Quick update on XPEL Technologies

XPEL just launched their new Ultimate Colour film at SEMA (Specialty Equipment Market Association) 2015. The film competes in the vinyl wrap market which is much larger than the PPF market currently. Here's more information on the film and its features.

I still talk to lots of investors who aren't convinced about XPEL's long-term growth profile but I'd argue the growth is even more certain now that they are in 2 new markets: vinyl and window tint. That's on top the of the massive runway left for international growth in PPF. Management is being extremely cautious with its international expansion plans as its looking to own its distribution, which has lead them to make short-term sacrifices for long-term gains such as the distributor reorganization in China. Management has seen time and again, namely in Canada and China, that selling via distributors isn't optimal for sustainable growth well into the future and the brand itself. Distributors in this market have a tendency to fight for the same accounts instead of trying to set up new accounts and as a result, they end up competing on price which hurts the value of the XPEL brand. What's more, they aren't trying to add many new dealer locations which negatively impacts the long-term growth.

This continues to be my highest conviction position and I still firmly believe it may the stock that makes me the most money.

The Q3 earnings will be out by the end of the month so I will have more to report on then.