Business Model of Sarine
Sarine is a technology-based company incorporated in 1988 and headquartered in Israel. It is a worldwide leader in the development and manufacturing of advanced evaluation, planning, cutting, polishing and grading systems for diamonds and gemstones production. Sarine used to be an investor’s darling but has since fallen from grace. It is an unloved stock these days with low liquidity. However, Heartland Boy thinks that there is potential for a turn-around soon. To rationalize Heartland Boy’s investment thesis, it is better to first understand the value chain of the diamond industry.Diagram 1: Value chain of the diamond industry
Source: World Diamond Council
De Beers has a monopoly over the mining and production of rough diamonds. Therefore, it has the ability to control and influence the prices of rough diamonds which are sold to manufacturers. These manufacturers, which mainly reside in India, will sort, plan and cut ...
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