Arcadis: An engineering and design consultancy giant poised for a rerating
World leading expertises, accelerating megatrends, a focused strategy with improving profitability, and a ridiculous valuation
Welcome to the 27th investment case, 22nd resilience and 14th reshoring/sovereignty idea on Crack the Market (and the most comprehensive Arcadis investment case you will find online)! Join me as I dissect one of the leading engineering and design consulting company, at the cross section of many defining megatrends of our time, helping some of the largest companies and governments in the world manage a changing world, benefiting from significant investment plans into public infrastructure and large environmental investment budgets, with improving fundamentals and an under appreciated catchup on profitability ahead of them.
Twice a week, I will release deep dives into stocks and sectors that fit into the three themes that I see winning in this age of tariffs and deglobalization: resilience, sovereignty & reshoring, China. I will then deep dive into the opportunities in the AI data center value chain.
Take advantage of this once in a generation opportunity to build long term wealth by investing in great stocks that will deliver returns for your portfolio for years to come.
You can already read my first 26 deep dives, all of which I see as winners in this new world of tariffs and deglobalization:
ASML (reshoring & China idea): The most innovative company in the world will 2.5x its EPS by 2030.
LKQ (resilience idea): The most defensive business in the auto industry is a tariff winner and could become a compounder.
Atlas Copco (resilience, reshoring & China idea): The best industrials business in the world is on sale, extremely resilient and will benefit from US reshoring.
Badger Meter (resilience idea): The perfect business in the perfect end market, water meters are the definition of resilience.
Knorr Bremse (resilience idea): Who knew making brakes was this lucrative? Rerating with self help story and upside from German infra plan.
Flex (reshoring idea): The electronics manufacturing giant building Nvidia’s servers and enabling reshoring is becoming a better business.
Itron (resilience & reshoring idea): Riding the grid investment super cycle and enabling smart grids.
Roper (resilience idea): A resilient cashflow compounder in the software space with inflecting growth.
RELX (resilience idea): The company to own forever – one of the very best businesses on Earth.
CPKC (resilience & reshoring idea): The rail connecting Canada/US/Mexico and benefiting from reshoring.
Novo Nordisk (resilience idea): The most exciting pharma company in the world is misunderstood and its growth engine is ready to roar back to life.
Kurita (resilience, reshoring & China idea): Water services expert with improving margins and benefiting from reshoring of semiconductor production.
Halma (resilience idea): High quality compounder in safety, health and environmental technologies.
Quanta Services (resilience & reshoring idea): Countercyclical compounder riding a multi decade infrastructure buildout.
Infineon (China idea): Power semiconductor leader with strong structural drivers (AI power and China auto) amidst a cyclical recovery.
Hubbell (resilience & reshoring idea): Pure play on US electrification demand driven by AI and grid investment cycle.
Iberdrola (resilience & reshoring idea): Best integrated utility in the world with a stellar track record and solid growth driven by networks and renewables
Nvidia (AI & data center idea): The backbone of the AI world is unstoppable.
Veolia (resilience & reshoring idea): Resource management giant (water, waste, energy) due for a rerating.
TJX (resilience idea): The retail giant that keeps winning.
DSM-Firmenich (resilience idea): The diversified ingredient powerhouse benefiting from a transformational deal.
Zoetis (resilience idea): Leader in animal healthcare.
Prysmian (reshoring idea): Global cable leader entering a golden age.
Bentley Systems (resilience & reshoring idea): The software compounder bringing infrastructure into the AI age.
Givaudan (resilience idea): The highest quality and most resilient ingredient compounder has a compelling valuation.
First Solar (reshoring idea): The rising Sun in a new electricity supercycle.
After reading this article, you will understand why this company is so integral for corporates and public entities to find solutions to navigate a fast changing world and manage the lifecycle of most assets around us, what it does, why it is set to benefit from significant investment plans into infrastructure and environmental assets globally and how despite the uncertain backdrop and market skepticism it is executing on its strategic plan, leading to a valuation disconnect.
In this article I go through:
Arcadis’ business and how it provides full lifecycle solutions in the environmental, infrastructure, buildings and water sectors.
How the company is one of 5-6 global consulting firm able to help its private and state customers in achieving their goals.
Why the company is so well positioned to benefit from significant investment plans into public infrastructure and large environmental investment budgets.
How the last years have been transformational for Arcadis, with a focus on high growth expertises and improving margins, significantly improving the quality of the business.
Why its valuation is disconnected from its peers and what are the catalysts for rerating.
