🔎 The Monthly Screener .

names to consider for an in-depth analysis.

One of the most time-consuming parts of my investment process is generating initial ideas. It requires going through hundreds of stocks just to find a few worthy candidates. First, I conduct a broad quantitative screening. Then, I narrow it down to a preliminary list, and only then does the deep analysis begin.

I have spent hours running these screeners to find a candidate for my next analysis. With this article, you can skip the hard work and find your next potential investment in just 10 minutes.

In this section, I will present 3 companies that passed the initial screening and may be worth further analysis. Additionally, as a bonus, I will share the full table below featuring a list of 20 companies that made the cut.

Disclaimer: This is a preliminary description for informational purposes, not a full analysis or investment recommendation. Do your own due diligence. Source: Financial metrics are sourced from the provided internal screener and TIKR.

1.Supreme PLC (SUP)

Overview: Supreme PLC is a leading UK-based distributor and manufacturer of high-volume consumer products. They have successfully transitioned from a traditional battery and lighting distributor into a powerhouse in the vaping and sports nutrition markets. Their vertical integration—manufacturing many of their own products—allows them to maintain superior margins compared to pure distributors.

Financials:

• Growth: Since 2018, Supreme PLC has experienced solid growth, with a CAGR of 17.23%.

• Profitability: This is the “crown jewel” of the list in terms of efficiency, boasting a 3-year average ROIC of 32%.

• Debt: The balance sheet is solid, with a net debt-to-EBITDA ratio of 0.5.

Valuation

• EV/EBIT: 6.7x

• P/E (LTM): 8.1x

• P/E (NTM): 8.0x

Opportunity or Value Trap? The main risk involves the regulatory landscape for vaping in the UK. However, it is worth noting that tobacco companies have faced constant regulatory threats and rumors for decades, yet they remain some of the most profitable and resilient cash-flow generators in the market. Supreme has proven to be highly adaptable, and at less than 7x EBIT, the market seems to be over-discounting a risk that historical precedents suggest can be managed.

2. Gamma Communications (GAMA)

Overview: Gamma is a major player in the European “Unified Communications as a Service” market. They provide cloud-based phone systems, data services, and mobile solutions specifically for the business market (B2B). They are a high-quality technology play with a large portion of recurring revenue, which provides great visibility into future cash flows.

Financials:

• Growth: From 2021 to 2024, revenues grew from 447.7 million to 579 million, implying a CAGR of approximately 8.9%, and analysts expect growth to reach 11.5% by 2025.

• Profitability: The average ROIC over the past three years has been high, at 23%.

• Debt: The net debt-to-EBITDA ratio is low, at 0.31.

Why is it so cheap?

Gamma currently trades at an attractive EV/EBIT of 8.7x and an NTM P/E of 9.3x. This valuation is primarily driven by two factors:

1. The UK Discount: The broader UK market continues to trade at a significant discount compared to global peers due to macro-economic and geopolitical noise, dragging down high-quality companies like Gamma.

2. AI Noise: There is a market narrative that Artificial Intelligence will commoditize the UCaaS sector. While AI is a transition, the fear of total disruption often creates an entry point for investors who recognize that Gamma’s established customer relationships and integrated software are stickier than the market assumes.

3. Inter Cars (CAR)

Overview: Inter Cars is the leader in Central and Eastern Europe (CEE) for the distribution of spare parts for passenger and commercial vehicles. Its primary competitive moat lies in its unmatched logistics network and dominant market share within the CEE region.

Industry Context and Personal Portfolio: I am optimistic about this sector. In fact, I currently hold Auto Partner in my portfolio. Notably, global giant LKQ (LKQ) is also on this month’s list, which highlights that the entire sector is currently trading at a significant discount in Europe.

Upcoming Deep-Dive: Given the compelling situation in the sector right now—and specifically regarding Auto Partner this month—my next full analysis will be a comprehensive update on both Auto Partner and the industry.

The Opportunity: The auto parts distribution sector has faced a tougher environment recently, marked by slower growth and margin compression compared to the explosive post-pandemic period. However, this is precisely where the opportunity lies for value investors. The market is pricing these companies as if the short-term margin pressure is permanent, ignoring the structural resilience of the automotive aftermarket.

Financials:

• Growth: The company has achieved a CAGR of approximately 16.1% over the past nine years. Analysts expect growth of 8.8% for this year and 10.1% for next year.

• Profitability: It maintains a solid and consistent 3-year average ROIC of 14%.

• Debt: The net debt-to-EBITDA ratio is 2.59, which is considered acceptable for such a stable business.

Valuation:

• EV/EBIT: 10.8x

• P/E (LTM): 11.7x

• P/E (NTM): 10.4x

As vehicle fleets across Europe age, the demand for parts remains non-discretionary. During a period of temporary margin noise, buying a regional leader like Inter Cars at ~10x NTM earnings seems like a winning strategy.

Bonus: The Full Screener List

If you enjoyed this breakdown and want to see the complete list of ideas, here is the full table containing 20 companies that passed the initial filter this month.