Unlocking a Deep-Value Opportunity in the Face of AI Disruption

A Hidden Gem with a P/FCF <2

Disclaimer: None of the below is financial advice, please read the longer disclaimer at the bottom.

I’ve recently been thinking about how one can make a big return on their investment and where that return can come from. I was watching the amazing Focused Compounding Podcast on Youtube specifically their video on where a return can come from:

1. Growth of the Earnings/Business

2. Dividend/Buybacks - Return capital to shareholders

3. Multiple Expansion

I typically want my investments to have all three of these drivers of price but I will take two or even one if the scenario is extreme enough. To that end I think I may have found a business that is so undervalued that just one of the value drivers above can change for one to make a huge MOIC (Multiple on Invested Capital).

I’ve also been thinking about the process of Inversion:

If you want to end up with a stock at a high price at the sell point then one necessarily needs to buy at an incredibly low price and the situations that I currently see as having the lowest price as follows. (Not Exhaustive)

DeSPACs

Chinese Stocks

AI/GLP-1 disrupted businesses

Bankruptcies

Rate Sensitive Businesses (REITs etc.)

The following stock is pulled from one of the categories above.