Episodes
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This is Matt Reustle. Today, we break down Winmark, a major player in the reseller economy. You're likely familiar with some of Winmark’s brands, like Plato's Closet or Play It Again Sports. Altogether, Winmark operates five brands through a franchising model.
Our guest to break down Winmark is the current CEO, Brett Heffes. During our conversation, we discuss the broader reseller economy, the dynamics of managing those brands and different franchise brands, and how Winmark thinks about growth. In the back half of the conversation, I also made sure to talk to Brett about his thoughts on capital allocation, focusing the business, and yes, on investor communication. Please enjoy this breakdown of Winmark.
Interested in hiring from the Colossus Community? Click here.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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This episode is brought to you by Public. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.
This episode is brought to you by Tegus, the only investment research platform built for the investor. With traditional research vendors, the diligence process is slow, fragmented, and expensive. That leaves investors competing on how well they can aggregate data — not on their unique ability to analyze insights and make great investment decisions. Tegus offers an end-to-end platform with all the data you need to get up to speed on a company or market: up-to-the-minute financials, customizable models, management and culture checks, and, of course, our vast and growing library of expert call transcripts. Tegus is changing the world of expert research. Learn more and get your free trial at tegus.com/patrick.
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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes
(00:00:00) Welcome to Business Breakdowns
(00:04:25) Exploring the Resale Market with Windmark's CEO
(00:06:34) The Mechanics of Winmark's Franchise Model
(00:07:10) Winmark's Unique Position In The Resale Economy
(00:12:21) Franchisee Support and Business Model Insights
(00:20:44) Growth Strategies and Franchisee Expansion Philosophy
(00:24:12) A Look At The Franchisee Agreement
(00:26:57) Traits of Successful Franchisees and Common Mistakes
(00:28:42) Effective Marketing Strategies for Franchisees
(00:30:45) The Importance of Viewing Stores as Legacy Assets
(00:32:33) Renewal Rates and Franchisee Health as Key Metrics
(00:35:27) Shifting Focus From Leasing Business to Core Resale Operations
(00:41:19) Capital Allocation and Shareholder Value
(00:45:51) A Unique Approach to Investor Relations
(00:47:31) Lessons Learned From Breaking Down Winmark
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This is Matt Reustle. We are back in the world of aviation today, breaking down Embraer. Embraer has carved out an interesting niche, manufacturing regional jets, business jets, and military aircrafts.
Our guest is Richard Aboulafia, Managing Director at AeroDynamic Advisory and long-time aviation analyst and consultant. We break down how this aviation success story grew out of Brazil, the evolution of the regional jet market, the business jet market, & tap into military aircrafts, and, of course, we cover the opportunity presented by Boeing today. Please enjoy this breakdown of Embraer.
Interested in hiring from the Colossus Community? Click here.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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This episode is brought to you by Public. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.
This episode is brought to you by Tegus, the go-to destination for bold investing. The investment research platform trusted by 95% of the top 20 global private equity firms just got even better. Building on their solid reputation for expert insights, Tegus has expanded to become the first true all-in-one research platform. The new Tegus makes diligence faster, easier, and more convenient than ever before. Your Tegus license gives you access to over 70,000 expert transcripts, more than 4,000 fully drivable financial models, and exclusive datasets like company management checks, industry KPIs, hard-to-find non-GAAP data, and more. Tegus is the fastest way to learn about a public or private company and the most cost-effective way to conduct investment research — now all under one roof. Learn more and get your free trial at tegus.com/patrick.
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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes
(00:00:00) Welcome to Business Breakdowns
(00:04:49) Embraer's Strategic Positioning in the Aerospace Market
(00:05:54) The Fascinating Origin Story of Embraer
(00:08:27) Key Figures Behind Embraer's Rise
(00:09:33) Embraer's Breakthrough in the U.S. Market
(00:10:25) The Evolution of Embraer's Business Model
(00:11:07) Comparing Embraer with Boeing and Airbus
(00:12:00) Dynamics of the Regional Jet Market
(00:15:44) The Future of Regional Aviation and Embraer's Role
(00:19:24) Exploring Embraer's Defense and Military Segment
(00:24:03) Embraer's Potential Amidst Boeing's Challenges
(00:28:48) The Intricacies of Jet Manufacturing and Sales
(00:30:15) Embraer's Competitive Landscape and Challenges
(00:31:03) Navigating Currency Volatility and Hedging Strategies
(00:32:01) Defense Sector Dynamics and Geopolitical Influences
(00:33:33) Aftermarket Revenue and Replacement Cycles
(00:37:05) Embraer's Strategic Aspirations and Boeing Partnership Dynamics
(00:43:58) Bombardier's Shift and Market Dynamics
(00:46:56) Assessing Risks and Opportunities for Embraer
(00:49:05) Key Lessons from Embraer
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Missing episodes?
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Today we’re replaying our Breakdown on Boeing, hosted by Zack Fuss. We recorded the episode in September before the mid-air blowout on a Boeing 737 operated by Alaska Airlines and the subsequent management changes, but it serves as a useful overview of the commercial airline industry writ large, how we got here, and what the future might look like. It also pairs well with the breakdown we’re releasing next about Brazilian-based airplane manufacturer Embraer. So look out for that, and in the meantime, enjoy this episode on Boeing.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke
Show Notes
(00:03:08) - (First question) - An introduction to the aerospace industry and Boeing's role in it
(00:06:11) - Boeing's business model today
(00:10:22) - How the aerospace industry settled into a duopoly
(00:13:00) - Costs associated with airplane manufacturing
(00:14:32) - The life expectancy of an aircraft
(00:15:16) - Dealing with the supply coordination problem
(00:18:09) - The Boeing and McDonnell Douglas merger
(00:21:21) - Problems Boeing has faced over the past five years
(00:21:14) - How leadership turnover has permeated through Boeing
(00:28:33) - Competitive headwinds Boeing can face
(00:33:40) - How Boeing will grow in the aerospace industry
(00:38:09) - Boeing's eVTOL strategy
(00:42:12) - What is impacting the profitability of the business
(00:44:08) - The biggest challenge facing the aerospace industry
(00:45:27) - Lessons learned from studying Boeing
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This is Matt Reustle. Today we are breaking down Duolingo, the learning app built on language learning that is increasingly expanding into other territories like math and music. Founder Luis von Ahn is constantly looking for ways to make this accessible and free to use for people all around the world while simultaneously finding reasonable ways to monetize and create a profitable, longer-term business. Duolingo has adjusted its business model over time to ensure that this can happen.
My guest is Thaiha Nguyen from Baillie Gifford. You should assume that most of our guests own the businesses that they are covering on business breakdowns, but it's important to mention here that Thaiha works for Baillie Gifford's Positive Change Strategy. They invest not only for returns but also for the impact on society.
Thaiha and I cover the fascinating founder story behind Duolingo, how Duolingo has succeeded in a largely offline market, how they've approached monetization, and how they plan to expand from here. Please enjoy this breakdown of Duolingo.
Interested in hiring from the Colossus Community? Click here.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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This episode is brought to you by Public. A High-Yield Cash Account is a secondary brokerage account with Public Investing, member FINRA/SIPC. Funds from this account are automatically deposited into partner banks where they earn a variable interest and are eligible for FDIC insurance. Neither Public Investing nor any of its affiliates is a bank. US only. Learn more at public.com/disclosures/high-yield-account.
This episode is brought to you by Tegus, the only investment research platform built for fundamental investors. Whether you’re trying to get up to speed on a new market or keep tabs on a portfolio company, Tegus is the end-to-end investment research platform you need. With Tegus, you can quickly understand a company's business model, drivers, benchmarks, and management quality. To monitor an entire market, download our pre-built financial models — or update your own with the latest data using Tegus’ new Excel Add-In. Tegus gives you all of this and more, all bundled into a single software license. Find out why 95% of the top 20 global private equity firms are Tegus customers. Learn more and get your free trial at tegus.com/patrick.
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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes
(00:00:00) Welcome to Business Breakdowns
(00:05:09) The Fascinating Founder Story of Duolingo
(00:11:42) Exploring the Language Learning Market and Duolingo's Impact
(00:25:26) The Evolution From Translation Service to EdTech Leader
(00:28:04) How Duolingo Became a Freemium Giant
(00:32:17) Understanding Duolingo's Diverse User Base
(00:34:03) Why People Choose Paid Subscriptions Over Free Options
(00:36:54) Duolingo's Certification and Assessment Business
(00:39:57) Leveraging AI for Personalized Learning Experiences
(00:43:06) Exploring Duolingo's Financial Health and Growth Strategy
(00:46:37) The Future of Educational Offerings Beyond Language Learning
(00:48:20) Duolingo in the Classroom
(00:54:50) Navigating the Risks and Opportunities in EdTech
(00:57:58) Key Lessons from Duolingo
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This is Zack Fuss. Today we are breaking down the Mitsubishi Corporation. In Japan, the business model of a trading company is prominent. The big five trading companies caught the attention of global investors in 2020, when Berkshire Hathaway disclosed a major stake in all of them: Mitsubishi, Mitsui, Itochu, Marubeni, and Sumitomo. Today's Berkshire stake is nearly 10%.
I'm joined by Krishna Mohanraj, a Portfolio Manager at Diamond Hill Capital Management. In this episode, we discuss how the rich history of trading houses is steeped in Japanese culture and how each differs from one another. Krishna helps unravel the evolution of stakeholder priorities and how capital allocation policies have changed in the Japanese capital markets. Please enjoy this Breakdown of Mitsubishi Corporation.
Interested in hiring from the Colossus Community? Click here.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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This episode is brought to you by Tegus, the only investment research platform built for the investor. With traditional research vendors, the diligence process is slow, fragmented, and expensive. That leaves investors competing on how well they can aggregate data — not on their unique ability to analyze insights and make great investment decisions. Tegus offers an end-to-end platform with all the data you need to get up to speed on a company or market: up-to-the-minute financials, customizable models, management and culture checks, and, of course, our vast and growing library of expert call transcripts. Tegus is changing the world of expert research. Learn more and get your free trial at tegus.com/patrick.
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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes
(00:00:00) Welcome to Business Breakdowns
(00:03:12) First Question - Understanding Mitsubishi's Global Impact and Business Model
(00:07:12) The Evolution of Mitsubishi and Japanese Trading Houses
(00:12:12) Mitsubishi's Investment Case and Market Position
(00:15:02) Comparing Mitsubishi with Other Japanese Trading Houses
(00:18:22) The Secret to Mitsubishi's Success and Global Network
(00:21:16) The Relevance of Berkshire’s Investment in the Japanese Trading Houses
(00:26:45) A Cultural Shift in the Orientation of Japanese Businesses Towards Their Shareholders
(00:28:35) Valuing Mitsubishi
(00:31:05) Reinvesting in The Business And Reallocating Capital
(00:33:02) Mitsubishi’s Unique Management Dynamic
(00:38:54) Advantages of the Mitsubishi Group
(00:42:44) Lessons Learned from Mitsubishi
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Today, we are breaking down a giant in the medical device space, Intuitive Surgical. Intuitive creates robotic products to assist minimally invasive surgeries. Its Da Vinci system is a pioneer in this area as it increases the efficiency & accuracy of surgery and reduces the burden on the surgeons themselves.
To break down Intuitive, I'm joined by Joseph Thomas, equity analyst at the global asset manager, Ninety One. Joe walks us through the history of surgical procedures, the emergence of robotics & surgery, and how Intuitive has emerged as the winner in this space. Please enjoy this breakdown on Intuitive Surgical.
Interested in hiring from the Colossus Community? Click here.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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This episode is brought to you by Tegus, the only investment research platform built for the investor. With traditional research vendors, the diligence process is slow, fragmented, and expensive. That leaves investors competing on how well they can aggregate data — not on their unique ability to analyze insights and make great investment decisions. Tegus offers an end-to-end platform with all the data you need to get up to speed on a company or market: up-to-the-minute financials, customizable models, management and culture checks, and, of course, our vast and growing library of expert call transcripts. Tegus is changing the world of expert research. Learn more and get your free trial at tegus.com/patrick.
-----
Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes
(00:00:00) Welcome to Business Breakdowns
(00:02:55) First Question - The Evolution of Surgery: From Ancient Practices to Robot-Assisted
(00:08:14) Revolutionizing Surgery With the Da Vinci System
(00:11:23) Early Challenges and Regulatory Hurdles for Robotic Surgery
(00:14:59) The Future of Robotic Surgery
(00:22:40) Exploring the Business Model of Intuitive Surgical
(00:29:26) The Fifth Generation of the Da Vinci System
(00:37:26) Intuitive Surgical's Financial Overview
(00:41:16) Depreciation, Secondary Markets, and Economic Factors
(00:45:52) R&D Investments and Digital Innovations
(00:49:04) Navigating the Competitive Landscape
(00:55:04) Global Expansion and Market Opportunities
(00:57:27) Identifying Risks and Disruptions
(01:01:37) Key Lessons from Intuitive Surgical
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This is Matt Reustle. Today, we are breaking down D.R. Horton, America’s largest homebuilder. Our guest is Ed Wachenheim, Founder of Greenhaven Associates. Ed takes us through an incredible discussion of D.R. Horton and homebuilders broadly, including how much has changed with this business model over the years.
Ed shares countless entertaining stories with the management teams and backs it all up with the numbers behind this business. It's an excellent conversation and an excellent glimpse at how someone like Ed approaches investments. Please enjoy this breakdown of D.R. Horton.
Ed’s Book: Common Stocks and Common Sense
Interested in hiring from the Colossus Community? Click here.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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This episode is brought to you by Tegus, the go-to destination for bold investing. The investment research platform trusted by 95% of the top 20 global private equity firms just got even better. Building on their solid reputation for expert insights, Tegus has expanded to become the first true all-in-one research platform. The new Tegus makes diligence faster, easier, and more convenient than ever before. Your Tegus license gives you access to over 70,000 expert transcripts, more than 4,000 fully drivable financial models, and exclusive datasets like company management checks, industry KPIs, hard-to-find non-GAAP data, and more. Tegus is the fastest way to learn about a public or private company and the most cost-effective way to conduct investment research — now all under one roof. Learn more and get your free trial at tegus.com/patrick.
-----
Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes
(00:00:00) Welcome to Business Breakdowns
(00:04:33) First Question - Understanding the Home Building Business Model
(00:06:56) Evolution of the Home Building Industry
(00:09:41) The Impact of Land Ownership on Home Builders
(00:14:29) A Transformation of the Home Building Business Model
(00:17:35) Unique Characteristics of D.R. Horton
(00:24:16) The Geographic Concentration of Home Builders
(00:25:59) Current State and Future of the Home Building Industry
(00:33:44) The Resilience of the Home Building Industry
(00:34:56) Efficiencies and Margins in Home Building
(00:37:02) Forecasting Revenue Growth in the Home Building Industry
(00:40:04) Comparing D.R. Horton vs. NVR
(00:41:23) The Valuation Gap in the Home Building Industry
(00:57:05) The Shift Towards Institutional Ownership in Home Building
(00:58:13) Impact of Interest Rates on Home Building
(01:02:09) Lessons from Evaluating D.R. Horton
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This is Matt Reustle. Today we are releasing a bonus episode of Breakdowns. While we typically love to cover businesses, this was an interesting opportunity to cover a special situation around a business. And in this case, the FTX bankruptcy.
I was joined by Erin Broderick, Head of U.S. Cross-Border Restructuring & Insolvency at Eversheds Sutherland. Erin represents the Ad Hoc Committee of Non-U.S. customers for FTX, giving her a front-row and hands-on seat to everything that's unfolded at FTX since they entered Chapter 11 in November of 2022. We cover the basics around bankruptcy proceedings, using FTX as a lens in comparison to other restructurings. Please enjoy this bankruptcy breakdown on FTX.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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This episode is brought to you by Tegus, the go-to destination for bold investing. The investment research platform trusted by 95% of the top 20 global private equity firms just got even better. Building on their solid reputation for expert insights, Tegus has expanded to become the first true all-in-one research platform. The new Tegus makes diligence faster, easier, and more convenient than ever before. Your Tegus license gives you access to over 70,000 expert transcripts, more than 4,000 fully drivable financial models, and exclusive datasets like company management checks, industry KPIs, hard-to-find non-GAAP data, and more. Tegus is the fastest way to learn about a public or private company and the most cost-effective way to conduct investment research — now all under one roof. Learn more and get your free trial at tegus.com/patrick.
-----
Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes
(00:00:00) Welcome to Business Breakdowns
(00:03:31) First Question - Understanding Bankruptcy Proceedings
(00:04:15) The FTX Bankruptcy Case
(00:05:19) The Role of Chapter 11 and Chapter 7 in Bankruptcy
(00:05:52) The Challenges of Restructuring FTX
(00:08:18) The Role of Customers in the FTX Case
(00:12:16) Complexities of Tracing and Identifying Assets
(00:22:10) The Role of Secondary Hedge Funds
(00:27:05) The Issue of Dollarization of Claims
(00:32:35) The Process of Uncovering Assets
(00:36:39) Proposed Recovery Plan for FTX
(00:45:21) Upcoming Timeline For FTX To Exit Bankruptcy
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This is Matt Reustle. Today, we are going into the land of oil and gas to break down CNX. The history of CNX dates back over 150 years. When it comes to energy production, the company's evolution has been very comparable to that of the United States.
Our guest today is James Wilson, manager of The Huginn Fund at Phoenix Asset Management. We discuss the CNX backstory and how it took its coal roots to build this massive natural gas business. We also cover what differentiates CNX's management team and operational strategy relative to Exploration & Production (E&P) peers. Please enjoy this breakdown of CNX.
Colossus Recruiting - Find your next role or hire.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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This episode is brought to you by Tegus, the only investment research platform built for fundamental investors. How hard do you work to get the insights you need to make a great investment decision? How many hours do you spend digging through public records and expert transcripts, or manually updating complex models? Investors should compete on their ability to analyze investments, not how well they aggregate data. That’s why Tegus offers a unified, end-to-end research platform that combines robust qualitative content sets, up-to-date financial data, management and culture checks, and more — all in the same easy-to-use, streamlined user experience. 95% of the top 20 global private equity firms use Tegus. Shouldn’t you? Learn more and get your free trial at tegus.com/patrick.
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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes
(00:00:00) Welcome to Business Breakdowns
(00:02:32) First Question - The History and Evolution of CNX
(00:03:17) Understanding the Business Model
(00:10:33) The Transition from Coal to Natural Gas in the US
(00:16:44) Gathering and Compressing Assets to Leverage Fixed Costs
(00:21:45) Understanding the Unit Economics of CNX
(00:28:27) The Competitive Landscape in Drilling
(00:30:05) The Engineering Excellence and Leadership at CNX
(00:30:46) Exploring the Potential of the Utica Shale
(00:32:27) The Economics of Drilling
(00:34:27) Managing the Volatility of Natural Gas Prices
(00:41:37) The Impact of Regulation on the Drilling Industry
(00:44:59) The Role of Acquisitions in Expanding Reserves
(00:51:14) Lessons Learned From CNX
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This is Matt Reustle. Today, we are breaking down Vulcan Materials. Vulcan is America's largest producer of construction aggregates. This includes all of the crushed rock, sand, and gravel, which gets used for the foundation of nearly everything around us. Think of all of the buildings, the roads, and the infrastructure that define the physical footprint of America.
To break down Vulcan, I am joined by Rob Hansen, Senior Analyst at Vontobel Asset Management. Rob shares what makes this relatively simple business so successful. We get into the dynamics of operating quarries, the logistics of moving rocks, and what is cyclical versus what is not. Please enjoy this breakdown of Vulcan Materials.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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This episode is brought to you by 10 East. 10 East is a platform where qualified investors can co-invest on a deal-by-deal basis across private equity, private credit, real estate ventures, and other one-off opportunities typically unavailable through traditional channels. It's no surprise that founders, executives, and portfolio managers from leading investment firms are using 10 East to diversify their personal portfolios. Their level of sourcing and diligence is institutional grade. To learn more, check out 10east.com.
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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes
(00:00:00) Welcome to Business Breakdowns
(00:03:15) First Question - Introduction to Vulcan Materials and the Construction Aggregates Market
(00:07:35) Exploring the History & Evolution of Vulcan Materials
(00:09:10) Geographical Distribution and Impact on the Quarry Market
(00:12:31) The Role of Logistics and Transportation in the Aggregates Industry
(00:17:42) The Impact of Vertical Integration and Technology on Vulcan's Operations
(00:19:26) Analyzing the Volume and Pricing Trends in The Aggregates Industry
(00:23:49) The Role of Technology in Enhancing Customer Experience and Operational Efficiency
(00:29:31) Vulcan’s Pricing Strategy
(00:32:31) The Capital Intensive Nature of The Business
(00:36:21) Optimizing Logistics Through M&A
(00:43:09) Trends in Earnings Growth and Future Expectations Among Commercial Construction
(00:47:51) Understanding the Risks and Challenges In This Industry
(00:50:17) Key Lessons from Vulcan's Business Model
Important Information:
Information provided represents the views of a company of the Vontobel Group (“Vontobel”) and should not be considered investment advice and/or legal, tax, financial or other advice. Further, not a recommendation to purchase, hold or sell any investment and no representation is given that the securities discussed are suitable for any particular investor.
Although Vontobel believes that the information provided in this document is based on reliable sources, it cannot assume responsibility for the quality, correctness, timeliness or completeness of the information contained in this document.
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This is Matt Reustle. Today we are breaking down HEICO. HEICO is an aerospace business, most notably operating in the aircraft parts and repairs market. This is another case study of a very successful business in a nonobvious niche market.
To break down HEICO, I am joined by Eric Ruden, an analyst at Ironvine Capital. We cover the fascinating story of the Mendelson family and how they've built HEICO into what it is today. And if you haven't listened to the 50X Podcast on TransDigm, it makes for an excellent pairing with this HEICO breakdown. So please enjoy this breakdown on HEICO.
Pair with TransDigm on 50X.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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This episode is brought to you by 10 East. 10 East is a platform where qualified investors can co-invest on a deal-by-deal basis across private equity, private credit, real estate ventures, and other one-off opportunities typically unavailable through traditional channels. It's no surprise that founders, executives, and portfolio managers from leading investment firms are using 10 East to diversify their personal portfolios. Their level of sourcing and diligence is institutional grade. To learn more, check out 10east.com.
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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes
(00:00:00) Welcome to Business Breakdowns
(00:02:53) First Question - Understanding the Aerospace Market
(00:06:58) The Role of HEICO in the Aerospace Market
(00:15:03) The History and Evolution of HEICO
(00:20:23) Introduction to Mendelson Brothers and their Business Operations
(00:22:58) The PMA Business and its Growth Drivers
(00:28:49) The Role of HEICO’s Go-to-Market Strategy Against OEMs
(00:40:05) The Role of M&A in HEICO’s Growth Strategy
(00:43:46) Comparing HEICO and TransDigm
(00:48:35) HEICO’s Financial Model
(00:50:06) Potential Risks and Challenges for Heico
(00:57:55) Key Lessons from Heico’s Business Model
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This is Matt Reustle. Today, we are breaking down Intel. In the late 80s, a newly appointed CEO, Andy Grove, pivoted to exit memory chips and focus on logic chips. They were the leading edge chip designer, but Intel missed out on the mobile market and EUV technology as technology shifted. Now they're left playing catch up and falling from their iconic status.
To cover Intel, I am joined by Todd Ahlsten, CIO of Parnassus Investments. Todd started covering semiconductors in the mid-nineties and has since lived through eight cycles in the sector. We look at what separates secular changes from cyclical ones, and Todd helps outline what went wrong, what is changing today, and what we can monitor as this progresses. Please enjoy this breakdown of Intel.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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This episode is brought to you by 10 East. 10 East is a platform where qualified investors can co-invest on a deal-by-deal basis across private equity, private credit, real estate ventures, and other one-off opportunities typically unavailable through traditional channels. It's no surprise that founders, executives, and portfolio managers from leading investment firms are using 10 East to diversify their personal portfolios. Their level of sourcing and diligence is institutional grade. To learn more, check out 10east.com.
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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes:
(00:00:00) Welcome to Business Breakdowns
(00:04:32) Introduction to Intel's History and Current Challenges
(00:10:45) Intel's Missed Opportunities and Current State
(00:12:02) Intel's Strategy for Recovery
(00:18:30) Tracking Intel's Progress
(00:21:43) Understanding Intel's Profit Pools and Future Potential
(00:29:21) The Future of GPU and CPU Markets
(00:34:34) The Future of Intel's GPU Space
(00:35:49) Recovering Intel's CPU Business
(00:44:21) The Geopolitical Dynamics Impacting Intel
(00:48:25) Competition Landscape: NVIDIA and AMD
(00:52:28) Intel's Diverse Portfolio: Mobileye, Altera, and More
(00:56:09) Risks and Challenges for Intel
(00:59:17) Intel's Role in the Semiconductor Cycle
(01:05:47) Lessons from Intel's Business Model
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I'm Zack Fuss. Today we're breaking down Arthur J. Gallagher, a global insurance brokerage. AJG was established in 1927 by Arthur James Gallagher and is now one of the largest insurance brokerages by revenue, exceeding $10 billion. AJG competes with the likes of Marsh McLennan, Aon, and Willis Towers Watson.
To break down Gallagher, I am joined by Mike Hayward, a portfolio manager at WCM Asset Management. During this conversation, we discussed the company's successful acquisition strategy, the strength of the insurance brokerage industry, and how the shifting industry dynamics will impact the durability of its competitive advantage. Please enjoy this breakdown of A. J. Gallagher.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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This episode is brought to you by 10 East. 10 East is a platform where qualified investors can co-invest on a deal-by-deal basis across private equity, private credit, real estate ventures, and other one-off opportunities typically unavailable through traditional channels. It's no surprise that founders, executives, and portfolio managers from leading investment firms are using 10 East to diversify their personal portfolios. Their level of sourcing and diligence is institutional grade. To learn more, check out 10east.com.
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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes:
[00:00:00] First question - What AJG is and what they do
[00:03:28] Value chain and key components of the insurance industry
[00:06:03] Gallagher’s business segments and specialty
[00:08:58] Their defensibility and competitive edge
[00:13:22] Stickiness and noteworthy retention rates
[00:17:06] Why the market undervalues their stickiness
[00:19:19] Their acquisition strategy and its role in ongoing, consistent growth
[00:25:20] What ‘The Gallagher Way’ really means and company history
[00:29:52] Overview of the financial model and structure
[00:34:09] Potential risks to Gallagher’s continued success
[00:39:21] Industry regulation and how they can affect the business
[00:42:46] Lessons for investors and operators
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This is Matt Reustle. Today, we are breaking down the technology conglomerate Samsung. Only Apple, Microsoft, Google, and Amazon ranked higher than Samsung in Interbrand's latest brand value rankings, with Samsung being the fifth most valuable brand in the world. It's everywhere around us: our phones, our TVs, our refrigerators, our washing machines. But, it's not those finished products that drive the majority of Samsung's profits.
To break down Samsung, I'm joined by David Samra, Managing Director and Founding Partner of the Artisan Partners International Value Team. We go inside this vertically integrated technology giant and talk about the history of the business, the manufacturing DNA and what it means to create hardware components, and how those hardware components unlock significant opportunities in the smartphone market for Samsung.
Please enjoy this breakdown on Samsung.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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This episode is brought to you by 10 East. 10 East is a platform where qualified investors can co-invest on a deal-by-deal basis across private equity, private credit, real estate ventures, and other one-off opportunities typically unavailable through traditional channels. It's no surprise that founders, executives, and portfolio managers from leading investment firms are using 10 East to diversify their personal portfolios. Their level of sourcing and diligence is institutional grade. To learn more, check out 10east.com.
CSIMA, Columbia Student Investment Management Association, is hosting its 27th annual conference in New York on Friday, February 9th. Keynote speakers include John Griffin from Blue Ridge, Ian McKinnon from Sandia, Jan Hummel from Paradigm, and Sally Krawcheck from Ellevest. Get your tickets at csima.info/conference.
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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes
(00:00) Welcome to Business Breakdowns
(04:28) First Question - How he defines Samsung compared to other brands
(09:13) Samsung's history and what led them to their capabilities today
(13:59) Unique growth and shared gains in the semiconductor industry
(18:08) Where Samsung compares to other chips in the semiconductor space
(22:08) Risks moving into other chip production areas
(25:53) The disparity in margin profile between divisions
(31:29) Potential for local competitors to bring chips into the market
(32:48) How he thinks about growing the barriers to entry for the separate businesses
(35:15) Leaving the handset business
(36:31) How he thinks about the business on a consolidated basis
(41:19) Risks associated with the business
(44:09) The regulatory climate in South Korea
(48:33) Things he learned from studying Samsung
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You never own a Patek Philippe, you merely watch over it for the next generation. I'll say it's the best marketing campaign in history, a campaign appropriate for the world's premier watchmaker and a watchmaker worthy of a Business Breakdown.
Our guest today is John Reardon from Collectability. John has worked at Sotheby's, the auction house, and spent a decade at Patek Philippe in the early 2000s. He continues to write for Patek Philippe Magazine while he has launched Collectability, a brand dedicated to vintage and preowned Patek Philippe.
We cover what makes Patek such a special brand. There is an almost 200-year history in craftsmanship and countless patents (like that self-winding mechanism that powers all automatic watches today.) What Philippe Stern did in 1989 could be worthy of a 10-episode series, so there is much to learn from this episode. Please enjoy this breakdown of Patek Philippe.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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This episode is brought to you by 10 East. 10 East is a platform where qualified investors can co-invest on a deal-by-deal basis across private equity, private credit, real estate ventures, and other one-off opportunities typically unavailable through traditional channels. It's no surprise that founders, executives, and portfolio managers from leading investment firms are using 10 East to diversify their personal portfolios. Their level of sourcing and diligence is institutional grade. To learn more, check out 10east.com.
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CSIMA, Columbia Student Investment Management Association, is hosting its 27th annual conference in New York on Friday, February 9th. Keynote speakers include John Griffin from Blue Ridge, Ian McKinnon from Sandia, Jan Hummel from Paradigm, and Sally Krawcheck from Ellevest. Get your tickets at csima.info/conference.
-----
Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes
(00:00:00) Welcome to Business Breakdowns
(00:04:21) First Question, The main differences between Patek Philippe and Rolex
(00:08:12) An introduction to Patek Philippe’s brand
(00:10:27) The founding story of the business
(00:12:54) Henry Graves and the watches that he made for the brand
(00:18:26) The production process for making a Patek Philippe watch
(00:21:36) A look at the 1989 and its importance to the business
(00:23:48) The types of people who were interested in the brand and purchasing at auction in 1989
(00:26:21) An overview of the successful marketing campaigns of the 1990s
(00:29:06) Patek’s strategy at auctions, embracing both consignment and buying
(00:32:18) The general size and scope of the Patek Philippe secondary market
(00:34:00) The brand’s perspective of the secondary market and whether it affects the way they market new items
(00:38:27) John’s personal experience working at Patek Philippe
(00:42:16) The company’s distribution strategy
(00:45:22) Breaking down the points of sale, branded dealers versus authorized dealers
(00:46:09) The mindset behind consolidating dealers and the exclusivity it created as a byproduct
(00:48:02) How the LVMH acquisition of Tiffany has affected Patek Philippe
(00:50:58) The potential of Patek Philippe being acquired by another company
(00:55:28) Lessons learned from Patek Philippe
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Today, we're running our Business Breakdown on Rolex. This episode of Rolex is one of our most popular breakdowns of all time, so it's always worth revisiting. But, it's also a timely revisit…Later this week, we'll be releasing a Business Breakdown on Patek Philippe and this episode of Rolex is the perfect appetizer for that discussion.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes
(00:00:00) Welcome to Business Breakdowns
(00:03:01) First question - His favorite Rolex watch ever
(00:04:24) What makes the Rolex Daytona such a special watch
(00:07:19) The job-to-be-done for high-end watches beyond just telling them the time
(00:12:18) The strategy behind marketing luxury products: The Luxury Strategy
(00:14:34) An overview of the Rolex business
(00:19:38) The history of Rolex
(00:38:45) Their genius in marketing and distribution
(00:41:55) How they make decisions and what others can learn from them
(00:47:14) The financials of Rolex and other luxury watch brands
(00:49:02) Most important business lessons others can learn from Rolex
(00:52:54) Other luxury brands worth studying
(00:57:26) Negative lessons gleaned from Rolex
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This is Zack Fuss. Today we are breaking down the largest privately-owned software business in Europe, Visma. Visma is a software company with over 15,000 employees offering accounting, payroll, and HR software products for customers across the Nordic, Benelux, and Baltic regions. Founded in Oslo in 1996, Visma grew organically and via acquisition of 178 companies.
We're joined by Nic Humphries, the Senior Partner and Executive Chairman of Hg Capital, which is one of the leading software investors in Europe. Nic is intimately familiar with Visma, given Hg owns over 50% of the business and has been invested for over 17 years. Hg initially invested as part of a take-private transaction in 2006 at just a $450 million valuation and based upon the latest recap completed in December, today, the business is valued at over $21 billion.
As part of this conversation, we discussed the business history, growth, and recent leadership transition. Please enjoy this breakdown of Visma.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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This episode is brought to you by Tegus, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/patrick.
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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes
(00:00:00) Welcome to Business Breakdowns
(00:02:44) First question - Introducing Visma and its operations
(00:10:51) Identifying Visma's unique attributes in the payroll sector
(00:13:32) Assessing Visma's current scale and potential for growth
(00:17:45) Considering the shift to a cloud-native approach
(00:20:49) Reflecting on key lessons from past errors
(00:23:19) Strategies for scaling the business effectively
(00:28:15) Weighing cash reinvestment against shareholder distributions
(00:31:39) Øystein Moan's influence within the company
(00:33:06) Deciding the right time for an IPO
(00:39:23) Analyzing the risks facing Visma
(00:41:22) Exploring Visma's competitive advantages
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This is Matt Reustle. Today we venture into the world of HVAC to break down Trane Technologies. Now, it's not often that I come across an industrial company with a $50 billion market cap that I just hadn't heard of. So when our guest today, Brett Larson, investor at NZS Capital, suggested Trane, it was as easy of a 'yes' as they come.
Brett and I cover the long corporate history of Trane, the dynamics that separate residential HVAC from commercial HVAC, and how Trane has helped create this unique consolidated industry. You may never look at your thermostat the same after this episode. Please enjoy this breakdown of Trane Technologies.
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This episode is brought to you by Tegus, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/patrick.
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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @zbfuss | @ReustleMatt | @domcooke
Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).
Show Notes:
(00:00:00) Welcome to Business Breakdowns
(00:01:59) Brett tells us what Trane is
(00:02:34) The companies corporate history and how it became Trane
(00:04:05) Overall size of the commercial market
(00:05:18) He explains the go to market sales strategy
(00:09:20) An additional breakdown of business cost
(00:10:55) Revenue received from Trane software
(00:14:53) Trane’s market share in the residential space
(00:15:52) Differentiated products available on the commercial side
(00:17:17) Included commercial software components
(00:19:15) Average life cycle for commercial units
(00:21:19) Demand on commercial and residential sides of the market
(00:25:31) The cyclicality of the business and how revenue has trended over time
(00:27:35) A look at share gains and industry consolidation over recent years
(00:31:09) How the management team is viewed by the industry
(00:34:46) Key contributions from MNA and future consolidation
(00:37:02) Data center demand for HVAC units
(00:39:40) Transport refrigerators key role in the industry market
(00:41:02) Risks associated with the business
(00:43:30) What he’s learned from studying Trane
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This is Matt Reustle. Today we are breaking down Live Oak Bank. Our guest is Stephen Vafier, the Founder of Storri Labs Capital Partners. Live Oak is a bank that received a charter right before the financial crisis. It does not have the a 100+ year histories of many of the banks that we know so well today, JP Morgan, Goldman Sachs, and the other too-big-to-fail banks.
This is a new story with very interesting DNA in terms of how they built up this bank. They targeted specific industries and the SBA loan program and they had technology in their inception. Live Oak has done some unique things to build assets on the balance sheet to build equity in this bank and really build a name within a sector that is incredibly difficult to break into. This is an interesting case study on how you can think about out-dated industries, which seemingly have massive barriers to entry. Please enjoy this breakdown of Live Oak Bank.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/patrick.
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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke
Show Notes
(00:02:16) - (First question) - The unique market opportunity that the founders saw when starting this business
(00:04:39) - How Live Oak differentiated its approach to make a more successful business model
(00:06:03) - How they approached the SBA loan program differently
(00:09:04) - The Live Oak sales strategy
(00:10:06) - Their strategy for trading partially guaranteed government-backed loans
(00:12:12) - Overcoming challenges to attract clients to specialized loans
(00:15:44) - A brief history of Chip Mahan’s career
(00:20:23) - Chip’s technology-centric approach without relying on physical locations
(00:22:49) - Traditional banking security with high-upside ventures, contrasting with neo banks
(00:27:51) - The balance between the traditional lending business and technology-focused ventures
(00:31:48) - How Live Oak intends to scale the business
(00:36:52) - How the surge in SBA programs during COVID impacted Live Oak
(00:40:02) - Handling the effects of the Silicon Valley Bank collapse
(00:42:32) - The strategy for deposit growth and how pivotal is it for the bank's competitiveness
(00:46:13) - How Live Oak navigates threats from entities employing similar strategies
(00:53:36) - The significance of Chip Mahan's role and his influence on the organization's future
(00:56:43) - Potential risks that Live Oak faces
(00:59:44) - Lessons learned from researching Live Oak
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This is Zack Fuss. Today we are breaking down Moody's Corporation. Moody's was founded by John Moody in 1909 with the idea of broadening access to credit information and codifying how people viewed credit statistics by producing manuals of stats related to bonds. In 2000, Moody's was spun off from Dun & Bradstreet as a separately traded public company. Today, it is nearly a $75 billion enterprise business, producing approximately $6 billion in revenue at 45 percent margins.
To break down Moody's, I'm joined by Brian Yacktman, the Founder and President of YCG Investments. During this conversation we explore the business's origin story, how the financial crisis impacted the trajectory of the business, and the role that credit ratings play in the broader investment ecosystem. Please enjoy this breakdown on Moody's.
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
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This episode is brought to you by Tegus, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/patrick.
-----
Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.
Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.
Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke
Show Notes
(00:02:30) - (First question) - Introducing Moody's and its operations
(00:05:13) - Analyzing Moody’s revenue structure
(00:06:13) - Highlighting Moody's business strengths
(00:07:40) - Discussing Moody’s business model transformation
(00:12:29) - Evaluating entry barriers in Moody’s field
(00:17:06) - Exploring the network effects within the company
(00:23:01) - Examining Moody’s profit margins
(00:26:26) - Comparing Moody’s to S&P Global
(00:28:08) - The impact of the financial crisis on Moody's
(00:29:46) - Assessing economic sensitivities affecting Moody's
(00:35:25) - Key takeaways from Moody’s business strategies
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