AFR: Q&A with Matthew Booker
This article was written by Alex Gluyas for the Australian Financial Review. Read the original article.
Are there any IPOs that you’re in, or like the look of?
Our key tenet is to purchase IPOs where management retains a significant holding, or as we say, skin in the game. Vendors tend to have incredible foresight when timing their selling – if they sell a good chunk of their holding, it undoubtedly is caveat emptor.
Many of the companies being IPO’d are in hot sectors where fundamentals have succumbed to greed and euphoria. We are cautious about pursuing these kinds of companies, particularly if they are burning cash and have valuations based on revenue multiples or other non-profit metrics. We believe in the long term this is a sure-fire way to lose money, as stockmarkets are invariably cyclical.
One IPO that we bought a couple of years ago that we really liked is Mader Group (MAD). MAD is a highly profitable and growing company that specialises in fixed plant equipment and heavy vehicle maintenance.