STEK
STEMTECH CORP
stockOTC

I think there might be a little more resilience in XPEL's business in the face of rising costs, so I am less concerned with the Geopolitical costs and Tariffs. I would hypothesize a majority of end buyers of the PPF and other coatings lean towards the higher end earners. That disposable income is less strained by higher rates of inflation (macro or industry specific). On the Expansion Plans, I think the San Antonio expansion makes perfect sense and is the less risky aspect of the $115m CapEx investment. It is the growth in China and the acquisitions there that are appear really good on their face, but is in the shadow of the Chinese government and China/USA relations. It's not a market XPEL can afford to ignore, but there's that little flutter in the gut around it for me. I also had thought they fully acquired the distribution business in China, but in the latest 10K realized they are a majority owner (I assume this has something to do with laws and regulations). I do like that they are funding this initiative through a combination of cash on hand, cash flow from operations and new financing associated with the real estate purchase. The real estate loans are collateralized against the investment, and we aren't taking on a large amount of long-term (unsecured) debt. Should lessen the impact to the balance sheet and shareholder equity in the short-term. The other big risk I see is simply the competitive market they are in. 3M, Eastman Chemical Company, Saint-Gobain, STEK, and others. While the integration stack XPEL has is a big competitive advantage, there are simply a lot of other choices out there in the world. I like that they have about $44m of the original $50m Share Buyback Program remaining. Given that program is over a year old, I think the measured approach is prudent. I'll look at re-valuation of the company after the Q2 Earnings Call. I'll admit I'm a little behind on my reading at the moment, so I'm not super confident assigning any growth assumptions. My gut reaction is they are fairly valued or close to fair value right this moment, but I also use a big discount rate. That's the return I'd like to make rather than WACC or any other formal discount rate.