Thanks for the write-up! Even as a Belgian, I never looked in depth at Bekaert. Here's an overview of my (lazy) perception from occasionally briefly glancing at the company:
- Before new management: cyclical debt-laden european industrial (stay away!)
- New mgmt: ok, has potential, but need to see results
- 2021: temporarily inflated profits, "don't buy on cyclical peak of earnings!"
- red flags in quick CEO turnover
- 2023-now: insider share sales
I assume i'm not the only one who looked at the stock like this.
Thanks for highlighting the company. Seems like it has more potential than I thought
Thanks for your comment. It's extremely valuable to know what the typical perception of a stock is from someone close enough to know about the name.
I am not claiming that Bekaert is the best company I've written up. On the contrary, it's clearly one of the weaker ones. Nonetheless, I think there could be a good opportunity. My impression is that the stock is widely disliked and/or ignored, whereas I am tentatively prepared to give the new regime some credit for real improvements.
It seems that the CEO handover in 2023 was according to plan, from an interim stabilising CEO to a longer-term occupant of the post. Clearly the new guy has to prove his own track record for execution.
Generally a CFO departure / change is never welcome.
In this case, I am intrigued about the replacement. Seppo Parvi is a genuine big hitter from a company four times Bekaert's market value. He resigned already in mid May "to assume a role with a company outside of the forest industry". This degree of advanced planning and consideration is somewhat reassuring.
Therefore I am inclined to take an optimistic view, and consider that the chairman is aiming to upgrade the execution capabilities of the executive team, both here as with the CEO change.
Hi Alex, great write-up. Indeed an iteresting set-up.
Back in my mind I have stored the info, that Electric Vehicles due to their weight need to change tires more often. Depending on EV penetration, that could be a small tailwind for the tire business.
I agree, the EV transition is interesting for the tyre sector in general (both mix and frequency), as well as Bekaert in particular with its ultra tensile product.
Toyo Tire is a nice name with a relatively big position in the niche of US oversized tires for pickup truck enthusiasts. Incredibly cheap headline multiple, though I haven’t reviewed the recent financials to see what’s going on under the hood.
Thanks for the write-up! Even as a Belgian, I never looked in depth at Bekaert. Here's an overview of my (lazy) perception from occasionally briefly glancing at the company:
- Before new management: cyclical debt-laden european industrial (stay away!)
- New mgmt: ok, has potential, but need to see results
- 2021: temporarily inflated profits, "don't buy on cyclical peak of earnings!"
- red flags in quick CEO turnover
- 2023-now: insider share sales
I assume i'm not the only one who looked at the stock like this.
Thanks for highlighting the company. Seems like it has more potential than I thought
Thanks for your comment. It's extremely valuable to know what the typical perception of a stock is from someone close enough to know about the name.
I am not claiming that Bekaert is the best company I've written up. On the contrary, it's clearly one of the weaker ones. Nonetheless, I think there could be a good opportunity. My impression is that the stock is widely disliked and/or ignored, whereas I am tentatively prepared to give the new regime some credit for real improvements.
It seems that the CEO handover in 2023 was according to plan, from an interim stabilising CEO to a longer-term occupant of the post. Clearly the new guy has to prove his own track record for execution.
Very in depth analysis Alex . Interesting to hear what happened to Bridon after Melrose sold it . Thanks for your efforts .
You're welcome! Many thanks for your kind comment.
Beware of buying something that Melrose is offering for sale? (Not sure how their other disposals have fared.)
Any thoughts on CFO Boussaid leaving in August?
I'm usually excited when a new chairman (Tinggren), appoints some new people (Schmid & Boussaid) to get the job done.
I'm usually a bit worried when those people leave before the market believes that the company is fixed/better/turned around.
Can always be coincidence & I have no empirical data to back this up though!
Generally a CFO departure / change is never welcome.
In this case, I am intrigued about the replacement. Seppo Parvi is a genuine big hitter from a company four times Bekaert's market value. He resigned already in mid May "to assume a role with a company outside of the forest industry". This degree of advanced planning and consideration is somewhat reassuring.
Therefore I am inclined to take an optimistic view, and consider that the chairman is aiming to upgrade the execution capabilities of the executive team, both here as with the CEO change.
Thanks, appreciate the reply!
Hi Alex, great write-up. Indeed an iteresting set-up.
Back in my mind I have stored the info, that Electric Vehicles due to their weight need to change tires more often. Depending on EV penetration, that could be a small tailwind for the tire business.
I agree, the EV transition is interesting for the tyre sector in general (both mix and frequency), as well as Bekaert in particular with its ultra tensile product.
Toyo Tire is a nice name with a relatively big position in the niche of US oversized tires for pickup truck enthusiasts. Incredibly cheap headline multiple, though I haven’t reviewed the recent financials to see what’s going on under the hood.
I am sure its profits are having a great day with the yen depreciation...
Thanks for the analysis, Alex.