Brembo (BRE IM) Italy
Consumer Discretionary
Enjoying a strong recovery in margins and ROE following a period of heavy investment that had depressed returns - recent results surprised many analysts with the strength of profit growth and Andrew Hollingworth thinks the group will soon get back to 10% net margins. Were it to do so on this years’ sales of c.€3.5bn then net income would be €350m. This compares with a M/Cap of c.€3bn so a PE of just 8.5x. That's too cheap for a tech leader in its field (c. 90% market share in aluminium brake callipers) that has compounded book value per share at c.16% for 20+ years.
Edition: 146
- 14 October, 2022