Last Thursday, Diploma’s management issued the Q3 update. Another quarter, another raise - that’s how one could easily sum it all up. Diploma’s now set to deliver over 42% EBITA growth for the whole current fiscal year - not a single quarter.
Since we’ve profiled Diploma in our first full write-up (June 2025), the stock’s up 55% including dividends, supported by its successful large acquisitions. For reference, following the Peerless transaction, shares have more than doubled in about 2.5 years.
As mentioned in the recently published report on Diploma, the distinctive factors behind our bullishness are its portfolio concentration. When things are working out greatly, having two growth canons that make up 45% of total EBITA power performance ahead. Peerless and Windy City Wire are going great guns, and frankly speaking, it’s only gotten better over the past several quarters. Their tremendous value proposition lends for continued outperformance during more turbulent macro times.
At the end of this recap, we’ll also shed light on some of the other industrial serial acquirers, including one that could make it to the portfolio after more due diligence. As with our recently purchased position, the lack of good (analyst) coverage, a smaller market cap (<500 million EUR), solid ROIICs and organic growth potential, and skin in the game… make it an interesting case study.
If the initial research ends up being worth sharing with our subscribers, we’ll go ahead with an in-depth report. Let’s see how it unfolds. We’re not in a rush for pitching several ideas we’ll lose track of - it’s got to be valuable/unique relative to what we already own/follow.
With that, let’s turn to Diploma’s splendid quarterly update.
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