ARGKF - Aggreko plc (UK)

[ASTA]

Another stock for your parents?

First of my GFS stock recommendation is down 3% so take my recommendations with a grain of salt.

 

I personally have not bought this stock but will maybe tomorrow.

 

Very simple theses:

Created the industry of Temp power to events like Olympic games and world cup events. The leader and biggest player a strong Moat play. also has power plant subsidiary.

Why this stock? of course I copied someone.

The Idea is discussed by Matthias Riechert co-founder and portfolio manager at Polleit & Riechert Investment Management for 30 power point slides and 1h on MOI Members website.

Maybe not every one has access but his presentation is very thorough so I am not going to expand.

What else then a presentation from an unknown 1 year old fund?

FPA International has a been buying this stock over a year and is at 5.27% of there portfolio. And basically all FPA funds including FPA Cresent have bought this stock over the last year.

 

So feel like buying a company at a depressed 15/PE(no Olympics this year) and the opportunity by the company to reinvest there +40% margin in the company at a high ROE this is for you.

 

Hope I am contributing a bit

Cheers

 

 

 

[rpadebet]

Is it possible to attach the presentation?

[ASTA]

rpadebet

I think not as its for sure copy protected and I don't want to get sued ;D

[ASTA]

Well finally this stock went down to the level I wanted. Bought 7% position at 15.6 lets see how this one does :D

[mcliu]

Any thoughts on increasing competition from APR and APR's recent GE acquisition?

[Guest Qu1nt3ss0n]

Here are some thoughts on this blog: http://www.valuevista.co.uk/aggreko-and-apr-energy-beauty-and-the-beast-switch/

 

and this: http://www.valuevista.co.uk/aggreko-ims-and-analyst-projections/

 

FPA's International funds latest transcript (pg 22 onwards): http://www.valuewalk.com/2013/11/fpa-international-value-fund-letters/

 

Any thoughts on increasing competition from APR and APR's recent GE acquisition?

[ASTA]

Thanks for the update qu1nt3ss0n,

Been out of office for 4 weeks good to see some light from fpa int.

Still holding riding the wave of the over all market :)

[ASTA]

Nice to see Donald Yacktman likes my stock picks :D he bought .5% stake :D

[HJ]

Quick question about demand growth, beyond what the company talks about in their annual reports, which is potentially 2-3x GDP, with an emerging market tilt, and maybe also an industrial tilt, is there anything else one can read to get a feel for it?  The financial profile and the track record of the company really speaks for itself.  Given the amount of Capex the company reinvests into its business, does it basically sort of come down to "demand forecasting"?

[Nnejad]

Aggreko perhaps?

 

"Ukrainian authorities have described power cutoffs to Crimea this week as simply the result of technical maintenance and insist they would do nothing to harm residents. Russian officials have rushed to the rescue with hundreds of diesel generators and started drafting plans to connect the region's electrical grid to mainland Russia, which is separated from Crimea by the Kerch Strait. They said a possible water shortage could be offset by more efficient use of existing resources."

http://finance.yahoo.com/news/crimea-besieged-ukraine-control-power-water-163357319.html

 

[ASTA]

Donald Yacktman

double's his stake in AGK

http://www.gurufocus.com/

[ASTA]

Value Investor Insight interview with FPA International Value portfolio manager Pierre Py

 

http://www.fpafunds.com/media_folder/value-investor-insight-interview-with-fpa-international-value-portfolio-manager-pierre-py

 

I started this thread so just updating it. I have only made 8% plus pound increase slow but steady :D

[fisch777]

Did anyone notice Fairfax has taken a 10% stake in Aggreko's largest competitor APR Energy?  Aggreko is a higher-quality company for a number of reasons, but APR certainly trades on a lower multiple at the moment. 

 

Soros had a large stake in APR (even before IPO), but it appears he sold most (or all) earlier this year and the Soros representative stepped off the board

 

http://otp.investis.com/clients/uk/aprenergy/rns/regulatory-story.aspx?cid=311&newsid=445493

 

 

[ASTA]

Well my little fairytale stock idea has come to an end for me :) as fpa int has sold some of there shares and the pain in other places in the market. I sold my 6% stake today at least I did not loose much. I am sorry for this idea and hope my novice ideas in the future will be better.

[sys]

if i may ask, why have you changed your mind on aggreko?

[ASTA]

Well fpa int's decision to sell is not so good and I see more lucrative stocks. There is more pain in two stock I might buy on Monday so was shoring up some cash so I can buy. More then that I don't know as I am a bad investor so don't listen to me so much.

[cubsfan]

Well fpa int's decision to sell is not so good and I see more lucrative stocks. There is more pain in two stock I might buy on Monday so was shoring up some cash so I can buy. More then that I don't know as I am a bad investor so don't listen to me so much.

 

Aggreko is a great little company. A couple major things happened recently. The dynamic CEO resigned to work for

a bigger company, also the interim CEO (prior CFO) also left. It appeared that AGK owned this market, but now

APR may make some headway - can't really tell yet. FPA cut their large 7% position in half in Q3. I'll be interested

to see if the sell the remainder.

[eskebranded]

Interesting company, however the stock never looked cheap in my opinion. Even at these levels down 12% YTD, its still looks fairly valued at 18.7x NTM earnings estimates and 4.3x book which equates to a ROE of 5.11% on my money (if they repeat last years returns (22% ROE divided by 4.3 (P/B)) Seems fully valued right?

[fisch777]

APR is actually struggling mightily right now with heavy dependence on Libya.  Also aggressive accounting, London listing for Jax, FL company, it all doesn't add up.

 

Aggreko's business is much more diversified and the company produces capacity at a lower cost / MW than anyone in the industry.  That said, it is a lumpy business by nature, so lack of visibility is tough for the Street and many investors.

 

I listened to the FPA call - they are not bailing out.  They adjust position sizes around discount to IV, so it appears they cut at higher prices and have actually added again recently.  They also spoke very favorably of Chairman Hanna and his ability to continue to drive capital allocation discipline going forward with new management team.

 

Pound strength vs. EM currencies appears to be biggest headwind at the moment.

[Foreign Tuffett]

If anyone is interested in a Houston flood recovery play Aggreko would be a great place to start. There will probably be a nearly unlimited demand for industrial size dehumidifiers, air conditioning units, and generators in Houston once the flood waters recede. A recovery effort of this size will  take both months and all of the spare rental equipment that can be found in North America. Aggreko, with its North American bases of operations in Pearland, TX and New Iberia, LA is favorably positioned to move equipment into position quickly. 

 

Please don't interpret this post as a callous. The flooding in Houston is a terrible thing. Aggreko provides specialty rental equipment that can be essential for large scale emergency relief and recovery efforts.