Buying This Boring Cash Generative Business with 2x Market Growth at 10yr Low Valuation
Market leader in a supply chain management niche, deep moats, limited competition, and accelerating acquisitions extending the 20yr record of growth, even in recession years.
Today, I bought a sleep well business that:
Scores 13/20 points on my sleep well checklist.
Possesses deep moats - network effects, scale/cost, switching cost, and brand.
This SaaS platform has multiple growth levers (organic, product, geography, M&A)
High probability of reaching 15% growth for 10 years with low capex, margin expansion opportunity, net cash balance sheet, and available at a 10-year low valuation.
The market hasn’t appreciated the quality and expects free cash flow growth of 9% CAGR over the next decade, compared to an achievable 15% CAGR.
I believe it can improve my portfolio, despite its performance at a 65% annualized return rate.
In case you missed it, recently, I shared the following:
20th Sleep Well Pick - Boring and Anti-fragile
Sleep Well Portfolio May Update - 64% Annualized Return
Transition of the Mercado Libre CEO.
Q1’25 results review: VAT, Kinsale, MIPS, Mercado Libre, Sea Limited, and Grab.
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Let’s examine what I bought today and how it fits the Sleep Well Portfolio.