Stone Sentinel Capital on Marex Group Limited
Thesis
Stone Sentinel Capital continues to hold Marex after the company delivered record revenue and profitability. Trailing twelve-month return on equity reached 25%, supporting the manager's assessment of an unusually strong business. The manager believes Marex's competitive edge and management quality are not adequately reflected in a valuation of 14 times trailing earnings and 11 times forward earnings. The former private equity owners sold their stakes, but this did not change the manager's favorable assessment of the business. The investment case is that a highly profitable company with strong management remains undervalued despite its operating performance.
“Marex's extraordinary edge and management continue to be undervalued at 14x trailing PE and 11x forward PE.”
Key risks
- Marex's former private equity owners sold their stakes; the manager acknowledges this ownership change but says it did not diminish the view of the business.