In a recent discussion, Greg Dean, lead investor at Langdon Equity Partners, shared his top investment picks, highlighting three companies that stand out in their respective markets. These selections reflect a mix of stability, growth potential, and strategic positioning in their industries.
Key Takeaways
- A&W: A Canadian fast-food chain with a strong dividend yield and growth potential.
- BayCurrent: A Japanese IT consulting firm with significant room for growth in a lagging market.
- SmartCraft ASA: A Norwegian company focused on construction software solutions with strong margins and growth prospects.
A&W: A Canadian Classic
A&W is not just a fast-food chain; it’s a piece of Canadian history. Recently, they made headlines by buying out their general partnership interest, transitioning from a royalty-based model to a more integrated operating structure. This change is significant because it allows A&W to control its operations more directly.
- Dividend Yield: Almost 6%
- Growth: Projected 10% growth in both top and bottom lines.
This shift has attracted a new type of investor, moving away from those who preferred the old income trust model. The company has a long-standing reputation, having had only three CEOs in its 50-year history, which speaks to its stability. With the introduction of new products like coffee across all locations, A&W is poised for growth.
BayCurrent: Japan’s IT Innovator
Next up is BayCurrent, an IT strategy consulting firm based in Tokyo. Think of it as Japan’s version of Accenture, but with a twist. BayCurrent is growing faster and has higher margins than its Western counterpart. The founder still runs the business, which adds a personal touch to its operations.
- Market Position: Japan is about 15-20 years behind in modernizing its IT infrastructure.
- Growth Rate: Expected revenue growth of nearly 20%.
Investing in BayCurrent is like getting in on the ground floor of a tech revolution in Japan. With a reasonable valuation at 15 times cash earnings, it remains an attractive option for investors looking for growth in a market that is just beginning to catch up.
SmartCraft ASA: The Construction Software Leader
Finally, we have SmartCraft ASA, a Norwegian company that specializes in software solutions for the construction industry. This company is a hidden gem, operating with margins close to 40%. They are currently investing in replatforming their software, which is essential for staying competitive.
- Business Model: Low-cost solutions aimed at automating tasks for electricians and plumbers.
- Growth Potential: Expected organic growth in the mid-teens, plus opportunities for mergers and acquisitions.
SmartCraft’s approach is straightforward: they offer affordable solutions that replace outdated methods like pen and paper. With almost no debt and a strong management team, this company is well-positioned for long-term success.
Conclusion
Greg Dean’s picks—A&W, BayCurrent, and SmartCraft ASA—represent a blend of stability and growth potential across different sectors. Each company has its unique strengths and market opportunities, making them worthy of consideration for any investor looking to diversify their portfolio. As always, it’s essential to do your own research and consider your investment strategy before diving in.
