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"Samsonite at half price"

Kategorie: Blog

by Siddharth Mehta-Thomas, Beaconsfield Investment Management, advising on ACATIS Investment

Samsonite Ltd is the world's largest manufacturer of luggage and travel accessories. The company has nearly $4 billion in sales with contributions from Asia accounting for nearly 45% of total sales. Its brands range from Samsonite, TUMI to budget brand American Tourister. The stock has dropped over 45% thanks to a weak trading environment over the past year.

In 2018 alone it generated pre-tax profits of over $340 million with equivalent operating cash flows.

We believe its current market capitalisation of $2.9 billion grossly undervalues the business. When one considers that Samsonite itself paid nearly 3x sales ($1.8 billion) to acquire TUMI in 2016, and assuming we use even a 1.5x sales multiple, Samsonite could be worth at least double its current market value – at least in our opinion.

The share makes part of our ACATIS Asia Pacific Plus Fund.

Our Disclaimer applies to the share report.

Photo: Siddharth Mehta-Thomas

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