Strattec Security Corp.
Thesis
Strattec Security Corp. is trading at less than 7x depressed LTM operating income and at 1.4x tangible book value, presenting an attractive buying opportunity. The company has a solid balance sheet with no debt, generates significant cash flow, and is implementing a turnaround strategy that could lead to a stock price of $58 in three years, yielding a 12% annual return.
Did it work?
The long thesis targeted $58 in three years (~12% annual return) based on a depressed-multiple valuation and turnaround catalysts. The stock delivered +78.7%, far exceeding the stated 12% annual trajectory for any elapsed period at or under the three-year horizon, and implying the $58 target was likely surpassed. The undervaluation and turnaround dynamics central to the thesis were decisively validated by the price appreciation.