GreenWood Investors LLC on CTT - Correios de Portugal, S.A.

GreenWood believes CTT's low-cost and ultra-dense mail network has been successfully developed into an e-commerce flywheel that has rebuilt earnings beyond historical highs. The recovery in European bank valuations has reopened the strategic opportunity to partially or fully monetize Banco CTT, a catalyst that had previously been delayed by negative European interest rates. Redeploying bank proceeds into logistics assets or repurchasing shares at current valuation levels could be highly accretive, with the letter's scenario analysis showing 11% to 29% EPS accretion at the current 6.7x logistics EBIT valuation depending on the valuation achieved for the bank. CTT is already aggressively shrinking its share count, while GreenWood believes the e-commerce operation will become increasingly attractive as it moves through current regulatory volatility and introduces new services. The combination of a cheap valuation, improving logistics economics and potential bank monetization makes the company more attractive to GreenWood than at any previous point in the investment.