ICO, Inc.
Thesis
ICO offers investors a significant margin of safety based on the value of its reserve base, which is estimated to be worth at least $6.50/share. The company is transitioning towards higher priced metallurgical coal and has committed to a substantial capital expenditure to enhance production capabilities, which should lead to increased EBITDA and a higher valuation in line with peers.
Did it work?
The stock pitch thesis has played out successfully, as the price has increased by 470.2% over 223 months, significantly exceeding the estimated value of $6.50/share. The transition towards higher priced metallurgical coal and the capital expenditure to enhance production capabilities likely contributed to this substantial increase in valuation and EBITDA. Given the long time frame and the strong performance, the thesis can be confidently deemed successful.
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