Founder, BWS Financial Inc

Hamed Khorsand

Founder

Independent Stock Specific Research

BWS Financial Inc

BWS provides independent stock specific research focused on companies with distinct value that are going through a special situation where there is a tangible catalyst not priced in. The catalyst can be anything from new product, restructuring, M&A, management change, change in business strategy, etc. BWS’s focus is to understand the change and evaluate the potential return for investors.

BWS utilizes a self formed proprietary approach in discovering stocks by putting great emphasis on deep research. BWS does generate short recommendations following a similar criteria.

Equity Bottom-Up

<ul>
<li>GTX reported Q2 results missing our estimates as demand for turbochargers softened in quarter. The magnitude of the sales miss was amplified by deflationary cost pass throughs.  </li>
<li>GTX was successful in maneuvering its cost structure at the beginning 2024 resulting in gross margin exceeding our estimate and adjusted EBITDA declining by a significantly smaller amount than sales. </li>
<li>We were already towards the low end of GTX’s previous guidance range anticipating uncertainty. Our adjustments to 2024 and 2025 adjusted EBITDA estimates are minimal.</li>
</ul>


GTX reported Q2 results missing our estimates as demand for turbochargers softened in quarter. The magnitude of the sales miss was amplified by deflationary cost pass throughs.  
GTX was successful in maneuvering its cost structure at the beginning 2024 resulting in gross margin exceeding our estimate and adjusted EBITDA declining by a significantly smaller amount than sales. 
We were already towards the low end of GTX’s previous guidance range anticipating uncertainty. Our adjustments to 2024 and 2025 adjusted EBITDA estimates are minimal.


<ul>
<li>In the month since GTX reported first quarter results, there have been more industry news pointing towards automobile models benefiting GTX. </li>
<li>Automakers are indicating to using ICE and hybrid for longer than expected, which should contribute to GTX's ability to generate free cash flow beyond the next couple of years.</li>
<li>We continue to expect 2024 sales to skew to the second half of the year, but GTX should generate adequate free cash flow to repurchase shares and reduce debt. </li>
</ul>


In the month since GTX reported first quarter results, there have been more industry news pointing towards automobile models benefiting GTX. 
Automakers are indicating to using ICE and hybrid for longer than expected, which should contribute to GTX's ability to generate free cash flow beyond the next couple of years.
We continue to expect 2024 sales to skew to the second half of the year, but GTX should generate adequate free cash flow to repurchase shares and reduce debt. 


<ul>
<li>GTX reported first quarter results exhibiting the sales decline management had been warning could appear in the first half of the year</li>
<li>GTX managed to generate positive free cash flow to repurchase $109 million worth of the stock in the quarter. GTX has been routinely buying back stock with free cash flow.</li>
<li>GTX maintained its annual guidance on all metrics with management asserting much of the growth would come in the second half of the year</li>
</ul>


GTX reported first quarter results exhibiting the sales decline management had been warning could appear in the first half of the year
GTX managed to generate positive free cash flow to repurchase $109 million worth of the stock in the quarter. GTX has been routinely buying back stock with free cash flow.
GTX maintained its annual guidance on all metrics with management asserting much of the growth would come in the second half of the year


<ul>
<li>Garrett Motion (GTX) is putting greater emphasis on its zero emission products with investors even though the auto industry continues to see a slow uptake in electric vehicles</li>
<li>Automakers have put greater focus on hybrid vehicles, which should give GTX a boost in sales in coming quarters as demand for the Company’s products increases</li>
<li>Automakers have deviated from their initial electric vehicle launch calendars with the latest being Ford Motor (F) shifting a 2025 release date to 2027</li>
</ul>


Garrett Motion (GTX) is putting greater emphasis on its zero emission products with investors even though the auto industry continues to see a slow uptake in electric vehicles
Automakers have put greater focus on hybrid vehicles, which should give GTX a boost in sales in coming quarters as demand for the Company’s products increases
Automakers have deviated from their initial electric vehicle launch calendars with the latest being Ford Motor (F) shifting a 2025 release date to 2027


External reports (aggregated public sources), Value Investors Club

Value Investors Club (VIC)

External reports (aggregated public sources)

Value Investors Club

Key points<ul><li>GTX has a market capitalization of $1.8bn and an enterprise value of $3.3bn, with management forecasting $1.7-2.1bn in free cash flow over the next 5 years</li><li>Despite concerns of high FCF yields indicating value traps, the author believes GTX is undervalued and could potentially double in value over the next 3 years</li><li>The author highlights GTX's strengths and sees it as a good investment opportunity, emphasizing its potential for growth and value appreciation</li></ul>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Key pointsGTX has a market capitalization of $1.8bn and an enterprise value of $3.3bn, with management forecasting $1.7-2.1bn in free cash flow over the next 5 yearsDespite concerns of high FCF yields indicating value traps, the author believes GTX is undervalued and could potentially double in value over the next 3 yearsThe author highlights GTX's strengths and sees it as a good investment opportunity, emphasizing its potential for growth and value appreciationThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Garrett Motion Inc (GTX) - Monday, Nov 27, 2023

Switzerland

Garrett Motion Inc. operates as an automobile technology provider. The Company offers turbocharging, electric boosting, and automotive software solutions. Garrett Motion serves customers worldwide.

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Garrett Motion Inc (GTX) - Monday, Nov 27, 2023

GTX has a market capitalization of $1.8bn and an enterprise value of $3.3bn, with management forecasting $1.7-2.1bn in free cash flow over the next...

Value Investors Club (VIC)

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