Navitas: Weakening dollar a tailwind for revenue and profit
We recently added Navitas Limited (ASX:NVT) to our portfolio as a result of the 43% retracement in its share price over the past 9 months. We had previously held NVT in the portfolio but locked in profits (somewhat prematurely as it turned out) as the valuations entered nose bleed territory. Given our familiarity with management, the sector and the business model, we were hence looking for an opportunity to re-enter the stock. We rate the business model highly and see a long term sustainable competitive advantage/moat. Management is best in breed. The company has a high cash conversion ratio and is potentially on the cusp of its next wave of growth after 4 long years evolving the offering for the Canadian and US markets. In the meantime, the weakening AUD will assist the Australian University Programs, which are still the largest drivers of revenue and profit.