Author Topic: KOV  (Read 7 times)

galumay

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KOV
« on: September 16, 2020, 10:42:20 AM »
16/9/20

Bought 2159 KOV at $4.63

KOV is just a solid, boring, cyclical industrial company that has a couple of divisions, it runs a hot dip galvanising business, and the Industrial Products segment includes the manufacture of electrical and cable support systems , steel fabrication and access systems for heavy earth moving equipment, railways and marine. It also includes the sale, hire and repair of high torque tools used in heavy industry and mineral processing. It includes the businesses trading under the EzyStrut, Power Step and Titan Technologies names. The Industrial products division is about 10x the revenue of the galvanising division.

KOV has been a public company for 50 years.

Its not a high growth business and it is cyclical given its reliance on infrastructure and mining projects, but its also a durable business which is unlikely to be disrupted or competed away given the barriers to entry to things like galvanising and the production of specialist niche tools. Its managed to sustain a consistent reasonably high ROIIC and FCF ratio despite the cyclical nature of the business. The biggest risk to the business is a severe economic downturn with a downturn in mining in Australia, this would cause profit to drop sharply and impact share price.The balance sheet is very clean though with no debt so it should be able to weather any storm.

I paid around my calculation of fair value for the business, but this is another case where its not often going to be cheap.

Galvanising plants in Australia -

Kingfield, Vic & NT private

APG - Nth Qld 12.5m Private

Hartway WA private

Valmont Australia's largest, Vic, Qld, NSW, Tas, Public USA listed.

Furphy Vic & NSW, 8.5m Private

Cable suppports -

Ezystrut, Korvest business, All states.

Burndy - NSW, QLD, WA, TAS  private

Kounis - WA, Vic private

Starstrut WA private

Atkore Unistrut - all over Australia, Aktore listed on NYSE.



« Last Edit: September 16, 2020, 05:28:55 PM by galumay »