Cliff Note #124 - Another Sleepy Value-Trap Unwind Set-Up

P/E of 5x Should materially expand as operating leverage kicks in; Percolating data center InfoArb theme

Multibagger Themes: Multiple Capacity Expansions - Operating Leverage - Value Trap Re-Rate - Data Center Beneficiary - Increased Hiring

A family-owned injection molding company across industries like electronics, healthcare, and industrial products. The company has expanded capacity through facility upgrades which has lifted revenue and is starting to lead to operating leverage. We like that the company combines an experienced workforce with a conservative culture and shares outstanding have remained constant since going public. Recent employee growth and active job postings further suggest ongoing expansion. We are also intrigued that one of its main customers is experiencing positive momentum from data center growth tailwinds. With an attractive run-rate P/E of 5.7 and P/B of 0.76x, the company appears extremely undervalued, though risks include a management buyout, customer concentration, stock illiquidity, and limited disclosure on performance. The valuation could re-rate higher if the capacity expansions begin yielding additional revenue growth and if operating leverage starts to really kick in, which may be starting to occur.

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