Releasing Tomorrow: A <$10B 'Circle Economy Leader' With Clear Growth Economics Trading Reasonably
Multiple times the size of the next competitor in a $10B+ market, products with compelling unit economics over a 30-yr asset life, resilient business model, management proactive on value creation.
Tomorrow, 4th Nov 2023, Sleep Well Investments will deep dive (10K+ words) into a <$10B market leader in a fragmented and localized market that has been around for eight decades.
Despite disclosing their M&A platform and unit economics secrets, the second-place rival is 5x+ smaller, and adjacent peers have yet to take meaningful market share.
As we enter a challenging period, I find it comforting in the business’s anti-fragile attributes. It has a counter-cyclical capex profile and recurring revenue from the inherent reusable product nature with an asset life of up to 30 years. Yes, it is ESG-compliant! The business should also be on better footing to acquire weaker regional players and accelerate buybacks (they bought back nearly 10% last year).
The stock price is undervalued at the current range, even assuming a recession as bad as 2008.
As usual, after the deep dive, you will receive a Tracking System to help you follow the business closely. I intend to add the stock to the Sleep Well Portfolio (redemption 2037) next week with a half position, saving for the other part in a few quarters.
Sleep Well Investments tracks market leaders and invests when the condition presents a high margin of safety. Subscribe for more
You can find my past publications on other market leaders below:
CrowdStrike - Cloud Security Leader +27% CAGR since IPO
The VAT Group - Vacuum valve monopoly +32% CAGR
Shimano - Bike component monopoly +12% CAGR
MIPS - Helmet safety monopoly +45% CAGR
Thor Industries - RV monopoly +14% CAGR
Medical Device Monopoly +17% CAGR
NVR - Top US East Coast Hombuilder +30% CAGR
What is Sleep Well Investments?
Sleep Well Investments helps you understand the top businesses in obscured markets.
Identifying a great business is complex. Monitoring to own it for decades is even more difficult. And you are busy.
I am here to provide in-depth analyses of market leaders (ESG compliant) that have survived multiple market cycles and have the ingredients to remain leaders. I also provide thesis-tracking updates to help you monitor their performance.
If you’re an investor, hedge fund analyst, or entrepreneur, I will equip you with the knowledge and understanding of these top businesses and industries to capitalize on the future.
I was born in Vietnam and moved to the U.K. in 2001 when I was 15. My background is in management and finance.
I am an ex-PwC and KPMG accountant, a Ph.D. doctorate in Innovation Management, and a passionate learner of time-tested businesses. I used to host a Value Investing group in London (pre-covid) and managed external capital for family and friends. Since 2022, I have been writing on Sleep Well Investments full-time; it’s my second baby, besides my beautiful 4-year-old daughter.
I had to break down complex things for C-level executives with little time and a low attention span. That’s why I strive for simplicity and structure in my deep dives and thesis tracker updates.
You can read more about Sleep Well Investment here.
Don’t be a stranger!
My investment philosophy
Being optimistic and patient are superpowers.
I’m a business-focused investor with a long time horizon.
I invest in a business to own it. I rarely ever sell. Instead, I stop adding to positions that turn against me.
I hold about 20 stocks at a time. I start with small positions and let the portfolio concentrate over time without rebalancing. I invest when the price is right and add fresh savings to the stock market across large caps and individual stocks.
My investment moto is:
Study market leaders.
Track them thoroughly.
Own them for decades.
What makes a business leader in their market?
I hope we can figure it out as we break down their business and track their performance together!