market folly

We're posting up notes from the 2017 London Value Investor Conference.  Next up is Charles Heenan of Kennox Asset Management who pitched a long of Texwinca (HKG: 0321).


Charles Heenan's Presentation at London Value Investor Conference

Long Texwinca (HKG: 0321) 

Charles Heenan does not buy companies that are trading for more than 12x earnings. He looks for quality sustainable franchises that are suffering temporary headwinds. He tries to take advantage of market over-reactions by focusing on the underlying health of a company, not a narrow view of short-term growth.

Texwinca’s share price has fallen over 50% in the last 5 years. It is Kennox’s fourth largest position. It supplies the leading clothes retailers with textiles. It is the market leader and a quality company. It has the capacity to deliver materials to retailers to the tightest schedules.

Texwinca’s environment and labour standards are good and need to be because of increased regulation. The management is conservative and competent. The company has minimal debt and net cash is 50% of market cap. It is cheap at 6x sustainable earnings. The dividend is 10%.


Be sure to check out the rest of the presentations from the London Value Investor Conference.