Stocks-in-Depth
39 episodes - English - Latest episode: over 5 years ago - ★★★★ - 9 ratingsStocks-in-Depth thoroughly examines the fundamentals of reasonably valued high-quality small and mid-cap growth companies. It is produced by GARP Research, a provider of equity research to institutions including many of the most well-known fund managers for over 20 years. GARP is known for its granular modelling of business lines and in-depth assessment of competition and served markets. Stocks-in-Depth searches for value and growth by researching stocks that may be out of favor, or where a major catalyst to earnings growth is hidden. Our financial models attempt to shed light on trends underneath opaque segment reporting. Stocks in Depth emphasizes balance sheet accounts and profitability margins to determine underlying return on capital, and maintains healthy skepticism regarding pro forma adjustments and undue reliance upon unconventional measures such as EBITDA. We emphasize field visits with managements, industry conferences, non-public competitors and ancillary fields to detect industry dynamics. In our search for the best companies and investment opportunities, we often challenge the consensus view. StocksinDepth forecasts over the long-term, typically over about a three year horizon, and review track records going back for years.
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Episodes
SID 0039 Mitel (MITL) - Part 1
January 18, 2019 20:42 - 1 hour - 51.1 MBMitel has was long relegated to obscurity within the institutional investment community. However, the discussion in this series of episodes will broadly portray what we find are Mitel’s underappreciated competitive strengths. In episode 39, we first lay out how Mitel came to be a major, if little known, player in providing cloud telephony services to businesses.
SID 0038 Realty Income Part II
December 21, 2018 01:37 - 1 hour - 62.8 MBRealty Income has a diversified portfolio by sectors within the single parcel commercial property market. What are the risks of each sector, and how does management approach each?
SID 0037 Realty Income (O) - Part 1
November 21, 2018 23:40 - 41 minutes - 33.5 MBRealty Income operates in a commoditized industry, the ownership of standalone real estate parcels used by certain commercial retail enterprises. In this podcast, we discuss how Realty Income structures its business to provide diversification and attempts to differentiate its offering.
SID 0036 Knowles (KN) Part III
October 18, 2018 14:57 - 48 minutes - 38.7 MBDemand for MEMS microphones increased greatly when Apple put four microphones into the iPhone7. What might further stimulate the worl's appetite for MEMS microphones? In this podcast, Stocks in Depth discusses potential for new technologies like the internet of things (think Alexa) and 5G networks (think machine-to-machine communications) that might continue to cause MEMS microphones to proliferate.
SID 0035 Knowles - Part 2
October 12, 2017 23:28 - 1 hour - 66.6 MBKnowles two most important businesses, MEMS microphones and hearing aid components, share a common theme of eroding market dominance. But, management has devoted a large percentage of revenue into R&D that might address new developments. In Part 2 of this podcast on Knowles, we discuss how Knowles has positioned itself to capture new sources of demand from the internet of things (IoT), and how it has addressed greenfield needs in hearables, e.g. small earbuds, which require distributed pro...
SID 0034 Knowles (KN) - Part 1
September 10, 2017 22:26 - 1 hour - 73.8 MBKnowles Corp. has suffered mightily since its spinoff from Dover Corp. in early 2014, mostly from the disastrous acquisition of Sound Solutions. MEMS penetration of smartphones, currently around 1.7 globally compared to 4 per iPhone, can continue to rise, since this statistic is nearer to one mike per phone outside of Apple. GARP Research has published a major report on artificial intelligence earlier in 2017, part of which discusses advancements in speech recognition. Amazon's Echo / Dot...
SID 0033 Free Trade Doesn't Work - Part 4
January 21, 2017 05:00 - 55 minutes - 44.5 MBDonald Trump is about to be inaugurated as the 45th president of the United States. As far as we can tell, every other country in the world advances a self-serving industrial policy, to the detriment of the United States, which embraces free trade. In this final episode of Stocks-in-Depth’s review of Ian Fletcher’s 2010-2011 book, Free Trade Doesn’t Work, we start by presenting the author’s case that China, Japan, and Europe have emphasized industrial policy over free trade for years. Fle...
SID 0032 Free Trade Doesn't Work - Part 3
January 14, 2017 05:00 - 41 minutes - 33.5 MBInstitutional investment strategists follow economic and market data closely, and tend to weave together a narrative that explains the current trend. Presently the US dollar is rising, like it has two times before in the last few decades. In this podcast, we sample the perspective of Brown Brothers Harriman currency strategist Marc Chandler, whom we believe mistakenly thinks the rising dollar is proof that the U.S. trade deficit is benign. In Part 3 of our series, Free Trade Doesn’t Work,...
SID 0031 Free Trade Doesn't Work - Part 2
January 07, 2017 05:00 - 1 hour - 60 MBThe historical record shows that countries that rise to economic greatness did so through a strong industrial policy, which incorporates tariffs and non-trade barriers. Moreover, at their apex these powers tended to adopt free trade, some vainly thinking that in doing so they might change the world for the better, but nevertheless be able to kick away the ladder upon which others might follow to industrial might. In Part 2 of this special edition of Stocks-in-Depth, we review what economis...
SID 0030 Free Trade Doesn't Work - Part 1
January 01, 2017 05:00 - 39 minutes - 31.4 MBHistory is replete with unanticipated events: Pearl Harbor, the dismantling of the Berlin Wall, the 2008 credit meltdown, and now the improbable ascendance of Donald Trump to America’s highest office. Yet there are many who previse change, but whose ideas are so unorthodox that they are never see the light of day until after the fact. With this in mind, Stocks-in-Depth introduces a little known economist, Ian Fletcher, and his 2010/2011 book, Free Trade Doesn’t Work: What Should Replace It...
SID 0029 Generac (GNRC) Part 4
December 25, 2016 05:00 - 44 minutes - 35.4 MBWhen we first examined the home standby generator market, we were struck by what seems to be a unanimity of opinion that tremendous secular growth would be driven by homeowners increasingly discovering the benefits of having an automated system to supply electric power in times of outages. It’s argued that penetration is low, and that loss of power is not only inconvenient, but uneconomic, for food spoils and families must seek alternative shelter. Yet as we looked into the matter, we saw ...
SID 0028 Generac (GNRC) Part 3
December 13, 2016 20:31 - 1 hour - 66.5 MBGenerac astutely commandeered the clear leadership position in home standby generators during the late 1990s and after the start of the millennium. In so doing, it developed an expertise in engines optimized for burning natural gas or propane, such as its 2-cylinder OVHI 1,000 cc displacement engine that can deliver 16 kW of standby power, as well as by making transfer switches and other related technologies. Moreover, it has structured its supply chain to optimize a position as an “asset ...
SID 0027 Generac - Part 2
November 07, 2016 17:42 - 1 hour - 50.6 MBFor at least a decade, Generac's strategy has been to leverage off of its clear leadership in the home standby generator market to establish market share in portable generators, power washers, and commercial & industrial standby electricity generation markets. How successful has it been? How profitable can these adjacencies be? What other companies have done well? What has happened to the poorer performers in the marketplace?
SID 0026 Generac - Part 1
October 04, 2016 16:51 - 1 hour - 58.7 MBGenerac has seen its sales and earnings decline for over two years. Four powerful storms swept across the U.S. in the 2011-2012 period, but ever since then electric power outages have been well below normal. In Part 1 of our discussion of Generac, we'll cover what businesses this company runs, and what management's strategy is. We will have to stop and resume the discussion in Part 2, but you will start to see how our granular approach of deconsolidating and estimating sales and earnings...
SID 0025 Central Garden & Pet - Part 3
July 02, 2016 13:30 - 1 hour - 88.7 MBCentral Garden & Pet contains numerous distinct businesses within its two namesake segments. In part 3 of this podcast, we spend nearly two hours breaking down the pieces within these segments, and provide granularity so you can appreciate how various rivals compete in each niche. Along the way, we explode the myth that dog food market, in which Central doesn't have much of a presence, has unappetizing growth and profitability. "Big dog food" is also the principal actor in the treat secto...
SID 0024 Central Garden & Pet (CENT) - Part 2
June 02, 2016 15:29 - 1 hour - 65.4 MBIn Part 2 of the Central Garden & Pet podcast, we continue to review the operations of the company beginning with portions of the Pet segment, mainly Aquatics, Flea & Tick products, calming products, equine, and the professional and special ingredients businesses. We discuss the Garden segment, especially controls. Given some of the pieces of the Garden segment seem to have good profit margins, we explore why the other portions of this segment have thin margins, and what actions incoming C...
SID 0023 Central Garden & Pet - Part 1
May 29, 2016 20:24 - 1 hour - 77.9 MBIn Part 1 of this three-part podcast, we start by presenting some background on Central Garden & Pet, and we discuss management changes over the last few years that have affected the company’s strategy. We draw comparisons in our analysis to other consumer product firms, and discuss management’s ability to achieve acceptable levels of ROI in its two segments. After this high-level discussion, we take a detailed tour of many of the businesses in its Pet segment, which depending upon the var...
SID 0022 Columbia Sportswear (COLM)
April 06, 2016 17:18 - 1 hour - 63.7 MBIn this podcast, we examine what has caused growth in outerwear, sportswear, and footwear to accelerate since the 2008 credit crisis for key players such as Columbia, North Face, and other brands. These leading firms have harnessed the opportunity to use outlet stores and e-commerce to redefine their relationship with their customers and retailers, and in so doing have increased their penetration of these essential apparel markets. Coming out of the 2008 meltdown, we recount the grotesque...
SID 0021 Power Integrations (POWI) - Part 2
March 19, 2016 01:00 - 38 minutes - 35 MBIn Part 1 of our podcast of analysis of Power Integrations' stock, we laid out how we saw it fitting in to stock market trends we've seen in 2016, which have been changing from the pattern followed since the credit crisis of 2008-2009. This company has suffered from stagnant sales and compressed margins. However, our methodology is to consider long-term trends and corporate milestones, and we think Power Integrations is beginning another such cycle, even if such episodes have in the past n...
SID 0020 Power Integrations - Part 1
March 12, 2016 22:17 - 1 hour - 66.1 MBThe last major milestone for Power Integrations was its release of LinkSwitch2 in late 2008 to early 2009. LinkSwitch, by our estimate, is the company's leading product family. However, management stopped reporting sales by product about five years ago. In this stock research podcast, GARP discusses a wide range of subjects pertaining to this niche semiconductor enterprise. We aim to demystify the engineering breakthroughs it has achieved, including its latest, InnoSwitch, which is begin...
SID 0019 RealPage (RP)
March 05, 2016 02:21 - 1 hour - 64.3 MBHow much organic growth is really occurring at RealPage? Is the apartment rental market going to become swamped by capacity? How profitable is RealPage really, considering that it discusses its results with institutional holders in non-GAAP terms? What does it look like using more conventional yardsticks? Is there a large market waiting for it and Yardi to penetrate? In this podcast of this lesser known stock market listing, GARP Research attempts to unpack these questions through walki...
SID 0018 Vocera Communications (VCRA)
February 27, 2016 01:00 - 1 hour - 56.1 MBVocera Communications is dearly valued relative to its present level of sales and red ink has been flowing for several years. However, 2015 has been a transformational year. Sales have started to grow and the losses are attenuating. A few years back it was largely dependent upon communications "badges" largely worn by nurses in hospitals, and it was challenged by new text messaging technologies. With a fair amount of development spending and some well-conceived, financially reasonable ac...
SID 0017 Taser International - Part 2
February 20, 2016 03:00 - 1 hour - 55.6 MBShares of Taser International (TASR) retreated dramatically ever since the riots in Ferguson, MO dominated the headlines in early 2015, about one year ago. Is the decline because of fundamental factors such as Motorola's decision to enter the body cam and evidence management business, or is it more from the passage of an unpleasant psychological milestone in race relations? Are international cities rethinking their need for conductive electric weapons or body cameras in the wake of the Eur...
SID 0016: Taser International - Part 1
February 13, 2016 03:00 - 1 hour - 67.2 MBIn part 1 of our discussion of Taser International stock, we explore how there are two segments. Its conductive electronic weapons (CEWs) enjoy extraordinarily high profitability with mid-30's operating margins fully burdened, and competition barely exists. The other segment is Axon, which contains its emerging evidence.com cloud-based evidence management system, which reduces paperwork for police officers, helps manage the multi-million dollar risks of large civil settlements, and organiz...
SID 0015 Entellus Medical: Part 2
February 06, 2016 01:18 - 1 hour - 73.4 MBIn part 2 of this stock research podcast discussing Entellus Medical, we explore the rough an tumble world of how rivals in the medical device industry can vary from raising a hundred million dollars for companies that wind up having minimal revenues and fail, to the foibles of industry giants such as Johnson and Johnson, which can be outwitted by small, nimble competitors such as Entellus Medical. We also share with you the lurid side of small companies that raise capital from investors wh...
SID 0014 Entellus Medical
January 30, 2016 04:54 - 1 hour - 95.5 MBEntellus Medical came public in January 2015 under the premise that it was the leader in office-based balloon sinus dilation, which was a small but increasingly preferred niche compares to FESS operations performed in hospitals. The investment research discussed in this podcast examines whether changes in medicare reimbursement may have been a setback that favored hybrid-FESS procedures, and how steroid implants may have temporarily affected what seemed to be an inevitable shift to treating...
SID 0013 Plantronics
January 22, 2016 01:59 - 1 hour - 81.1 MBInstitutional investors have heard the story that unified communications is under-penetrated, and that soon most businesses will want to buy Plantronics' headsets that incorporate software compatible with Microsoft's Skype for Business cloud-based platform for office workers. Why has penetration stalled at a fraction of where consultants thought it would have been already? This stock research podcast provides equity analysis of Plantronics, and discusses why the penetration rate of unified...
SID 0012 Trimble Navigation - Part 2
January 09, 2016 05:00 - 1 hour - 71.5 MBThree players are preeminent in the field of precision navigation: Trimble, Hexagon, and Topcon. Is the competitive dynamic stabilizing? How are managements dealing with slower revenue growth, and does this mean that end markets are much more penetrated than before? How rapidly can adoption of building information management (BIM) take place? What are the implications for profitability going forward?
SID 0011 Trimble Navigation - Part 1
December 26, 2015 05:00 - 1 hour - 58 MBTrimble Navigation's high-margin geospatial business and its precision navigation systems for farm use have slumped as the dollar has pressured commodities markets. But the company continues to grow in building information modeling (BIM) software and in mobile solutions for truckers and other fleets and work forces. Management is seeking to improve profitability, and heavy investment in new features make its precision location software more indispensable. As technology continues to advan...
SID 0010 Cree, Inc. - Part 2
December 19, 2015 05:00 - 1 hour - 63.3 MBWe described in Part 1 how Cree, Inc. ramped up its headcount in its LED fabrication operation during the major up-cycle that occurred from 2006 through 2010. Although fewer bodies have been added since then, there's "only" been a 10% reduction in corporate headcount since the all-time peak in fiscal 2014, and LED sales are now back to where they were before fiscal 2010. Although Cree has changed course to emphasize lighting fixtures, the company still suffers from low gross margins and ex...
SID 0009 Cree, Inc. - Part 1
December 12, 2015 21:18 - 1 hour - 77.5 MBShares of Cree, Inc. are trading at about the same price as they fetched a decade ago, but at this point in time demand for LEDs for use in commercial lighting applications is very robust. Other companies involved in this area have enjoyed a warm reception from investors, in stark contrast to Cree. In this stock research podcast, we explore in detail what is happening in the realm of commercial lighting design and construction, and how Cree’s strategy has positioned this innovative company...
SID 0008 Zeltiq Aesthetics - Part 2
December 05, 2015 05:00 - 40 minutes - 37 MBBesides having a unique technology, cyrolipolysis, Zeltiq may be able to effectively use this revolutionary platform to address needs beyond the original intention to selectively reduce fat in a non-surgical way. In 2017, it plans to use CoolSculpting to treat grade 2 cellulite and acne. Grade 2 cellulite affects a large portion of women, while some other devices target grades 3 or higher, which are characterized by unsightly manifestations like cottage cheese thighs. By 2018, management ...
SID 0007 Zeltiq Aesthetics: Part 1
November 28, 2015 05:00 - 1 hour - 60 MBZeltiq has single handedly created a new market for reducing fat that targets the moderately overweight segment. It has become the fastest growing aesthetic treatment, which was already notable for the tremendous demand for neuromodulators like Botox and hyaluronic acid fillers like Restylane and Juvaderm. In Part 1 of this podcast, we explore how Zeltiq's high margin consumables and systems have permitted the company to break through the barriers that often restrain new aesthetic products...
SID 0006 iRobot
November 21, 2015 05:00 - 1 hour - 65.4 MBWith the launch of its Roomba 980 vacuum in September 2015, iRobot has added cameras, sensors, and Wi-Fi connectivity. CEO Colin Angle explains why he feels a roving sensor platform aboard the Roomba places iRobot in a unique position to grab leadership in the connected home of the future, and why fixed-point sensor arrangements such as Nest and Dropcam have suddenly fallen from favor. In an analyst day presentation in New York City, CEO Angle unveiled a new corporate strategy that relies o...
SID 0005 Luminex
November 14, 2015 05:30 - 50 minutes - 46.5 MBOut of the blue we've heard from some smart people interested in this obscure molecular diagnostics company. Yet it seems few really know what's going on in this space. All the focus is on the FDA clearance of Luminex's new platform, Aries, which was designed to appeal to hospitals that might otherwise send out complex molecular tests to academic centers or big labs. In this podcast, Bill Baker, CFA, reveals how despite murky corporate-level profit patterns and excitement about Aries, a q...
SID 0004 Advanced Energy
November 07, 2015 05:30 - 59 minutes - 54.9 MBIn 1965 Gordon Moore, co-founder of Intel, made an astounding prediction that transistor density on chips would double roughly every two years. But few know that at the same time he warned chip fabricators would hit a wall when the geometries involved became as small as atoms or particles themselves. IN this podcast, Bill Baker, CFA, describes how this nimble provider of precision power equipment has bucked a morose trend in the semiconductor industry and gained market share among a field ...
SID 0003 Synaptics
November 02, 2015 18:03 - 58 minutes - 53.4 MBWhen Synaptics' stock price withered from over $100 per share this summer to the mid-60s, according to Bloomberg a state-backed buyer from China offered to pay $110 per share for the company, and was rebuffed. What did China see in Synaptics that institutional investors in the U.S. may have missed in this company? In this podcast, Bill Baker, CFA, tears apart the pieces of the company hidden behind opaque segment reporting and discusses the unique competitive advantages held by Synaptics.
SID 0002 Myriad Genetics
November 02, 2015 16:45 - 55 minutes - 50.8 MBIn Myriad's analyst day in NYC on September 14, 2015, management discussed the outlook for several new growth drivers, and it addressed challenges faced in its legacy BRCA1/2 hereditary cancer genetic testing franchise. We explore what's new, the ins and outs of each opportunity, and delve into the intricacies of companion diagnostics.
SID 0001 Monotype Imaging
November 02, 2015 16:22 - 33 minutes - 31 MBMonotype Imaging is regarded as having a unique and somewhat bullet-proof franchise, being a "toll collector" when companies use fonts anywhere from on a laser printer to cloud-based publishing in mobile ads. But why has there been margin erosion and deceleration of growth? We explore what's under the hood in this episode...