Alpha Vulture
Deep value, special situations, long-term horizon, micro-cap

Conduril: My Highest Conviction Pick

Conduril (OTC:CNDUF) is a Portuguese construction firm, and just based on that fact you would probably expect that we are looking at a struggling business. You couldn't be further away from the truth though: Conduril compounded book value at a 32% annualized rate since 2006 while paying a nice dividend. The business is performing well because they have successfully diversified away from Portugal: in the first half of 2013, their home country accounted for just 7% of revenue. Despite Conduril's profitability it's trading at a dirt cheap valuation on every conceivable metric: it's trading at a 36% discount to NCAV, at a 0.5x P/B ratio, a 3.4x P/E ratio and an 1.45x EV/EBITDA multiple.

Why the opportunity exists...

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