BERGER BANGLADESH – Long term investment
Banks want to lend funds to people who are money-wise do not really need cash but just happen to, for an urgent requirement. Likewise, we need to buy companies that do not need to be listed on stock market, have adequate cash flow, but are because of a freak accident or first generation entrepreneur.
Berger Bangladesh was listed because of similar freak incident. 5% shares are listed on Dhaka Stock Exchange. Market cap 2300 Crores, PE 20, Growth 20-25%.
CMP – 1000 BDT
Dividend – 22 BDT
Debt – 0
EPS for H1 = 27 BDT
Cash Flows – 180 Crores per annum, growing at 25% per annum
Competitive position is twice as strong as Asian Paints (35% market share in India ) in terms of market share – 60% market share in Bangladesh. Asian Paints sells at 52 PE, 6 times sales (no idea why? with 12-15% growth). Berger Bangladesh with better future and better past, current and expected future growth rates sells at 20 PE and 2 times sales.
Tie up with 2nd biggest paint company in the world, PPG
Also, another JV with Becker
The only end result of holding this stock for long term can be phenomenal compounding, wealth creation and financial riches. Can be a 10-15 bagger+ in a decade with very high stability in all
economic cycles, extremely attractive dividend payouts, will likely re-rate to 40+ PE eventually.
Don’t be fooled by the name Berger, in India it may have 17% market share but it is a monster, a 927 pound gorilla without any equal in Bangladesh.
Feel free to go crazy with your research.