Company Reports
Find Companies
Recent Updates
Worldline Earnings: Revenue Progression Decent; Investors May Have To Be Patient
Worldline reported first-quarter revenue of EUR 1,097 million, up 2.5% on an organic basis versus the same period a year prior and well ahead of flat consensus expectations collected by the group prior to the release. Moreover, merchant terminations in the merchant services business have been completed, allowing Worldline to reset its focus on stronger organic growth figures in its largest segment toward the end of the year. Merchant services expanded 3.9%, or 6.5% if we exclude merchant terminations, highlighting the potential for greater top-line results once the initial merchant termination impact during the third quarter last year is in the base. We maintain our EUR 28.90 per share fair value estimate and narrow economic moat rating.
All Reports
Company Report
Management Lowers Sales Guidance for 2024 As Ag Demand Continues to Normalize
Agco is a pure-play agricultural equipment company that has traditionally been focused on tractors. We believe it will continue to be a top-three player in the ag industry. The company has been successful in emerging markets, where customers typically look for reasonably priced equipment. In developed markets, it faces competition from industry leaders Deere and CNH, which provide customers high-quality and strong-performing products, making it difficult for Agco to gain ground. The company’s peers help customers reduce the total cost of ownership through improved fuel efficiency, limited machine downtime, and consistent parts availability.
Company Report
Tesla’s Strategic Focus Shifts From Growth to Development of Affordable Vehicle and Cost Reductions
Tesla is one of the largest battery electric vehicle automakers in the world. In less than a decade, the company went from a startup to a globally recognized luxury automaker with its Model S and Model X vehicles. The company competes in the entry-level luxury car and midsize crossover sport utility vehicle markets with its Model 3 and Model Y vehicles. Tesla also sells a light truck—the Cybertruck, and a semi truck. The company plans to launch an affordable SUV and luxury sports car in the future.
Company Report
Magna Seeks Margin Expansion While Keeping a Strong Balance Sheet and Seeking Dividend Growth
Magna International is one of the largest, most diversified auto parts suppliers in the world. However, large and diversified is no guarantee of economic profits for investors. While breadth in product and services can be advantageous with regard to cross-selling--commercial activities that bolster content per vehicle and market penetration--we see only limited evidence that Magna's diversified strategy has benefited investors in the form of higher margins and ROIC.
Company Report
Landstar's Truck Brokerage Backdrop Still Bouncing Along the Bottom, but Execution Steady
Landstar System ranks among the largest third-party logistics providers in the highly fragmented $120 billion-plus domestic asset-light truck brokerage space. Since Landstar doesn't own tractors, only a fleet of trailers, it has much lower operating leverage than pure asset-based truckload carriers. Thus, it enjoys a variable cost structure with relatively low capital intensity that generates solid capital returns—34% on average over the past seven years. Moreover, as one of the largest providers, Landstar has built a vast network of shippers, asset-based truckload carriers, and independent sales agents that support a wide economic moat, in our view.
Company Report
Essential's Response to PFAS Regulations Will Take Significant Investment
For more than 50 years, Essential Utilities—formerly Aqua America—was one of the few pure-play water utilities in the United States. But its $4.3 billion acquisition of Peoples Natural Gas in March 2020 made the company nearly 50% larger and diversified its earnings mix.
Company Report
Malibu Ratchets Back Production in Response to Dealer and Buyer Caution to Protect Brand
Malibu is a long-established name in performance sport boats, venturing into the sterndrive and saltwater segments via acquisitions in recent years. We believe that its brand, innovative products, and consistent pricing power contribute to a brand intangible asset, which underpins our narrow moat rating. Supporting its market leadership, it’s demonstrated an ability to meet evolving customer preferences, bringing new products to market quickly, with new models and numerous new features rolled out annually across all of its segments. And it has capitalized on its brand strength by expanding into adjacent categories, such as trailers and accessories, which we expect to continue. However, Malibu hasn’t rested only on innovation to grow profits, also curating savings through streamlined production and rising efficiencies through vertical integration. As evidence, efforts at Pursuit’s new plant had increased the EBT margin at the brand to 13% in 2023 (from 9% in 2020), even with the acquisition of Maverick. With continuous improvements to the manufacturing process, Malibu should be able to limit expense growth over time.
Company Report
We Think Reducing Fixed-Price Exposure Will Help Derisk Fluor's Backlog
Fluor is one of the largest global providers of engineering, procurement, construction, fabrication, operations, and maintenance services. The firm serves a wide range of end markets including oil and gas, chemicals, mining, and transportation. Fluor operates three core segments: energy solutions, urban solutions, and mission solutions.
Company Report
GoDaddy Drives Greater Product Attachment While Skewing to Higher-Value Customers
We think GoDaddy’s position as the world’s leading domain registrar creates a unique opportunity to capture demand from newly formed businesses and upsell complementary products beyond domain registration. We expect the one-stop-shop model will appeal to micro- and small businesses looking to establish and manage a ubiquitous online identity with integrated commerce solutions. The initial domain registration process is typically a customer's first interaction with GoDaddy, and acts as an onramp for additional products. For example, an entrepreneur seeking an online presence for their idea may approach GoDaddy for a domain registration initially, and as a natural extension purchase a subscription to a domain linked email account, website building tools and commerce solutions.
Company Report
Low-Cost Production From High-Quality Assets Positions EOG Favorably
EOG's capital allocation strategy sits somewhat alone relative to other US exploration and production, or E&P, players. While the consolidation bug has bitten its peers and the integrated majors, EOG principally focuses on organic exploration efforts. And, like other US E&P peers, EOG has embraced a capital allocation policy that emphasizes returning cash to shareholders, yet retains a willingness to invest in modest production growth. Finally, in an industry that overextended itself during the shale revolution, EOG pivoted sooner than most to becoming a low-cost provider. Combined with an enviable asset mix, including a leading position in the Delaware Basin, these factors position EOG as a premier shale player with industry-leading returns on capital.
Company Report
Ingersoll Rand Continues to Drive Margin Expansion Through Synergies and Productivity Initiatives
In February 2020, Gardner Denver acquired the former Ingersoll Rand’s industrial business in a transformative reverse Morris trust transaction. The combined entity took on the Ingersoll Rand name and stock ticker.
Company Report
Tandem Diabetes Poised for Return to Growth Thanks to Mobi
Though Tandem Diabetes has made a splash in the insulin pump market as the latest entrant in the US, the firm is still endeavoring to establish itself as a major competitor. On this rather lengthy path between the initial 2012 launch of its original t:slim pump and consistent positive earnings, Tandem still has a few years to go, from our perspective.
Company Report
Adient Is A Leader in Seating
Adient is the automotive seating business of Johnson Controls that was spun off to JCI shareholders in a taxable transaction Oct. 31, 2016. Adient leads the seating market with about 33% share globally. It is common for a spinoff to be ignored or misunderstood, but we think ignoring Adient just because it is an auto-parts supplier is shortsighted. Seating is one of the stickiest parts of the supplier sector since it is very difficult to take out an incumbent on a vehicle program, and automakers need suppliers that can consistently deliver high-quality seats in a just-in-time system all over the world. Automakers have global platforms and are willing to pay for the right supplier rather than the supplier simply with the lowest price. We think the seating sector can benefit from autonomous and electric vehicles rather than be hurt by the change because AVs and EVs open up new seating configurations and possibly more electronics content in seats.
Company Report
Bio-Rad's Expanding Profit Margins and Stake in Sartorius Drive Long-Term Value
Bio-Rad develops products and solutions for the life sciences research and clinical diagnostic markets and enjoys niche market leadership in diagnostic quality controls, antigens, and digital polymerase chain reaction, or dPCR, molecular testing. Bio-Rad’s business relies on the razor-and-blade model typically seen in the diagnostic market, and consumable reagents account for about 70% of total sales, with these reagents often sold at a higher margin than their associated equipment and instruments.
Company Report
Financial Metrics on the Upswing at Norwegian Thanks to Solid Pricing and Cost Management
With pandemic-related changes in consumer behavior around travel in the rearview mirror, economic performance of Norwegian Cruise Line Holdings is on a path to the generation of excess economic rents. As consumers returned to cruising after the 15-month sailing halt that ended in July 2021, they regained their appetite for travel, bolstered by the value proposition the holiday provides, an interest that continues to persist. With ships fully deployed at historical occupancy levels, pricing surpassed prepandemic levels in 2023 and continues to show momentum in 2024. While Norwegian could intermittently see pricing competition in periods of macroeconomic distress, we believe its freestyle offering and attractive itineraries will keep passengers engaged with the brand. On the cost side, while higher oil prices and unfavorable foreign exchange could elevate costs at times, we expect management will focus on extracting further efficiencies as the business continues to scale. Over time, we expect both pricing and costs to normalize at low-single-digit rates.
Company Report
MasTec Is Positioned to Benefit From Rising Spending in Communications and Clean Energy
MasTec is a leading infrastructure construction company for customers in the telecom, renewable energy, utility, and oil and gas pipeline industries. The company primarily operates in North America.
Company Report
Yellow Share Gains Still Providing a Nice Boost for XPO, and Productivity Solid
XPO got its start in mid-2011, when entrepreneur Brad Jacobs led an equity investment in expedited freight brokerage firm Express-1 Expedited Solutions. Jacobs launched an acquisition strategy targeting the asset-light US highway brokerage industry. By mid-2013, XPO's deal focus evolved beyond truck brokerage into heavy-goods last-mile delivery, intermodal, and global contract logistics. Then in 2015, XPO jumped into the asset-based trucking landscape with the acquisition of less-than-truckload carrier Con-way.
Company Report
McDonald's Isn't Immune to Industry Challenges but Should Capture Market Share
McDonald's' strategy, as laid out at its most recent investor day in December 2023, emphasizes its competitive strengths through an "MCD" framework: relevant marketing, core menu development, and the four Ds: digital, drive-thru, delivery, and development. The firm's approach strikes us as cogent, and appears to be meeting the evolving needs of today's restaurant consumer.
Company Report
Expect Strong Hybrid Vehicle Demand to Be a Tailwind for Denso in 2024
As one of the largest global automotive component suppliers, Denso has a diverse product portfolio that ranges from traditional powertrain/thermal components for internal combustion engine vehicles to relatively newer technologies such as electrification and advanced safety/sensing components. To adapt to a “once in a hundred years” transformation in the automotive industry, the company has been spending high amounts on research and development in recent years. In Japan, Denso has been engaging in various projects with its main original equipment manufacturer customer, Toyota Motor, as well as other components supplier companies in the Toyota Group, to jointly develop various technologies, including semiconductors, electrification, and advanced driver-assistance systems. We expect these initiatives will prevent commoditization of its key technologies, thus allowing the company to maintain its narrow moat.
Company Report
Wide-Moat Novonesis Is the Dominant Leader in the Global Enzymes and Cultures Market
Novonesis, created in 2024 through the merger of Novozymes and Chr. Hansen, is the global leader in the industrial enzymes and microbial solutions, or cultures, markets. Enzymes are biological catalysts that allow customers across many different industries to achieve greater yields, better performance, or lower costs for products and production processes, primarily by reducing raw material and energy requirements. Its microbial solutions portfolio caters to the food, beverage, agriculture, and human health end markets. Its products are essential for the fermentation process in dairy and for providing health benefits for dietary supplements and infant nutrition.
Company Report
Narrow-Moat IQVIA Benefits From Strong Clinical Trial Outsourcing Demand; Long-Term Outlook Positive
IQVIA (formerly QuintilesIMS) is the result of the merger of Quintiles, a leading late-stage contract research organization, or CRO, and IMS Health, a dominant player in life sciences data and analytics. The combined company has become a leader among CROs and in the life sciences data and analytics industry. Further, as a result of the merger, the company leads in real-world evidence, in which data from sources such as patient records or medical claims can be used to create clinical evidence for regulatory approval.