Sotera Health (SHC), mcap=$4920m

SHC pitch:
– Business with one of the strongest economic moats trading at a meaningful discount to intrinsic value.
– Sotera provides sterilization solutions for the medical-device and pharmaceutical companies.
– Its services are necessary to satisfy government regulations.
– Average customer tenure of 10+ years with minimal concentration.
– 100% renewal rate among its top ten customers.
– Future litigation uncertainty due to emissions from sterilization facilities is greatly derisked after a major lawsuit settlement.

SHC valuation:
– Used to trade at over 17x EBITDA before the lawsuit vs 12x current valuation.
– While not a perfect comparison, peer Steris trades at 17x EBITDA.
– At the same multiple SHC would trade around $26/share.

Exp. gain: 50%

Full write-up (free guest account required):