What is the stock?

Shriro (ASX: SHM). It is involved in the distribution of kitchen appliances and consumer products throughout Australia and New Zealand.

How long have you held the stock?

Since October 2017.

What do you like about it?

The domestic operations are mature, however the company is expanding into the US with positive early signs emerging. Shriro is priced by the market as a mature business, trading on only 9 times earnings and paying an 8% dividend plus franking, indicating to us that investors are essentially getting a free option on the expansion into the US and German BBQ markets.

How is it better than its competitors?

Shriro has developed relationships with a number of renowned chefs and identities’, such as Neil Perry and Heston Blumenthal, to help market their products and drive sales through retailers such as Harvey Norman, Bunnings and Winning Appliances.

Aside from these factors, the valuation is far more compelling compared with many of its peers such as Breville Group (BRG).

What do you like about its management?

The former CEO of 27 years and four other long serving colleagues still own 24% of the business, indicating the interests of management appear to be aligned with those of shareholders.

What is your target price?

The 12-month price target is $1.70 (currently $1.40).

At what point would you sell it?

The company has the exclusive licence to distribute and market brands including Casio, Omega, and Everdure, among others, for products ranging from stoves and ovens, to watches and calculators. If the business lost any of these key contracts it would be cause for re-evaluation.

How much has it added (subtracted) to your overall portfolio over the last 12 months?

The capital growth on the position for most clients is between 5-10%. In addition, the company recently paid a 7 cent per share half-yearly dividend.

Where do you see the value?

The Everdure BBQ brand is targeting a 1% market share in the US and German BBQ markets respectively, which has the potential to increase earnings significantly. The major opportunity for the Everdure range of barbecues sits in the US, where Shriro is linking up with Williams-Sonoma, which provides access to the lucrative US market through their 583 retail stores and strong e-commerce platform.

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