Rexel (RXEEY), mcap=$4.6bn, price $14.69 vs $18.74

– Global distributor of electrical products.
– Sells 55% to Europe, 35% to NA, and 10% to Asia.
– The business benefits from the secular shift to electrification and is expected to grow above its historic low-single-digit rate.
– Activist brought new management in 2016 and subsequently, the company invested heavily in digitalization and improved customer retention.
– Preferred supplier due to good service and availability rather than the lowest price.
– Fragmented industry where smaller competitors are unable to keep up investments with the likes of RXEEY.
– Further industry consolidation should drive margin improvement from 5% to 6%.

Trades at just 8.5x 2022 earnings with EPS expected to grow at 10%+.

Exp. gain: +50%

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

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