Bel Fuse Inc. (BELFB), mcap=$333m, price $26.33 vs $26.08

$BELFB pitch:
– Electronics components manufacturer in the early innings of credible and so far successful turnaround led by new CEO.
– Trades at 5x-6x EBITDA, well below peers.
– Significant strides have already been made and results of the last few quarters have derisked the story.
– Plenty of low-hanging fruit left that will allow company to double its EBITDA margins to 15% and in turn drive re-rating closer to peer multiples.
– Due to a lack of oversight some-pockets of the business was operating at negative gross margins.
– Aside from the company-specific story – long-term secular tailwinds in “electrification of everything”.

$BELFB valuation:
– Trades at 6x LTM EBITDA and 5x fwd EBITDA.
– Comps are at 8x-12x.
– With 15% margins BELFB is set to reach EBITDA of $100m and at an 8x multiple would be $64 stock.

Exp. gain: +150% to $64/share over 3-5 years.

Full BELFB write-up (free guest account required):

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