Lindsay Australia Ltd

The fund managers believe Lindsay Australia Ltd (LAU) represents an undervalued, defensive investment opportunity with meaningful growth prospects supported by favourable industry dynamics. In their opinion, the company is trading at a significant discount to both its historical valuation and that of its peers, despite having a solid earnings profile and positive growth outlook. The market’s current valuation, at under 8x forward earnings, appears overly conservative, especially given management’s guidance for FY24 EBITDA growth of 15–20% and further growth of over 10% expected in FY25. The fund managers view these forecasts as well-supported, citing recent developments in the Australian logistics sector—particularly the liquidation of a key competitor, Scott’s Refrigerated Logistics. In their opinion, Lindsay acted swiftly and strategically by acquiring $22.3 million in second-hand assets from the defunct business, positioning itself to capture additional market share. This move not only strengthens its leadership in the refrigerated transport segment but also enhances pricing power, which is particularly valuable in an inflationary environment. While Lindsay may not be viewed as a high-growth story, the fund managers see it as a resilient operator with upside potential and a compelling risk-reward profile at current valuation levels.