Plural Investing's Chris Waller shares thesis on industrial roll-up compounder, TerraVest $TVK.TO

Chris Waller, Founder and CIO at Plural Investing, joins the podcast to discuss his thesis on TerraVest Industries Inc. (TSX: TVK), a manufacturer of home heating products, propane, anhydrous ammonia (“NH3”) and natural gas liquids (“NGL”) transport vehicles and storage vessels, energy processing equipment and fiberglass storage tanks.

For more information about Plural Invest, please visit: https://www.pluralinvesting.com/

Plural Investing write up on TerraVest $TVK.TO: https://static1.squarespace.com/static/57eff176e58c621a298bfa61/t/65c1736ea99cbe30a72634d1/1707176815309/Plural+Investing+Report+on+Terravest+%282024.01.24%29.pdf

Chapters:

[0:00] Introduction + Episode sponsor: Tegus

[1:54] What is TerraVest and why are they so interesting to Chris

[4:51] Why is TerraVest underfollowed?

[6:47] Why can their acquire at a discount and $TVK.TO's business model, overview, value proposition

[14:21] Propane tank industry / location moat

[19:44] How TerraVest pulls off the reduction in steel costs

[22:27] Why hasn't Private Equity stepped in to roll up the propane tank industry?

[25:48] How does TerraVest get labor cost down?

[29:35] Tanker and Boiler businesses / recent Highland Tanks acquisition

[35:13] Terminal value questions

[40:49] Management, insider ownership and incentives

[44:50] Valuation / Organic growth / How much accretive acquisitions to drive real performance here

[51:29] Cyclicality[54:27] Capital allocation

[57:40] $TVK.TO bear case

[1:00:46] Final thoughts

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