Contributor Pitch On London Based Building Services Stock Proves Timelier Than Expected [Case Study]

Congrats are in order for Paul Tschischik. His microcap stock pitch he made on GeoInvestng’s Pro Portal has risen 44.32%.

On August 23, 2023  Paul made his first ever appearance on our Investor Insights Skull Session platform. Paul, a part time special situations investor/financial analyst, known as @Investmentideen on Twitter, introduced Maj to a UK based company, Kinovoa, PLC. (KINO.L) (OOTC:BILBF).

Part of his thesis revolved around the potential of a hostile takeover due the stock’s very low valuation – one of the lowest in the industry.

We briefly summarized Paul’s pitch on the company:

“…a UK-based business with a market capitalization of around £26-28 million and an enterprise value of about £32 million. The company specializes in IT services and installations related to buildings, such as sprinklers, heating boilers, solar panels, and electrical vehicle chargers.

Paul discusses the company’s recent history of poor capital allocation, which led to financial difficulties and near bankruptcy. The business was subsequently restructured, and a new CEO took charge. Paul is optimistic about the CEO’s approach to capital allocation, emphasizing that he focuses on profitability and valuations rather than just pursuing revenue growth. Paul believes that the company has growth potential through both organic growth and mergers and acquisitions. He praises the CEO’s approach to realigning projects for higher returns.”

On September 1, Paul tweeted an in-depth investment case and valuation for Kinovo. 

#KINO $KINO.L KINOVO

Here is my updated investment case for KINOVO + Valuation

I believe that the current non-binding offer of 56p/share undervalues the business significantly and is an attempt to rip current shareholders off.

Any offer below 130p/share doesn’t value the… pic.twitter.com/s8vKFGxl59

— Paul, not a CFA (@Investmentideen) September 1, 2023

In the tweet, he highlighted his convictions of the stock:

“I believe that the current non-binding offer of 56p/share undervalues the business significantly and is an attempt to rip current shareholders off. 

Any offer below 130p/share doesn’t value the businesses long-term potential. Tim Scott shared in his most recent RNS that he’s willing to frighten current shareholders.

I believe that we – the shareholder, will leave a lot of money on the table if we accept any future offer and have to be cautious not to accept a low offer.”

He went on to lay out 4 different scenarios for Kinovo on how organic growth, M&A and expansions will help the company reach his price target. 

• Scenario 1: Organic Growth + Return of Capital (dividends/buybacks) – GBX 119/share
• Scenario 2: Organic Growth + Acquisitions at 5x EBITA / 6,67x ANI – Price Target: GBX 131/share
• Scenario 3: Organic Growth + M&A + Multiple Expansion – Price Target: GBX 176/share
• Scenario 4: Organic Growth + 2x DCB Liability – Price Target: GBX 113/share

When Paul originally pitched the company to GeoInvesting Premium Subscribers on August 23, 2023, the company was trading at CBX $48.50

On January 22, 2024, referencing is prior message, Paul sent out another tweet, sharing that the stock was near his $70 price target, which it did actually go on to hit shortly thereafter, a 44.32% peak gain:

We hit my 2024 target much faster than expected.

KINO close to 70p now. https://t.co/cKzSGtf1HQ

— Paul, not a CFA (@Investmentideen) January 22, 2024

This is why we place such a strong focus on our Skull Session Events for our Premium Subscribers, placing them in a front row seat as our research team engages in deep discussions with the best handpicked investors, industry experts to help us learn about companies we are researching and management teams of Top Tier microcap stocks. You won’t get this combination of video/podcast content and associated volume of information on microcap stocks from any of our competitors.

Attending these events gives you an investing edge, being first in line to new information. 

(These events are also archived at a special area on GeoInvesting for those who are unable to attend them live.)

By becoming a GeoInvesting Premium Subscriber today, you can gain access to Paul’s entire Skull Session Investor Insight videos, full access to all 15 years of research at GeoInvesting’s Pro Portal, and all of our upcoming Investor Insights events.

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