Stock Spotlight July
High-Quality Investment ideas from my investable universe at attractive levels
Free Idea of the Month: Robertet $RBT.PA
Robertet is a French family business with over 170 years of history creating flavors and fragrances. While only the 7th largest F&F company, Robertet dominates the natural ingredients niche, focusing on natural products instead of chemicals. With the rise in awareness and desire for sustainable and better products, Robertet is well-positioned to benefit from this secular tailwind. The company is highly durable with a very low terminal risk due to the nature of the market and the large barriers of entry:
products represent a small part of COGS for customers but are critical to the experience
high switching costs (who wants to change the smell of its perfume?) and long customer relationships
R&D portfolio and strict regulations (most end products are in direct contact with humans and thus are highly regulated)
Robertet is vertically integrated and owns many critical suppliers
Robertet is expected to grow in high-single digits due to overall F&F market growth, outperformance of the naturals niche, and some M&A. Furthermore, margin expansion and a cheap valuation (compared to peers and historical M&A takeover deals in the sector) make it compelling here. While Robertet probably won’t be the next ten-bagger, it is a high-quality, low-risk business with a long heritage.
You can read my complete analysis here.
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