Intrum: I Continue To See Long-Term Potential

2025-02-11 04:51:26 ET

Summary

• Intrum AB, despite its current financial struggles, presents a significant long-term upside potential, with a speculative "Buy" rating due to its capital-light model and restructuring efforts.
• The company's Chapter 11 plan has been approved, and recent 4Q24 results show improvements in collections, EBIT margin, and JV deals, indicating a positive trend.
• My conviction in Intrum's turnaround is strong, supported by high-profile hires and declining short interest, with a potential 100-500% return on investment over 3-4 years.
• Intrum's valuation below 30 SEK/share is attractive, and I expect the stock to reach 140-200 SEK, driven by earnings growth and multiple expansion.

Dear readers/followers,

Few calls I have made have been as widely discussed, or where I have received as much local (Swedish) commentary as for my work on Intrum AB ( OTCPK:ITJTQ ). One exception would be my work on Unum ( UNM ) and Lincoln National ( LNC ) as they were dropping. Now that these latter two stocks are either flying high or as with LNC, up over 23% in less than a month since I published my last article, the tune on those has changed.

Not so for Intrum - at least not yet.

Intrum is by far the longest-term reversal case that I have made and is by far the biggest and riskiest exposure I have in my entire portfolio. This is in part due to buying early, buying as it dropped, but also due to options assignments about a year ago when I didn't think it's likely for this to happen. All of this has left me with a massive position in the collections agency company Intrum AB, the biggest collections agency in the entire world....

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