CDK Global, Inc.
Thesis
CDK Global is undervalued due to market misperceptions, and its strong position in the automotive retail technology space provides a solid foundation for growth. The company has a robust cash flow and is well-positioned to capitalize on industry trends, making it a compelling long-term investment.
Did it work?
No price data was provided, but the thesis's core claim — that CDK Global was undervalued — was ultimately validated: Brookfield Business Partners took the company private in 2022 at $54.87 per share, a meaningful premium that capped a multi-year appreciation from its 2014 ADP spin-off. The company's leading position in automotive dealership software and its strong recurring cash flows played out largely as the thesis described, and the take-private itself served as the market's correction of the perceived mispricing. Because the exact return magnitude cannot be verified without actual price data, confidence remains low.