3 Strong European Companies You May Not Have Heard Of.


With focus on the larger US stocks we see in the news, many of the smaller European names go under the radar, yet there could be some good deals to be had here. We’re going to introduce you to 3 companies that have some good advantages going for them. Having said this, please check out their valuation. You should always be paying a reasonable valuation, even for a great company, if you want to succeed.


This company provides hardware and software for fabric cutting and design in the automobile, fashion, and furniture industries. Traditionally, fabric in these industries was cut by hand to make car seats, airbags, clothes, and furniture upholstery, as labour is relatively inexpensive compared to the machinery. However, as global wages continue to increase, it becomes more worthwhile for the companies to invest in the software and hardware that Lectra provides, both because it reduces the need to hire employees and also the amount of fabric these machines process per hour is dramatically higher. It is more profitable to have the machines overall rather than cut by hand.

Lectra’s business model has a number of positive points:

  • By far and away, it has the best technology on the market in terms of output of their machines, and this is why buyers see them as the premium brand in the market.
  • Much of their revenue is recurring, meaning that the customers have to pay a fee every year for some services/products. The services that require this are the provision of parts, training, maintenance of machines and software annual subscription fees.
  • Once a customer buys a Lectra machine, it lasts decades. Therefore, the recurring revenue tied to its use will keep coming in for this whole lifetime, like maintenance, parts and training.
  • They have niches where no one has the technology to compete, like cutters for airbags.
  • They sell their products directly to customers, unlike competitors who sell through agents, which makes them much more profitable as they avoid commissions. Their brand allows them to do this.
  • The CEO owns over 30M worth of stock last we checked. His salary is much smaller.


Bodycote is a heat treatment company, also providing several related specialized services. Heat treatment is a vital need for many metal products, as it makes the metal much stronger and more durable. Parts of an engine wouldn’t be able to survive without this treatment, for example. The industries that most make use of these services are auto, aero, industrial and oil&gas companies. These companies could either opt to do the heat treatment themselves or outsource it to a provider like Bodycote.

Bodycote’s business model has a number of positive points:

  • It is one of the largest players in a very fragmented market, meaning many of its competitors are mom&pop shops. They can beat these on price and quality, so customers tend to go for them.
  • Their service is vital, so they can afford to hike up prices since customers will still require the service no matter what.
  • They are one of the most international heat treatment providers. This is important if a customer plans to scale abroad, since they would rather do business with one heat treatment provider globally rather than a different one in each locality. This means that customers would rather choose Bodycote.
  • There are a lot of services related to heat treatment and Bodycote have the most extensive range of services. Competitors tend to have a fraction of the range. Therefore, customers know that going to Bodycote means that no matter what service they need in the future, they will find it at Bodycote.
  • It would take huge investments in facilities to try and compete with Bodycote, so it is unlikely that many potential competitors will try enter the market.


Segro is a real estate company in the logistics space. They make their money by renting out logistics-related properties and developing new properties to rent out. Logistics properties are ones related to the distribution of products, something heavily needed as consumers shift towards online retailing. An example of a customer might be Amazon, which would rent out a huge warehouse as a hub to store their goods and distribute them from there. This is a way you can get access to real estate without having to buy an actual house directly.

Segro’s business model has a number of positive points:

  • The majority of real estate it owns is classified as an urban asset, meaning a distribution center on the edge of town. It makes much more sense to develop undeveloped land into apartments in this sort of area, profit wise. For this reason, we have a situation where demand is increasing because of a shift to online sales yet supply is stagnant. This means Segro can keep pushing up rents.
  • The percentage of a customer’s costs that they spend on rent is very low. The majority of their costs are in transport. Therefore, they find it easy to pay more for rent, as long as it is in a good location (such as Segro’s urban assets), since a good location enables them to cut out costs due to longer commuting.
  • The real estate is valued according to similar past transaction prices of competitors, when they sold a piece of logistics real estate. This means the price of their real estate in the financial statements reflects past figures, meaning it might be worth more if valued again right now.
  • The duration of the contracts tend to be very long. This means that many of the tenants rented the property when the rent was cheaper and still pay that cheap rent. Rents have gone up a lot for this sort of real estate in recent years and should continue doing so. Therefore, as soon as the contract finishes for these cheap rents, they will renew at a more expensive rate. This means we should see growing rent for the foreseeable future.

If you’re interested in joining us on our journey, join our Facebook group: The Investment Hub — Malta

Any views or opinions presented in this article are personal and shouldn’t be taken/used as professional advice as we are not qualified financial advisors.
Any statistics mentioned have all been linked to their respective documents together with their ownership.
Lastly, we would like to note that this article has no tie to our professional jobs and was conducted in our free time.