Top Sleep Well Businesses Beyond 2025
We rate the our businesses for 'sleep-wellness'.
Hi friends,
FY2023 and FY24 performances were near-perfect; thanks to strong market sentiment and fundamental performances, 15 of 16 buy and sell decisions were correct. But if history were a guide, 2025 could be challenging. Only twice in the last 100 years has the S&P500 returned 20% + for three consecutive years.
In preparing for a rough patch, I have been scouting for potential sleep-well businesses. However, I still feel some of our 17 picks can do well.
In this post, I rank our picks based on their ability to overcome adversity—‘sleep wellness.’ These winners have won in the past and are likely to continue winning in the future.
The four questions I try to answer are:
Does the business operate in a rational market with a long growth runway?
Does it have enduring competitive advantages against the competition?
Is the business anti-fragile in the down cycles and industry changes?
What are the reasonable expectations for the business against what the market is pricing?
The Sleep Well formula is as simple as answering the four questions above. If you want to go deeper, read my deep dives. I go deep to ensure these winners focus on building on their core competencies and markets where they have ownership advantages and distinct identities. When seeking organic growth, they should remain in adjacent markets, and when seeking inorganic growth, they should have a scalable formula.
But identifying winners is not enough. High quality comes at premium prices, and quality changes over time (disasters, recession, competitive actions, model iterations). So, the key is to do the work beforehand to know when they divert and to add or reduce your position.
That’s when our deep understanding and disciplined execution come into play. See our buy/sell decisions for yourself—15 out of 16 buy and sell decisions have been correct since October 2023.
Okay, next are how I rank my top sleep-well picks for 2025 and beyond: