TRG | The Bottom Line – 12/13

TRG this past week wrapped up 2024 this week with solid momentum: 1) Initiated coverage of a new stock idea (UHAL), 2) completed two highly successful non-deal road shows (NDRs) in Boston with CRH and TILE, and 3) wrapped up our final monthly TRG Fireside Chat series with GMS. An eventful week, the culmination of 2024 strategic efforts playing dividends. TRG over the years has “found” large but under the radar ideas, including being first movers for U.S. analyst coverage for FERG and CRH. UHAL represents another sizable ($13B market cap) and yet under the radar stock. In fact, TRG is the first sell-side firm to pick up coverage. Why now? TRG launched coverage of UHAL with a bullish viewpoint due to it being a critical land-based infrastructure stock with solid predictable growth and positive evolution in its mix (Storage an increasing % of total revenue). The general reality of North American life is that no one stays in the same place forever and that most of us have too much stuff. U-Haul provides the basic assets for people to use on a short-term (renting equipment to move) and longer-term (renting storage units). By providing both services and continually investing to improve their ability to serve more customers, the company has displayed durable revenue and cash flow growth for many decades. We believe this trend will continue and that there is a positive mix shift underway (Storage in particular). Despite this, the stock is not fully valued for reasons that are non-core and those reasons have already been evaporating. The critical change in UHAL is a shifting asset ix from depreciation (moving equipment) to appreciation (real estate). UHAL has always been exceptionally customer friendly. We believe more recently that there is a shift underway that is very shareholder friendly. This is more evolution than revolution, which provides a unique opportunity.