Thanks for the presentation. After comparing the two competitors you mentioned, I personally (and I put them directly on my watch) would definitely opt for $STE. 😅 Decisions can be so different.
Why? CEO change, debt, legal risks, regular FCF charges from compensation payments due to the ethylene oxide stuff and the shareholder structure.
Nevertheless, I wish you every success with your investment.👌🏻
Why? CEO change, debt, legal risks, regular FCF charges from compensation payments due to the ethylene oxide stuff and the shareholder structure.
Nevertheless, I wish you every success with your investment.👌🏻
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@Get_Rich_or_Die_Tryin Thank you also for your honest assessment! It also took me a long time to make the decision, as the worries about the market did bring some dark clouds.
But for me, $SHC is the better ratio IF they continue to follow their path, of course. Get out of debt, maintain their dominance and avoid any more catastrophic legal disputes. I think a solid foundation has been laid here in recent years, mainly thanks to the work of the previous CEO.
The interesting thing about Sotera is that despite such high burdens, they are stubborn and the figures speak for themselves. Although the FCF margin is under pressure, it is still very good :)
Edit:
At $STE the EBITDA is unfortunately much worse, probably because the day-to-day business is much more cost-intensive. The FCF margin also lags behind $SHC. For me, the only arguments in favor of Steris were the larger market cap, a certain "security" and the slightly higher YoY growth. But honestly, with an almost 50% worse EBITDA margin, this could be smoked very quickly 😅
It's also interesting that last time you were leaning more towards specialized companies. But here you would prefer the play that has several construction sites? 😁
But yes, there are currently some points that could gnaw at Sotera, but that could also go in the other direction.
But for me, $SHC is the better ratio IF they continue to follow their path, of course. Get out of debt, maintain their dominance and avoid any more catastrophic legal disputes. I think a solid foundation has been laid here in recent years, mainly thanks to the work of the previous CEO.
The interesting thing about Sotera is that despite such high burdens, they are stubborn and the figures speak for themselves. Although the FCF margin is under pressure, it is still very good :)
Edit:
At $STE the EBITDA is unfortunately much worse, probably because the day-to-day business is much more cost-intensive. The FCF margin also lags behind $SHC. For me, the only arguments in favor of Steris were the larger market cap, a certain "security" and the slightly higher YoY growth. But honestly, with an almost 50% worse EBITDA margin, this could be smoked very quickly 😅
It's also interesting that last time you were leaning more towards specialized companies. But here you would prefer the play that has several construction sites? 😁
But yes, there are currently some points that could gnaw at Sotera, but that could also go in the other direction.
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•@Stocktective It always depends on whether I prefer the Pure Play or the broader Generalist. In a direct comparison here, I would lean more towards the "more solid" generalist due to the disruptive factors, which I still don't think have been eliminated and are already serious (since I didn't know either of them beforehand, both had the same starting conditions for me).
The most important thing for me, however, is: what will stick at the end? In comparison, Sotera's FCF margin is around 5bp higher, that's right (not counting the EBIT margin, which is of course top notch, but that doesn't end up as cash on a one-to-one basis). However, if the FCF is regularly burdened at irregular intervals by compensation payments (which inevitably squeezes the margin), this indicates to me as an investor that real cash flows cannot be reliably predicted and I simply lack the imagination for real, long-term compounder potential.
And I really don't like that.🤷🏼♂️😅
The most important thing for me, however, is: what will stick at the end? In comparison, Sotera's FCF margin is around 5bp higher, that's right (not counting the EBIT margin, which is of course top notch, but that doesn't end up as cash on a one-to-one basis). However, if the FCF is regularly burdened at irregular intervals by compensation payments (which inevitably squeezes the margin), this indicates to me as an investor that real cash flows cannot be reliably predicted and I simply lack the imagination for real, long-term compounder potential.
And I really don't like that.🤷🏼♂️😅
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•@Get_Rich_or_Die_Tryin I can well understand that, yes, the litigation risks hang like a sword of Damocles over $SHC and that will remain the case for some time until it disappears, but I think it will. Of course, this will also have an impact on the share price, which won't really get going for the time being.
However, the course has been set well and the management is acting very conservatively, allocating capital sensibly and working in a shareholder-friendly manner. After the PE IPO, of course, things still have to settle down, but the last massive second offerings have been sold.
Let's see what happens in the future, I'm curious :)
However, the course has been set well and the management is acting very conservatively, allocating capital sensibly and working in a shareholder-friendly manner. After the PE IPO, of course, things still have to settle down, but the last massive second offerings have been sold.
Let's see what happens in the future, I'm curious :)
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