2025 July Idea: This High-Quality Compounder is on Sale

One great idea each month

This month’s idea features a high-quality, value-oriented brand that we believe is trading at a significant discount of ~35% to its intrinsic value. The company is currently valued at historically low multiples, with a TTM EV/EBITDA of just 6.1x compared to its four-year average of 9.2x. This is despite a decade of remarkable performance, delivering a revenue CAGR of 10.3% and an operating income CAGR of 11.9%, all while consistently achieving Returns on Equity in excess of 25%.

The market has recently punished the stock following a profit warning, creating what we see as a compelling entry point. This is a business with strong fundamentals, a robust growth strategy, and a debt-free balance sheet, now available at a price that fails to reflect its long-term potential.