Adam Crocker, Chief Investment Officer, Logbook Investments, presented his investment thesis on Coats at European Investing Summit 2016. Here’s a snapshot:

COATS GROUP (London: COA) is the long-time dominant player in the global thread industry with an unrivaled global manufacturing and distribution footprint and long-term customer relationships. Coats thread is used in one in five garments sold, and the company generates three times the revenue of its next-largest peer. The business has “fallen through the cracks” due to reorganization of the former parent, pension uncertainty, and other technical factors. Trailing EV/EBIT of less than 7x seems like a modest multiple given the company’s stability, market leadership, and growth potential. Management is increasingly focused on industrial and specialty products, while selling the UK crafts business. Industrial is a steady ~2-3% growth business with improving margins.

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Adam CrockerAdam Crocker, CFA is Founder and Chief Investment Officer of Logbook Investments, a process-focused hedge fund founded in 2016 and seeded by his prior employer. Prior to Logbook, Adam was a co-manager at Metropolitan Capital Advisors, a long/short equity fund founded in 1992. Prior to joining Metropolitan, he was an analyst at Morgan Stanley Investment Management conducting research on behalf of growth and value investment teams. He began his professional career in Leveraged Finance investment banking at JPMorgan. Adam is a 2005 graduate of the Value Investing Program at Columbia Business School and has an undergraduate degree in Economics from Columbia University.