How do you think about working capital build ups in detail? Would it be alright, if the build up didn't consume the entire free cashflow?
Once working capital normalizes a bunch of companies will get +10% of their enterprise value as cash inflow. A recession might even increase the cash inflow while share prices should fall. This could be a big value driver with the right capital allocation policy.
I'm starting to actively look for such companies now. I guess chemical companies like Fuchs Petrolub and distribution companies like Ferguson fit description.
Good performance and great overview. Many thanks!
How do you think about working capital build ups in detail? Would it be alright, if the build up didn't consume the entire free cashflow?
Once working capital normalizes a bunch of companies will get +10% of their enterprise value as cash inflow. A recession might even increase the cash inflow while share prices should fall. This could be a big value driver with the right capital allocation policy.
I'm starting to actively look for such companies now. I guess chemical companies like Fuchs Petrolub and distribution companies like Ferguson fit description.