In this week’s top pick, investment bank ABG Sundal Collier highlights the trading company, Bufab, showcasing its impressive track record of high returns and profitable growth since its inception in 1977. The company has consistently delivered operating profits every year, outpacing the market with an average revenue growth of 16% per year since its IPO in 2014 until 2024. Additionally, Bufab has maintained a steady average EBITA margin of 10% during this period.
Bufab’s success can also be attributed to its strategic acquisition history, having completed 16 acquisitions in the past decade. In November, the publicly traded company acquired the Italian company, Vital, further expanding its portfolio.
Looking ahead, ABG Sundal Collier anticipates organic sales growth for Bufab in the coming year, despite an expected organic sales decline in the fourth quarter. With a record-high gross margin in the third quarter, the investment bank sees opportunities for Bufab to continue expanding its margin in 2025.
ABG Sundal Collier has initiated a buy rating on Bufab’s stock with a target price of 500 SEK, representing a potential upside of over 20%.
Overall, Bufab’s strong financial performance, strategic acquisitions, and growth prospects position it as a compelling investment opportunity in the market. Investors can look forward to continued success and value creation from this innovative and dynamic company.