Buying this Cash Rich and Generative Monopoly at 25x FCF
Beaten a global incumbent to become the leader in the region. Wide moats, weak competition and industry consolidation promise margin expansion. Valuation undemanding.
Hi, I am Trung. I deep-dive into market leaders that passed my sleep-well checklist. I follow up on their performance with my Thesis Tracker updates, and when the right price comes, I buy them for the Sleep Well Portfolio, which I am building for my daughters to redeem in 2037. BUY and SELL (ideally never) decisions are long-term. Access all content here.
Hi everyone,
Today, I bought a sleep well business that:
Scores 13/20 points on my sleep well checklist.
Possesses all four moats - scale/cost, network effects, switching cost, and brand.
The multi-platform product is so strong peers ceded competing and became investors.
High probability of growing 15%+ growth for 10 years with low capex, higher earning growth, and available at >25x FCF with a net cash balance sheet (30% of market cap).
The market hasn’t appreciated the quality and expects free cash flow growth of 4% CAGR over the next decade, compared to an achievable 15% CAGR.
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