Samsung Electronics Co., Ltd.
Thesis
Samsung Electronics was undervalued due to concerns about its smartphone market share loss and a slowdown in its DRAM semiconductor business. However, the consolidation in the DRAM market suggested that pricing would remain stable, allowing Samsung to maintain healthy margins even during downturns. The stock's valuation appeared attractive given the potential for significant upside with limited downside risk.
Did it work?
The long thesis on Samsung Electronics has clearly played out, as the stock has appreciated by 823.8% over the 151 months since the pitch. The concerns regarding market share loss and the DRAM business slowdown were addressed by the consolidation in the DRAM market, which helped stabilize pricing and margins. This significant return aligns well with the thesis of undervaluation and potential upside.
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