Views on Life & on Equity Investing

Wonder, Wealth & Abundance

ABDP UK – Dream investment

with 10 comments

What a dream type of investment this was for a buy and hold investor – ABDP UK Ltd.

I earlier wrote about it here: https://lifeandequities.wordpress.com/2018/04/13/abdp-uk-ltd/

https://www.abdynamics.com/

Since the IPO in 2013 the company has been a 13+ bagger since placing its share on AIM market at 86 cents per share.

i.e. 68% CAGR since the IPO.

They were always punching above weight and had blue chip clients to start with. I had bought it for the Fund and investors sometime in September-October 2017 at ~5 GBP at 22 times earnings and 5 times revenues and sold recently at ~10 GBP.

ABDP

What the company does ?

It makes driver-less testing cars and motorcycles software and hardware.

Who uses it?

All automotive companies in the world

Why I bought it?

Two reasons:

1/ Because I read a statement in its corporate presentation “Our products are routinely used by 20 out of 20 top automotive companies globally”.

One qualitative statement is all you need sometimes than a boat load of scuttlebutt! I knew that everybody’s uncle is investing in driverless car for R&D.

2/ Company was expanding factory to meet more demand

Other reasons:

3/ I love companies that are Global and not dependent on single geography

4/ Niche company with the primary sin of being a small cap. The best kind of sin. I don’t yet, have the problem of investing 100s of millions of dollars.

Why I sold?

I get uncomfortable when a company trades at 10 times revenues and 50 times earnings if the juice of efficiency and operating leverage has been extracted and the secular growth is not above 30%.

The company could still be a long run winner and have respectable growth of 20-25% in revenues ahead but I don’t think it will be easy to replicate the past performance in stock price now that it trades at 50 times earnings. Something very spectacular would have to happen to grow at even 30% CAGR in share price let alone 68% that it did in the past.

I think its time for individual and small institutions to quit and let the big Funds who are satisfied with 10% CAGR invest in it.

6 out 10 such investments is all one needs. Damn, I will be satisfied with 5 out of 10.

 

Disclosure: Vested interest in positions discussed. Views are personal notions and do not represent any organisation or company. Investment in stock market can (and many a times do) result in loss of principal capital.

http://www.elevendimension-funds.com

 

Written by amitdipsite

June 23, 2018 at 9:57 pm

Posted in Uncategorized

10 Responses

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  1. Hi Amit,

    Is sharp India a good stock to buy for long term, promoter holding is also very good, kindly suggest.

    Regards,
    Shailesh

    Shailesh

    June 26, 2018 at 8:10 pm

  2. Hi Amit Good day,

    As you track muthoot capital do you like the business for the next 5 yrs, can the stock go the bajaj finance way, also muthoot microfinance IPO is also going to come is it also a buy for you.

    Regards
    Shailesh

    Shailesh

    July 29, 2018 at 5:47 pm

  3. Amit Saheb, Salam and Greetings.
    Maana ke tere deed ke qabil nahi hu main,
    Tu mera shauq to dekh, mera intezaar dekh.
    Sirjee, Long long time – no write ups on your blog. It seems you are on a long holiday.
    Best warm regards – Shaukat Ali

    shaukat ali

    August 7, 2018 at 8:31 am

    • My dear Shaukat Ali ji

      Duur khamoosh baitha rehta huun
      Isi tarah haal dil ka kehta huun

      Not sure what to write. Next 12 months should be life changing for small cap investors IMO.

      Best wishes and dua

      amitdipsite

      August 12, 2018 at 3:54 am

      • Dear Amit Saheb,
        A Very Good Morning. Sat Sri Akaal. Salam.
        So happy to see you back on the blog. Believe you me, not finding your posts on the blog had made me to contact you on site of Eleven Dimension Funds and, I opened up the contact form. However, on reading the details of the minimum requirement of US$ 15,000 for investment took the wind out of my sails. I savoured the ‘Duur’, ‘Khaamosh’ and ‘dil ka haal’. So true. Khamoshi is a language never fully understood except of course by the shayars and seers. Agle barah mahine ke life changing small caps ka ek ishaara to den. Ham Garibon ko shayad kuch mil jaye.
        Best warm regards and Dua.

        shaukat ali

        August 12, 2018 at 4:53 am

        • Dear Shaukat

          Thanks

          I am try to add every week Satin Creditcare, Reliance Home Finance, Muthoot Finance, Manappuram, Akme Star Housing, MRSS, Secur Credentials, Tejnaksh, GIC Housing etc.

          Best wishes

          PS: You can ask God for 1000 Trillion Dollars also being his Son, please get the beggar mindset out. Please be persistent with Him and in your efforts.

          amitdipsite

          August 12, 2018 at 6:42 pm

      • Life changing in a good or bad way?

        findmyvenue

        August 12, 2018 at 2:58 pm

  4. Hi Amit – This is not related to topic, but a personal favour.

    I am visiting New Zealand – Queenstown end Sep and I have done all booking. However I have an issue related to Driving license. My current driving license is issued about 20’years back and it is of “book” type.

    I checked with car rental companies. One of them confirmed it is valid and other one said book type are not allowed by NZ transport agency. I could not find any reference on NZ transport agency or web.

    Have you come across such issues?

    Any feedback would be useful.

    Regards

    hillviewglobal

    August 16, 2018 at 7:22 am

    • Hello Prashant

      If you are able to bring ENGLISH translation of that Drivers licence from an approved translator, then you should be OK.

      Best regards
      Amit

      amitdipsite

      August 20, 2018 at 12:50 am


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