Forum Topics Strawman Meeting Guests
ballermania
2 months ago

Hey @Strawman wondering if there is any chance of getting a meeting with the management of CLG, very cheap trading at 6/7x full year NPATA, with obviously very strong tailwinds and several growth avenues. I have a small holding and selfishly would love to get to know the business better, and its stock that doesn't seem to get much attention amongst investors despite the clear value.

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Strawman
2 months ago

You bet @ballermania

I'll see what I can do.

What's the high level thesis here? I've not looked, but keen to see what it is about the company that has caught your eye.

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ballermania
2 months ago

Close the Loop has a bit of a messy history just due to a number of acquisitions that muddy the financials. 

Essentially they have 2 business segments packaging and resource recovery, both segments recover pre-used goods and repurpose them into usable products. The packaging segment deals with repurposing soft plastics and paper to make products such as food packaging, receipt paper, plastic regrinds, bulk packaging, and seafood packaging while the Resource recovery segment recovers perused items such as print cartridges, batteries, cosmetics and electronics and helps sort and repurpose them to reuse or to resell. Both segments can and do partner with clients to meet their specific recycling needs and given a low percentage of products that can be recycled actually are they are seeing strong demand as businesses become more conscious of the environment along with the fact it’s cheaper for them to reuse products. The business maintains very decent margins of 20%+ and 12%+ for EBITDA and NPAT respectively. 

They have some proprietary products such as Toner Plus which uses soft plastics as an asphalt additive and Rflex which is a repurposed plastic for manufacturers. They are seeing strong demand within the resource recovery space especially from their recent acquisition: ISP tek services which helps repurpose electronics for OEMs which they are rolling out throughout Europe and may actually be an AI beneficiary as they are seeing strong demand with what they call ITAD which is recycling of data centre servers. 

The 2 founders own 12% each, and while the business has made a number of acquisitions they have stated they are not a roll-up but wait for value-adding acquisition, and for a capital-intensive business with network effects, scale benefits and cross-selling abilities there are many synergies from acquisitions. The business has $56m in cash with $78m in debt, and reduced net debt by $12m in H1 and currently looking to just pay down debt and consolidate their acquisitions. 

Despite shipping delays in H1 within the packaging division which saw a revenue decline they upgraded guidance to $200m+ in rev and EBITDA of $44 to $46m for the full year, which should equally NPATA of ~$26m for the full year.  

CLG currently trades at a market cap of $159m equal to 6.1x full-year earnings. The business won’t revolutionise the world, but 6x earnings to too cheap IMO, and as they continue to repay their debt and grow earnings organically and potentially inorganically the value should be recognised. 

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Strawman
2 months ago

Appreciate that @ballermania -- it does seem cheap. My first instinct was to assume that must mean the business is shrinking, but they just upgraded guidance.

CEO Joe Foster said he'll be available in May. So we'll lock something in shortly.

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Saasquatch
2 months ago

Hi @Strawman

I wonder if it's worth getting the CEO of Bitcoin in to do an interview for the upcoming halving?

As we all well know, it is fact, that our Bitcoin will drop in half due to the dilutive factors that are prevalent throughout the asset.

Jokes aside...

Do you have any BTC guests coming up?

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Strawman
2 months ago

Ha, maybe we should line something up with the IR department @Saasquatch :)

I don't have anything organized right now, but would certainly be happy to if you have any suggestions (be reasonable though, Michael Saylor may be a hard get..).

Bitcoin is not a priority for most members, and at worst is seen as a distraction (and potentially a dangerous one at that), so I try to not deviate too far from our stock focus. But, people can mute topics they don't like and can simply avoid any meetings they don't find of interest.

As you know, I'm a fan and hope that we can provide some sensible discussion and debate on the topic. So let us know if there are any voices you'd like to hear from.

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Saasquatch
2 months ago

I respect your view to the forum sticking to stocks. The ETF's launch and success in the US and now listings in Hong Kong as well as the UK certainly a giving merit to Bitcoin as a legitimate investment asset. Given its listed here under EBTC as a spot price ETF I think it's becoming more of a reasonable topic for discussion within investing circles.

Some potential guests:

Dale Warburton runs 'The Why Bitcoin Show' podcast. Lives in Brisbane but is from South Africa. He is a former lawyer and quite good.

Perhaps someone from GlobalX: the ASX: EBTC etf provider.

Or one of your contacts from the Bitcoin Alive conference.

Also Nicholas Bowick was recently on 'What Bitcoin Did' podcast with Peter McCormack and that was really interesting. His twitter is @DarthPeebles and episode is here for those interested

https://open.spotify.com/episode/48PyH8Ow2ocLO3apDN08iB?si=5YnjSUSoTTWH5JsRVyHGsw


Just ideas. See how ya go and if you're interested. They would provide value to members.

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Strawman
2 months ago

I'm with you @Saasquatch -- there's rational objection and then there's baseless FUD. I cant nominate a single measurable factor that points to anything other than network growth, so at the very least it's something you need to be aware of as an investor this century.

Let me see what I can line up.

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RhinoInvestor
2 months ago

@Saasquatch if you can’t get enough bitcoin or @Strawman can’t get someone on the forum, check out the following … every week Preston talks about some sort of bitcoin topic with a guest of some sort. There are some pretty interesting topics on there about what the big entities might do with bitcoin in the ETFs … link below just the latest in the bitcoin series.

https://podcasts.apple.com/au/podcast/we-study-billionaires-the-investors-podcast-network/id928933489?i=1000651961731

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Dominator
2 months ago

Hi @Strawman

Would be interested in hearing from Matthew Lamont, MD and founder of DUG.

Cheers

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Strawman
2 months ago

I'll give it a go @Dominator

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G'day @Strawman,

Can we please see if we can request the following companies to address strawman's members.

1) SDR - Siteminder ( I think this company is at the inflection point and serving global customers. i believe it has high potential

2) CAT - Catapult ( Again at the inflection point, CEO doing a great job. love to hear what they are thinking now)

3) HPG - Highpage ( Tradie marketplace, I have been following the company for couple of years and it is doing what it said it will do.. some nice product development is going on there - love to hear what's the future they are aiming for)

4) STG ( Straker) and AIM ( AI- MEdia) - They both are punished by market in last few years, working in simmilar sort of industry and fundamantally companies are progressing well. worth speaking to both of them to understand the industry and how they are thinking the trends

5) KME - Would like to know where CEO head lies...and how he thinks of running business keeping recent results in mind



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Strawman
3 months ago

Hi @Valueinvestor0909 -- leave it with me, I'll see if we can get them along. Most have talked with us before so I'm sure we can line up some meetings.

Actually, managed to lock in Darryl Abotomey from Adrad for next week too, which should be a good one.


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mushroompanda
3 months ago

+1 for STG and AIM, especially the latter. In terms of AI disruption, these two are the canary in the coal mine and right in the midst of being heavily impacted.

I have a feeling the two companies will have fundamentally different views of the longevity of humans remaining in the loop for translation and transcription.

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Any success with any of these @Strawman .

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Strawman
a month ago

Not as yet @Valueinvestor0909 -- although Catapult have said they should be able to line something up. I'll give the others a nudge now.

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