My latest article published on Seeking Alpha. It’s on the iconic and global brand Moleskine. This is the same company that is all the rage right now among artists and professionals. It’s also makes a great gift.
Seeking Alpha has the rights to the article. For the full article you have to visit their site.
Reposted from Seeking Alpha
By Brian Langis
- Moleskine is an iconic and global brand. The Moleskine brand has developed a cult-like following.
- Over the years Moleskine has delivered continued double digit revenue and EBITDA growth.
- Solid balance sheet. Almost net cash (4.1m euros in debt).
- The notebooks are popular amongst professionals, artists, hipsters, and collectors.
- Slump in the share price is not justified. Moleskine is consistently matching or beating their targets. The market is not noticing.
Moleskine is primarily traded on the Milan stock exchange Borsa Italiana under the ticker MSK:IM, where there’s plenty of volume. I will be referring to the Italian symbol for the article.
Note: Dollar amounts are in Euro € unless mentioned otherwise. EUR-USD 1.1025. Price of 1 EURO in USD as of February 25, 2016.
Moleskine SpA (OTCPK:MOSKY) is an Italian manufacturer of luxury notebooks and other stationery items such as agendas, journals, bags and cases. The company might have an Italian headquarters, but its business is global. You would actually think it’s American with its Star Wars and Batman notebooks. Moleskine suffers from a lack of coverage. Except for one article in 2015 and (one in) 2013, there is no coverage on Seeking Alpha. Part of this article is to demonstrate this opportunity, and I sort of hope the article can spark further discussion on the investment merits of Moleskine. Throughout the article I will refer to journals, diaries, planners, agendas as “notebooks” for simplicity’s sake.
Moleskine’s business might be exploding but its stock is not. The stock has been trading on the Milan Stock Exchange since 2013. As the graph below demonstrates, the stock has been slumping since the IPO.
In this article I will provide my investment case for Moleskine. With a conservative approach, I believe the stock has a 30% to 40% upside from where it’s trading today. There are several catalysts that could turn the slump in the stock price around such as: continued growth at a double digit rate, more market coverage by analysts and the media that enhances the stock’s visibility, a share buyback program to take advantage of the discounted price, a take-over offer, and the market realization of the full value of Moleskine’s assets and brand. The current slump in the share price is unwarranted. Moleskine is consistently matching or beating their targets but the market is not noticing.
Revenge of Analog
You wouldn’t expect a paper notebook company to be successful in a digital world. Moleskine is not an isolated case of “old world” technology making a comeback, or simply refusing to disappear. Moleskine’s success is part of a movement that some have labelled the “revenge of the analog”, especially among the young people. The movement, where certain technologies and processes that have been rendered “obsolete” suddenly show new life and growth, even as the world becomes increasingly driven by digital technology. You can see this renaissance with business cards and the return of vinyl records.
For the full article and valuation, it’s available on Seeking Alpha since they have the rights to the article. Thank you for reading.