The Naspers Ecosystem, Part 1: Classifieds

The general narrative around Naspers slices the company into two pieces: its Tencent stake and “other businesses”. Through either prodigious foresight or sheer luck, Naspers go into Tencent on the ground floor, investing ~$30m for 35% of the company in its infancy. Since then, Naspers has sold a portion of this investment, but its current …

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Interview with Carriage Services CFO/Head of IR

This is the first of what will hopefully be many interviews that I regularly conduct to supplement my research. Writing is a big part of my investment process and I’ve found that writing these memos has allowed me to take away much more than simply having a one-hour phone conversation. The obvious next step was …

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Issues Analyzing Companies From the Outside [XPO Logistics]

Think of this post as an extension of the fragmented XPO discussion we’ve been having across various posts. I’m not going to provide a background on the industry or anything since I have covered that in previous posts. To get you up to speed, find Part 1 of my post on Trucking here and Part …

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Mid-Year Review [July 2020]

I hesitated before deciding to write mid-year review of some of the companies I talked about because I do not want this blog to be seen as a place to receive stock tips or buy/sell recommendations. Rather, I consider this blog as a real-time journey into my research process. Sometimes I encounter a really great …

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On Aggregators, Marketplaces and Value-Added Pricing [CARG, CARS, TRUE, etc.]

I’ve known about Craigslist for a while, but it was only recently when I started musing about just how powerful of a business it is. To give you some background, Craigslist was founded in 1995 by Craig Newmark and the site remains relatively unchanged from its founding. For those who are unfamiliar, it is described …

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On CROs, Script Data, Merger-of-Equals and Statistics [IQVIA, ICON, PRAH, LH]

Behind every pill you take is a buzzing ecosystem of manufacturers, government regulators, R&D and marketing departments and data aggregators working in concert to bring a drug from formulation to regular use. As an investor, I’ve always had a behavioral bias AGAINST the biopharma industry, but as I’m looking under the hood, I’m seeing a …

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Northern Technologies Corporation: A Play on Plastic?

I recently came across a 1984 letter by John Templeton in which he gave a prescription to investors at a time when the market was seemingly very expensive. (Courtesy of MOI Global on LinkedIn) What really stood out to me was this. “A greater ultimate reward may be achieved by searching now for those stocks …

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HEICO: The Berkshire of Aerospace

In my last article, I talked about a false dichotomy between TDG and HEI. If anyone is pitching this dichotomy when discussing investing in aerospace, stop getting investment advice from them. They don’t know what they’re talking about. TDG and HEI barely compete. There’s about a 2% overlap between their products. Their management teams are …

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The Razor-Razorblade Model: TransDigm Group

Lots of people are asking nowadays: do I invest in TDG or HEI? I think that’s the wrong question to ask. Anyone who poses the question like this probably doesn’t know much about the aerospace industry, and you’re better off not asking them for investing advice in the future. So, what’s the difference? TDG is …

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The Razor-Razorblade Model: Rolls Royce

Introduction The Razor-Razorblade Model refers to the sale of long-lived products (razors) and subsequently the maintenance and replacement of parts (razorblades). We see this everywhere from pools to airplane engines and many very successful companies employ a form of this business model. It’s a good business model because (1) the company has high visibility of …

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