20th Sleep Well Pick - Boring, Anti-fragile, Near 10 year low Valuation
This company has grown revenue for ~100 consecutive quarters, with a 40% free cash flow CAGR in the past 10 years. It is positioned to grow free cash flow by 20% long-term.
I love that the 20th Sleep Well Pick went from the brink of bankruptcy in 2001 to achieving almost 100 consecutive quarters of YoY revenue growth. It didn’t even report a decline in the 2008 recession. The previous CEO, who led the company for 23 years, reflected that ‘every single best practice we achieved was from failures.’ To me, that’s the culture of a truly resilient and countercyclical business destined to succeed.
Since its IPO 15 years ago, revenue has grown by 50x, and free cash flow by 100x, which has never been negative.
An investment of $10,000 would have turned into $221,000, or 22x your money, a 23% CAGR over 15 years.
Best yet, today's valuation is near the 10-year low levels, while the business adds another growth lever.
Let’s discuss the 20th Sleep Well pick and see how it fits in our Sleep Well Portfolio.
Company overview and thesis
Why is it a sleep-well business
Downside protections
Upside - 4 levers of growth
Competition and other risks
Simple valuation
Sleep Well Scorecard
How does it fit in the Sleep Well Portfolio
Sleep Well's track record since sharing the portfolio in October 2023.
23 of 24 trades are green
No losers in the portfolio, average return 64%, annualized.
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Suitable for long-term investors. Deep research and follow-up.
No trading, no quick pitches, no ‘10x your money promises’.
1. Company overview and thesis
The 20th pick is a cloud-based supply chain management platform. Ninety percent of revenue comes from the US, and customers include Amazon, Costco, and Walmart.