- We recently covered DOOO with a slightly negative hit at the potential troubles it might have on the supply side.
- Upon review, we realized that DOOO is, however, too cheap at current prices, due to its substantial reinvestment opportunities thanks to growing, profitable markets.
- Taking a target multiple analysis, using a major incremental investment they are doing in manufacturing facilities in Juarez, we can establish that there is substantial upside.
- Capital redeployment at high rates is the most important thing of all for value creation, indeed even our deep-dive data science initiative some months back indicates it.
- We take a position in DOOO, accepting the possibility of some medium-term hurt.
For further details see:
BRP Inc. Produces A Lot Of Cash, And Can Invest It Profitably