The Resilience Factor in Value Investing: Lessons from Chung Ju-Yung and Hyundai's Unconventional Growth

In the annals of industrial history, few figures embody the power of adversity-forged leadership as profoundly as Chung Ju-Yung. Born in 1915 to a poor Korean farmer, Chung built Hyundai into a global industrial titan by embracing a philosophy of relentless execution, frugality, and trust-driven culture. His mantra—“Do it until nothing more can be done”—was not just a motivational slogan but a strategic framework that transformed post-war rubble into infrastructure empires. Today, as macroeconomic headwinds test the mettle of industrials and construction firms, Chung's legacy offers a blueprint for identifying undervalued companies with the operational discipline and visionary grit to thrive.

The Chung Ju-Yung Playbook: Adversity as a Catalyst

Chung's rise from a self-taught laborer to a corporate titan was marked by calculated risks and a refusal to accept conventional limits. In the 1960s, he gambled $8 million (a staggering sum for a nascent South Korea) on 2,000 heavy machines, betting on infrastructure's role in national recovery. His approach was unorthodox: he prioritized human capital over perks, demanded 100% Korean-made parts for the Hyundai Pony, and expanded globally by dispatching executives to Southeast Asia despite early losses. These principles—bold execution, cost discipline, and long-term vision—are now rare in an era where short-termism often overshadows resilience.

Modern-Day "Bulldozers": Undervalued Industrial Giants

The industrials and construction sectors are littered with companies that mirror Chung's ethos but are overlooked by a market obsessed with tech darlings. Consider the following:

1. AECOM (ACM): The Infrastructure Architect

AECOM's 17.1% adjusted operating margin in Q3 2025 reflects its mastery of cost discipline, a hallmark of Chung's philosophy. With a net leverage ratio of 0.6x and $2.3 billion in buybacks since 2020, the firm balances frugality with reinvestment. Its P/E of 26.71—64% below its 10-year average—suggests undervaluation, especially as global infrastructure spending accelerates.

2. Delta Air Lines (DAL): Crisis as a Catalyst

Delta's 9.01 P/E and 9.11 EV/EBITDA highlight its undervaluation, but its true strength lies in its AI-driven fare pricing and $1.64 billion in free cash flow. Like Chung, Delta has turned adversity (the 2020 pandemic) into opportunity, modernizing its fleet and digital infrastructure while maintaining a conservative balance sheet.

3. Caterpillar (CAT): Frugal Innovation in Action

Caterpillar's pivot to hybrid and hydrogen-powered machinery mirrors Chung's 1960s gamble. Despite a 1% revenue dip in Q2 2025, its 17.3% operating margin and $3.1 billion in operating cash flow underscore its operational rigor. At a forward P/E of 22.35, the stock trades below its historical average, offering a margin of safety.

4. Waste Management (WM): Sustainability as a Strategic Edge

Waste Management's 28.9% EBITDA margin and $4.4 billion in EBIT highlight its profitability, but its acquisition of Stericycle and RNG expansion align with Chung's global vision. While its debt-to-equity ratio is high (247.2%), its 5.6x interest coverage ratio ensures stability.

The Investment Thesis: Why Resilience Matters

Chung's story teaches that long-term value creation is born from adversity, not ease. The companies above share three traits:
1. High EBITDA Margins: AECOM (17.1%), Caterpillar (17.3%), and Waste Management (28.9%) demonstrate disciplined cost management.
2. Low Leverage: AECOM's 0.6x leverage and Delta's 9.11 EV/EBITDA reflect conservative balance sheets.
3. Shareholder Returns with Reinvestment: AECOM's buybacks and Delta's free cash flow growth balance capital returns with growth.

These firms also align with megatrends like sustainability and AI, ensuring relevance in a shifting economy.

Conclusion: The Unconventional Path to Value

The market often underappreciates industrials and construction firms, dismissing them as “boring” compared to tech or consumer stocks. Yet, as Chung Ju-Yung's legacy shows, the most enduring value is created by leaders who thrive in adversity. AECOM, Delta, Caterpillar, and others offer a compelling case for investors seeking high-conviction opportunities. By prioritizing operational discipline, crisis resilience, and visionary leadership—principles forged in the fires of hardship—investors can uncover undervalued firms poised to redefine their industries in 2025 and beyond.