Pinned valuation:
Valuation based on 20% Discount to NTA (currently trading at nearly 50%).
This company seems boring but well-managed with a long term, investor-orientated vision.
15% Operating Cashflow yield last year suggests strong fundamentals (perhaps slightly inflated).
3% returned to shareholders via buybacks and franked dividend.
Demonstrated growth (albeit lumpy and a bit complicated) and investment across all 3 pillars - wealth, education and equity.
As mentioned before by a strawperson this is a bit hard to see from any single metric. Their favoured metric varies by pillar, but it has been consistent as far back as I've looked with no changed goal posts. To be honest it all looks pretty solid to me under the hood.
This article here is a great summary of the business and the possible under-valuation https://stocksdownunder.com/teaminvest-private-group/
To me this is feeling like an bit of an asymmetrical bet. Like Silky - I'm interested to hear what I'm missing? Is it too boring (low growth)? The discount to NTA, recent strong cash generation, and the measured and demonstrated patience for growth have drawn me in.
Disc: Held IRL and SM
Hey @ChrisW. Always to interesting to hear a proposal for a company I've never heard about before. Never know what you'll find turning over new rocks. Probably need to turn over 20, or 100, before you find a real opportunity. But the winners can be worth it, and turning over unsuccessful rocks can still by enjoyable.
Here's a few questions, concerns I that jump to mind with Teaminvest:
- Lots of private equity companies have had to substantially reduce their book value in recent times. I'd want to know a lot more about their investments before I had any confidence in a claim that they are trading below NTA.
- A PE of 22 is high for a financial services/private equity company that hasn't grown in the last 5 years.
- I don't know anything about Stocks Down Under, so have to view their report with a lot of caution. Maybe they're good, I just don't know, but perhaps you do.
- I can't reconcile the revenue figures in the Stocks Down Under report with what I'm seeing elsewhere. In the SDU report, they say FY24 had $158m revenue. But I'm seeing $106m in SelfWealth. And FY25 was lower at $101m.
I'd need to better understand these issues before the company got on my watchlist.
The big problem I have with TIP, and the reason I don't think it will close that discount (assuming it should even be valued like a LIC, which I'm not sure it should) is that it is just far too complex a business for the size. A $46m company that looks like this is too small for instos and too cumbersome for privateers to be bothered with. Conglomerates are very hard to get the market to pay up for and microsized ones it is almost impossible. Especially with the level of "diversification" TIP has. It works for Buffett because he has 60 years of beating the market.
TeamInvest has a history of buying high quality listed businesses. I'm not sure that transfers over to very small, family businesses with no liquid exit options.
