Wirecard (XTER:WDI) is a vertically integrated online payment services provider, primarily operating in Europe and South Asia. The majority of the activities are online, which allows for attractive growth opportunities as credit card penetration increases and as e-commerce displaces in-store purchases. As one of the leading players in the industry, Wirecard benefits from significant scale and network effects that allow it to provide an increasingly superior value proposition to its clients (i.e., a virtuous cycle effect). We find Wirecard’s management team has added tremendous value for shareholders via its strategic and operational prowess, and the large insider ownership (CEO owns 7%) creates significant alignment with minority shareholders. Wirecard trades at a meaningful discount to both our fundamentally driven intrinsic value as well as recent private market transactions, and we took advantage of the short-term price weakness to initiate a position.
From the Oakmark Global Fund first-quarter 2017 shareholder letter.
