Seth Klarman’s Baupost Group increased his total holdings of Ituran Location & Control Ltd. to $55m , on January 15th according to local fillings in Israel. His original purchase of shares of the company occurred in 2007.
Klarman has made several recent foreign equity purchases in some European and Asian countries, which we will disclose on Monday.
Here is a compant profile of Ituran Location & Control Ltd, which also trades on the NASDAQ under ticker ITRN:
Electron Capital Partners' flagship Electron Global Fund returned 5.1% in the first quarter of 2021, outperforming its benchmark, the MSCI World Utilities Index by 5.2%. Q1 2021 hedge fund letters, conferences and more According to a copy of the fund's first-quarter letter to investors, the average net exposure during the quarter was 43.0%. At the Read More
Ituran is the leading company in its field, providing tracking and advanced protection services for vehicles and drivers. Ituran specializes in theft prevention and vehicle location, and the provision of information services, navigation and assistance while on the road. Ituran’s system is powered by a unique advanced technology developed originally to locate pilots in difficulty, later adapted for civilian use.
Over the years since its founding in 1994, Ituran has developed a strong reputation, and is in fact the leading company globally providing tracking, protection and communication services to vehicles and drivers. Ituran has more than 500,000 customers that it faithfully serves from its service bases in Israel, Argentina, Brazil and the United States. The company also licenses and supports its technology to service providers in China and South Korea. Ituran has been traded on the Nasdaq Stock Market since 2005.
In Israel, Ituran operates a 50-store network across the country to sell and install Ituran systems, protection systems and Ituran GPS systems.
Ituran also operates a customer service division that supports vehicles and drivers. This division operates 24 hours a day, and employs more than 200 service representatives who staff three call centers:
Operational control center:
Locates and follows a vehicle from the moment of receipt of a theft attempt until its return to its owner.
Customer service coordination:
Responds to customer queries at all times on all subjects.
Ituran BIG service coordination:
Provides a wide variety of road services, including personal navigation assistance, and information and comfort services.
Enforcement system – The operational strength of Ituran: Ituran’s enforcement system numbers more than 60 field personnel, demobilized from combat units. This experienced operating force, deployed across Israel, undertakes its complex activities with one aim: deterring and preventing vehicle thefts. The system is supported by vehicles that match the type of theft and field conditions, among them 4 x 4s and motorcycles.
The enforcement system provides an effective response to reports of attempted thefts, starting from Ituran’s national control center through hands-on activity in select areas: observation points, ambushes and broad intelligence services with the full cooperation of official security services. Ituran’s customers benefit from our 90 percent success rate in frustrating thefts. To date, Ituran has successfully prevented or resolved the theft of more than 16,150 vehicles with a total value of more than $1 billion.
Seth Klarman’s buys are hard to understand except when they are clear inflation hedges, such as gold companies. However the company is trading at 4.70 EV/EBITDA (the other metrics show the company to be price), and although Klarman is non-activist, with a market cap of ~$320m, he can easily buy this company outright.
Although company EPS has decreased, GP profits have steadily increased over the past five years as shown below:
The company does not appear to have a moat, and this seems like one of Klarman’s buys that no one understands but him. We will dig deeper and see if we come up with anything.
Stay tuned for more articles as well on Klarman’s other recent buys.