FPA Queens Road Small Cap Value Fund on Teleflex Incorporated
Thesis
Teleflex owns a portfolio of catheters and surgical medical consumables. The fund invested after the company exited unrelated businesses, began deleveraging and brought in a new CEO from Medtronic. The managers believe they paid a low-double-digit multiple of normal earnings for a refocused medical device portfolio.
“we think we are paying a low double digit multiple of normal earnings for a strong and refocused medical device portfolio.”
Key risks
- Previous management left the company overlevered and unfocused
- The financial and operational turnaround may fail
- Near-term financial reporting has several moving parts