IP portfolio. Trading at 7x earnings with significant growth potential in medical and industrial markets.
Asia-Pacific
MileHighMonk and East Asia Stock Insights on Atour (start here, then read this ) (🇨🇳ATAT US - $1.4 billion) Leading Chinese hotel chain showing impressive RevPAR growth of 31% CAGR and margin expansion. Trading at attractive valuation with clear runway for continued growth through brand expansion.
ToffCap on DGL Group (🇦🇺DGL AU - $600 million) Chemical distribution company with strong market position in Australia/NZ. Trading at 25x P/E with potential for margin expansion through digital manufacturing transition and water treatment growth.
Silver Bulletin - The border may tip the election to Trump Detailed analysis of immigration's outsized role in the upcoming election, with fascinating poll breakdowns. Essential reading for understanding potential market impacts. (Estimated reading time: 15 min)
Giles Capital - Navigating the 2024 US Presidential Election: An Investment Framework (Written by yours truly) Building on Silver's analysis, I provide a comprehensive framework for positioning portfolios ahead of the election, with 48 actionable ideas across sectors. My research suggests significant rotation potential across multiple sectors. (Estimated reading time: 24 min)
Leonid's Substack - Some thoughts on US/China relations Insightful analysis of trade dynamics and potential policy shifts under different administration scenarios. (Estimated reading time: 15 min)
Stock Picker's Corner - Two Ways to Profit From Nuclear's AI Infusion Fascinating analysis of how AI is transforming the nuclear industry, with specific focus on Southern Company and GE Vernova. (Estimated reading time: 20 min)
Deep Value Mining - Nuclear Power: The Case for a Sector Rotation Comprehensive overview of the nuclear power sector's potential renaissance, with detailed analysis of key players. (Estimated reading time: 25 min)
Noahpinion - Why America's future could hinge on Elon Musk Thought-provoking piece examining Musk's strategic importance in US manufacturing and space capabilities. Critical context for tech investors. (Estimated reading time: 20 min)
UncoverAlpha - The future of consumer devices - AI assistants Thoughtful analysis of AI's impact on consumer technology, particularly Meta's strategic positioning. (Estimated reading time: 20 min)
Kingswell - The Intelligent Investor at 75 Excellent review of the new edition, with insights on Graham's enduring principles and modern applications. (Estimated reading time: 15 min)
Alpha Exponent - Duan the Dilettante Fascinating profile of a successful Asian investor with unique insights into capital allocation. (Estimated reading time: 15 min)
Currently, I’m only featuring free content. If you're a writer producing free, insightful investment analysis and would like to be considered for inclusion, feel free to reach out. What would you like to see in future editions? Let me know in the comments.
Disclaimer: This newsletter is for informational purposes only and does not constitute investment advice. All opinions expressed are those of the quoted authors and do not necessarily reflect the views of the newsletter creator. Always do your own research before making investment decisions.
Thanks for the shoutout :-)