Enfusion (NYSE:ENFN) — mrkt cap $1.2B; Price $9.37; EV/EBITDA 64
MORE RESEARCH NEEDED. Another company from the class of ’21. Stock price has been halved since IPO price (which, relatively speaking, is quite good for this cohort). The company was started by software developers who worked for hedge funds and recognized the widespread need for better front/mid/back-office solutions. They provide full integration with order management solutions. Enfusion appears to be the leader for smaller funds needing comprehensive solutions, and the runway still looks quite long here. They are aiming to eventually compete for larger asset managers, but this seems unlikely at the moment. We have more work to do to fully understand their product offering but upon initial research they appear well situated to continue gaining share with smaller fund managers.
Orthofix Medical (NAS:OFIX) — mrkt cap $605mm; Price $16.14; EV/EBITDA NA
PASS. OFIX is a global spine and orthopedics company. We looked at OFIX as it recently underwent a full-blown C suite change due to management violating multiple code of conducts. The new management team that has been bought in has extensive experience with leading companies to a successful exit (sale to another company). OFIX has an impressive portfolio of products however it has a bloated cost structure and a merger that it has to digest, courtesy of the previous management team. It has almost $1B in sales yet is still unprofitable- typically, past the $200mm mark is when medical device companies reach scale and profitability. We will wait to see further crystallization of strategy and cost cutting before considering a position.
Latham Group (NAS:SWIM) — mrkt cap $388mm; Price $3.36; EV/EBITDA 10
MORE RESEARCH NEEDED. SWIM is the largest manufacturer of fiberglass pools, holding close to 50% market share. Although their fiberglass pool sales are down year-over-year, this category is gaining share in the traditional pool market due to lower installation and maintenance costs. They have relationships with dealers all over the country, but we need to better understand the incentives for these dealers. The housing-related sector has seen a slump in demand, and this category is no exception. However, if trends continue, this could be an interesting long-term hold. More work needs to be done on SWIM’s logistical network and competitive advantages, particularly in understanding how the market share mix for fiberglass pool manufacturing will evolve in the future.