– Diversey is a provider of cleaning products and services to institutional customers such as hospitals, hotels, and food and beverage producers.
– Stock is trading at a 50% discount from its Jan’22 levels due to the compression of margins and a strong USD.
– Headwinds are expected to turn into tailwinds as margins begin normalizing while the strong dollar seems to have topped.
– Plus DSEY operates a pretty sticky business and has a scale advantage over its peers usually the #1 or #2 player in most markets.
– Trades at 11x depressed 2022 EBITDA or 8x E2025 normalized EBITDA.
– At 10-12x EBITDA multiple, stock is worth $9-12/share.
Exp. gain: 47%-95%
Full write-up (free guest account required):
Diversey Holdings (DSEY), mcap=$1.99bn, price $6.14 vs $10.59