IBM – INTERNATIONAL BUSINESS MACHINES CORPORATION (HQ: USA/Industry: IT Services)
IBM is focused on the intersection of business insight and technological innovation, and its operations and aims have been international in nature. The company seeks to create sustained value for clients by helping them leverage the power of hybrid cloud and artificial intelligence. With its hybrid cloud platform and AI technology supporting clients’ digital transformations and helps them reimagine critical workflows, at scale, and modernize applications to increase agility, drive innovation and create operational efficiencies. IBM’s offerings draw from leading capabilities in software, consulting services capability to deliver business outcomes, and deep incumbency in mission-critical infrastructure, all bolstered by one of the world’s leading research organizations.

For 10-years IBM has had very modest but steadily FCF/share growth totaling 13%, with only one declining year. While also buying back 22% of their shares, and continuously increased its dividend by nearly 100% during the period. IBM’s market price is trading at a reasonable valuation, however, this price does not account for a sufficient margin of safety.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=51143&owner=exclude

CBOE – CBOE GLOBAL MARKETS, INC. (HQ: USA/Industry: Capital Markets)
Cboe Global Markets is a leading provider of market infrastructure and tradable products, delivering cutting-edge trading, clearing and investment solutions to market participants around the world. The company is committed to operating a trusted, inclusive global marketplace, and to providing leading products, technology and data solutions that enable participants to define a sustainable financial future. Cboe provides trading solutions and products in multiple asset classes, including equities, and derivatives, across North America, Europe, and Asia Pacific.

Cboe’s has seen significant growth for the last 10-years, which has greatly increase over the previous two years. With ROE averaging more than 42%, however, the recent 5-years has seen this average drop to just over 15%. Similarly, ROIC averaged nearly 40% for the past 10-years, but just over 11% during the recent 5-years. Still, the recent ROE and ROIC averages are strong. To value the business at their current market price the company would need more than 12% per year growth for the next 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=1374310&owner=exclude

PATK – PATRICK INDUSTRIES, INC. (HQ: USA/Industry: Auto Components)
Patrick is a leading component solutions provider for the recreational vehicle, marine, manufactured housing and various industrial markets. This includes single and multi-family housing, hospitality, institutional and commercial markets. The company operates through a nationwide network that includes 174 manufacturing plants and 64 warehouse and distribution facilities located in 23 states, with a small presence in China and Canada.

Patrick has had significant growth over the last 10-years, greatly increasing revenue, EPS, BV and FCF/share by at least 700%. The company’s stock is trading below a margin of safety intrinsic value, as there had been a recent sell-off that begin in January and has not recovered.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=76605&owner=exclude

HUBG – HUB GROUP, INC. (HQ: USA/Industry: Air Freight & Logistics)
Hub Group is a leading supply chain solutions provider that offers comprehensive transportation and logistics management services focused on reliability, visibility and value for customers. With a mission to continuously elevate each customer’s business to drive long term success. A vision to build the industry’s premier supply chain solutions. The company’s service offerings include a full range of freight transportation and logistics services, some of which are provided by assets its own and operate, and some of which are provided by third parties. Hub Group transportation services include intermodal, truckload, less-than-truckload, flatbed, temperature-controlled, dedicated and regional trucking. With logistics services that include full outsource logistics solutions, transportation management services, freight consolidation, warehousing and fulfillment, final mile delivery, parcel and international services.

Hub Group has grown FCF/share by more than 160% over the last 10-years, with only one declining year. Along with a BV that continuously grew more than 170%, while maintaining an average ROE of 13% and ROIC of 11% during the period. To value the business at their current market price the company would need more than 20% per year growth for the next 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=940942&owner=exclude

AKR – ACADIA REALTY TRUST (HQ: USA/Industry: Equity Real Estate Investment Trusts (REITs))
Acadia Realty Trust is a fully integrated REIT focused on the ownership, acquisition, development and management of high-quality retail properties located primarily in high-barrier-to-entry, supply-constrained, densely populated metropolitan areas in the United States. The company currently owns or have an ownership interest in these properties through its Core Portfolio. While generating additional growth through funds in which it co-invests with high-quality institutional investors.

Acadia did not grow their FCF/share over the last 10-years, with the previous two years both being lower than 2012, along with three other years being lower as well during the period. This is due to an increasing share count that has nearly doubled, although BV was able to grow 42%. To value the business at their current market price the company would need more than 7% per year growth for the next 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=899629&owner=exclude