This is my second biggest holding. The VIC write-up has finally become available to guest users. All you have to do is sign-up for an account with a valid email address. I highly recommend users to sign-up and read the VIC write-up.
I bought my initial holding in the low-70 cent price. In the less than 2 months that I have held the shares, the shares are up almost 70%. Although I’m looking at buying more shares. The company is still at very early stages of growth. I wouldn’t be surprised to see the stock over $2 by end of year. This company does almost no PR, no conference calls, and little investor relations. Even after posting 100% increase in revenue in Q2, the company didn’t put out any press release highlighting this growth. So the story on this company is not that followed by others. The CEO of this company has done a great job of focusing on execution and getting the right pieces in place to grow the company. I believe next year we will see a bigger push to get the word out about the company. So anyone buying at these prices won’t be disappointed.
6 responses to “XPEL”
Don’t you think the price of a paint protection install is kind of high? It’s around $750 according to the VIC writeup and some general internet searches. I appreciate that the film is only a tenth of that price, but to buy and use the film requires one to buy the install too. I (not a car enthusiast at all) would think about a film job if it was in the $200 range, but not at $750. That’s a material percentage of what the entire car is worth!
XPEL is definitely at the high end of PPF products. Although if you read user reviews and get feedback from installers, you will hear that XPEL has the best product in the market. So there is definitely a valid reason for them to price it at the higher end. Also the company’s product sales is growing at rapid pace, so the price is not something that is hurting the company. The installation of this product is actually not that expensive when you consider the costs car owners spend on their car. If you have any friends that are car enthusiastic, you can ask them what amount they have spend on their car. I have friends who have spent much more than PPF installation costs on tires, audio systems, or upgrading their cars. Obviously, if you are just buying a Kia or Honda to take you from point A to B and don’t care about the car’s appearance then you won’t spend on PPF. But if you enjoy the experience of driving, then the expense of PPF is not that high. Most high end car buyers won’t see PPF as a huge expense. The benefit more than pays for the expense. There are dealers of low-end cars, like Hyundia, that are selling new cars with PPF installed. So the price of PPF is not too high, given the benefit of the product.
Also, it seems like something that would get hurt in a bad economic environment.
There are very few companies that are economy insensitive. Even in a bad economic environment, the company should do well. The company’s revenue base is so small and the PPF penetration is miniscule, so even in a not-so-strong economic condition the company should still be able to grow. Obviously, if the US and International economy tanked then XPEL will struggle. But then so will all other companies. XPEL has a good balance sheet and it cash flow positive that the company won’t be in a distressed situation even if the economy tanked. I’m of the opinion that the US economy is in good condition and is going to grow at over 2% for the next few years.
Do you have insight on Xpel’s growth strategy in North America and internationally? This is where I’m having a little trouble understanding. Xpel is growing in North America by marketing and training. To train more installers and provide better service than competitors, they may buy property for local presence. I noticed PP&E is up a bit from the past year. But how are they growing internationally? It’s easy to sign up installers, but does Xpel have a way to provide good service to customers without investing capital overseas? I’d imagine they fly a rep overseas for training sessions.
For North America, Xpel trains installers at their San Antonio site. Xpel is growing via installers and distributors in North America. But they require all installers to get trained. So this creates a big bottleneck. For international, they sign up with distributors. Xpel still is requiring international installers to get trained. This is a big bottleneck. Xpel does have a trainer that is international. So this trainer can travel and do the training. But the headcount for trainers is where the problem is for Xpel. I’ve heard from people that have talked w/ the CEO that they are looking to increase the number of installers they train in 2014 by 40%. So that alone should give plenty of growth opportunity for Xpel. It is a good problem for a growing company to have, having enough headcount to grow. I think 2014 could be the banner year for this company, and more investors will hear about it.