Tom @HyperGARP

$DLO $XPEL $MELI $NU $HALO $PNP.TO Oakville, Ontario Joined December 2013

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Tom @HyperGARP

a month ago

@realroseceline Did you have a mentor early in your journey as an investor? What were the most important lessons from that experience?

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Rose Celine Investments 🌹 @realroseceline

a year ago

I Looked at Your Ideas, This Was the Standout: Lots of ideas were suggested and I appreciate everyone who shared them. But the one that stood out most to me is $XPEL, thank you @HyperGARP for the idea! 🌹 Simple Business, Strong Economics: Meet $XPEL 🌹 $XPEL makes protective films and coatings for cars, like paint protection film, window tint, and ceramic coatings. They sell through installers and control the whole experience from product to service. It’s a niche but growing market, and $XPEL is the brand of choice. Customers care about trust and quality when protecting a $60,000 car, and $XPEL delivers both. The business model centers around a vertically integrated approach, $XPEL manufactures high quality products while tightly managing distribution through a certified installer network. This integration creates a barrier to entry for competitors. Installers are not just resellers, they are trained and certified to apply $XPEL products correctly, protecting brand reputation and creating a strong network effect. This installer base acts as a moat, reducing price competition and increasing customer loyalty. $XPEL products have high gross margins above 40%, driven by proprietary formulations and strong brand premium. The recurring nature of replacement and upgrades drives steady demand beyond initial installation. The capital light model means $XPEL doesn’t need heavy investment in fixed assets or inventory. They leverage a mix of direct sales and licensed installers, which allows them to scale with limited incremental capital. Strong free cash flow generation comes from consistent operating margins and working capital efficiency. The company’s cash conversion cycle is favorable, reflecting tight inventory controls and receivables. $XPEL reported revenue of $434m and net income of $47m last year, demonstrating solid profitability. Earnings per share growth has been steady, showing disciplined execution. Returns on capital illustrate how efficiently $XPEL reinvests in the business. Return on capital employed above 24% and return on equity 22% highlight management’s ability to generate strong profits with minimal capital reinvestment. Their clean balance sheet, with no debt and over $100m in cash, gives flexibility to invest in research and development, expand globally, or return capital to shareholders via buybacks. Insider ownership north of 14% aligns management with shareholders, and institutional ownership above 80% signals confidence from sophisticated investors. Share count stability minimizes dilution risk. $XPEL benefits from strong customer switching costs. Once a vehicle is protected, customers tend to stay loyal, creating a durable revenue base with high lifetime value. Ryan Pape has been CEO for over a decade and runs the company with long term discipline. He’s avoided big M&A, kept expenses in check, and focused on product and service quality. Unlike many small caps, $XPEL doesn’t rely on adjusted metrics, SBC games, or financial engineering. The earnings are real, the balance sheet is clean, and the capital allocation is rational. The main risks are tied to auto sales cycles and margin pressure from big buyers. If OEMs or large dealer networks start squeezing harder on pricing, that could negatively effect profitability. But the counter is that installers love $XPEL, customers ask for it by name, and it’s hard to replicate the trust and consistency they’ve built. It’s not just film, it’s the full stack around it. Product innovation, including improvements in self healing and scratch resistance, helps maintain pricing power and fend off commoditization. The market itself is underpenetrated, protective films currently cover a small fraction of total vehicles globally, leaving significant runway for growth as awareness and adoption rise. 1/2

Rose Celine Investments 🌹 @realroseceline

a year ago

Which business should I review next and why? Drop ideas below. If one stands out, I’ll dive in. Here’s what it must have: Real revenue growth Profits or positive free cash flow A strong balance sheet Great management Clear, understandable model Attractive unit economics

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Tom @HyperGARP

2 months ago

@leclerc_steve Another successful exit for $PNP.TO! TruBridge is Pinetree's largest position at around 30%. There will be plenty of cash for them to redeploy opportunistically.