Episodes

  • Going Activist in Japan - [Business Breakdowns, EP.185]

    Going Activist in Japan - [Business Breakdowns, EP.185]
    Oct 2 2024
    Today, we are covering what might be the most interesting investment strategy I've come across in a long time: activism in Japan. In this episode, I talk with Masumi Nishida, Partner and Managing Director for Dalton's Tokyo research office. As part of this intro, I brought on the catalyst for this episode, Nick Bartolo, founder and Managing Partner of Essential Partners. The conversation delves into the opportunities for activism in the Japanese market, highlighting the historically low valuations of Japanese equities and the cultural dynamics contributing to this scenario. We discuss corporate governance reforms and the Tokyo Stock Exchange's role in improving market efficiency and shareholder value. And, Masumi highlights several case studies that illustrate successful activist strategies, including promoting management buyouts and enhancing capital allocation. Please enjoy this unique Breakdown on Japan activism. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Tegus, where we're changing the game in investment research. Step away from outdated, inefficient methods and into the future with our platform, proudly hosting over 100,000 transcripts – with over 25,000 transcripts added just this year alone. Our platform grows eight times faster and adds twice as much monthly content as our competitors, putting us at the forefront of the industry. Plus, with 75% of private market transcripts available exclusively on Tegus, we offer insights you simply can't find elsewhere. See the difference a vast, quality-driven transcript library makes. Unlock your free trial at tegus.com/patrick. --- This episode is brought to you by Public: Invest in stocks, bonds, options, crypto, and more in one place. A Bond Account is a self-directed brokerage account with Public Investing, member FINRA/SIPC. Deposits into this account are used to purchase 10 investment-grade and high-yield bonds. The [6.7%] yield is the average annualized yield to maturity (YTM) across all ten bonds in the Bond Account, before fees, as of [9/05/2024]. A bond’s yield is a function of its market price, which can fluctuate; therefore a bond’s YTM is “locked in” when the bond is purchased. Your yield at time of purchase may be different from the yield shown here. The “locked in” YTM is not guaranteed; you may receive less than the YTM of the bonds in the Bond Account if you sell any of the bonds before maturity, or if the issuer calls or defaults on the bond. Public Investing charges a markup on each bond trade. See our Fee Schedule. Bond Accounts are not recommendations of individual bonds or default allocations. The bonds in the Bond Account have not been selected based on your needs or risk profile. You should evaluate each bond before investing in a Bond Account. The bonds in your Bond Account will not be rebalanced and allocations will not be updated, except for Corporate Actions. ----- 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 (00:00:40) Understanding Japan's Market Valuation (00:02:08) Cultural Dynamics and Cash Reserves (00:03:47) Financial Literacy and Balance Sheet Optimization (00:08:27) Corporate Governance and TSE Reform (00:13:12) Challenges of Cross Shareholdings (00:18:24) Opportunities in Small to Mid Cap Companies (00:21:31) Activism Strategies and Proposals (00:26:51) Bellpost's Strategic Moves and Initial Proposals (00:27:24) Challenges with Shareholder Support in Japan (00:29:11) Management Buyouts and Capital Allocation (00:30:33) Case Study: Ihara Science's Path to Privatization (00:31:43) Financing Dynamics in Japanese MBOs (00:34:48) Case Study: Mitsuboshi Belting's Shareholder Proposals (00:40:35) Case Study: Ihara Science's MBO Success (00:45:55) Current Market Dynamics and Future Outlook
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    1 hr
  • RTW: Investing across Healthcare - [Business Breakdowns, EP.184]

    RTW: Investing across Healthcare - [Business Breakdowns, EP.184]
    Sep 27 2024
    Today we are breaking down healthcare, one of the most impactful sectors in the world, yet one of the most unique for investors. My guests are Rod Wong, founder and CIO of RTW Investments, and Stephanie Sirota, chief business officer of RTW Investments. RTW was founded in 2009 and operates a sector-specific strategy in healthcare. We discuss the evolution of their model, which feels particularly important given how much it aligns with the healthcare investment process. We cover the various phases of drug investments, the unique dynamics of founders and team building, and we get into some of the more philosophical discussions around regulation in the industry. Please enjoy this breakdown on healthcare. Editor-in-Chief application here. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Ridgeline. Ridgeline has built a complete, real-time, modern operating system for investment managers. It handles trading, portfolio management, compliance, customer reporting, and much more through an all-in-one real-time cloud platform. I think this platform will become the standard for investment managers, and if you run an investing firm, I highly recommend you find time to speak with them. Head to ridgelineapps.com to learn more about the platform. --- This episode is brought to you by Public: Invest in stocks, bonds, options, crypto, and more in one place. A Bond Account is a self-directed brokerage account with Public Investing, member FINRA/SIPC. Deposits into this account are used to purchase 10 investment-grade and high-yield bonds. The [6.7%] yield is the average annualized yield to maturity (YTM) across all ten bonds in the Bond Account, before fees, as of [9/05/2024]. A bond’s yield is a function of its market price, which can fluctuate; therefore a bond’s YTM is “locked in” when the bond is purchased. Your yield at time of purchase may be different from the yield shown here. The “locked in” YTM is not guaranteed; you may receive less than the YTM of the bonds in the Bond Account if you sell any of the bonds before maturity, or if the issuer calls or defaults on the bond. Public Investing charges a markup on each bond trade. See our Fee Schedule. Bond Accounts are not recommendations of individual bonds or default allocations. The bonds in the Bond Account have not been selected based on your needs or risk profile. You should evaluate each bond before investing in a Bond Account. The bonds in your Bond Account will not be rebalanced and allocations will not be updated, except for Corporate Actions. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. 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 (00:07:50) Phases of Healthcare Product Lifecycle (00:09:03) Challenges and Opportunities in Biotech (00:14:01) Investment Strategies in Healthcare (00:16:47) The Evolution of RTW and Team Structure (00:20:11) Public and Private Market Dynamics (00:26:24) Gene Therapy: A Case Study (00:33:08) Future of Healthcare Innovation (00:46:11) Global Biotech Landscape: US Dominance and International Opportunities (00:48:29) Big Pharma Winners and Losers: A Decade in Review (00:51:11) Impact of the Inflation Reduction Act (IRA) on Drug Development (00:54:55) Regulatory Changes and Their Impact on Innovation (01:10:08) M&A in Biotech: A Critical Component for Success (01:15:57) GLP-1 Drugs: Market Impact and Future Prospects (01:20:38) Current Biotech Market: Opportunities and Future Outlook
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    1 hr and 7 mins
  • Sherwin-Williams: Brushstrokes of Success - [Business Breakdowns, EP.183]

    Sherwin-Williams: Brushstrokes of Success - [Business Breakdowns, EP.183]
    Sep 18 2024
    Today we are breaking down the paint giant Sherwin-Williams. Founded in 1866, Sherwin Williams is a great example of a company where everyday consumers might not appreciate just how great of a business and stock this has been. Over the last 20 years, Sherwin has compounded earnings at 14% per year. And over those 20 years, the stock has returned 26x your investment. And that's compared to the S&P at 5x your investment. This has been an incredible quiet compounder. My guest today is Todd Basnight, director of equity research at Aureus Asset Management. We discuss the business’s vertically integrated model, the focus on a particular customer base, a management team that's been thoughtful about capital allocation, and some of its big deals historically. Please enjoy this Breakdown on Sherwin-Williams. Business Breakdowns on AutoZone. Register for the Business Breakdowns x Founders Conference. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Ridgeline. Ridgeline has built a complete, real-time, modern operating system for investment managers. It handles trading, portfolio management, compliance, customer reporting, and much more through an all-in-one real-time cloud platform. I think this platform will become the standard for investment managers, and if you run an investing firm, I highly recommend you find time to speak with them. Head to ridgelineapps.com to learn more about the platform. --- This episode is brought to you by Public: Invest in stocks, bonds, options, crypto, and more in one place. 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 https://public.com/businessbreakdowns. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. 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 (00:04:36) Sherwin Williams' Business Model and History (00:08:46) The Paint Stores Group: Sherwin Williams' Crown Jewel (00:14:37) Professional Painters vs. DIY: Market Dynamics (00:19:43) Sherwin Williams' Controlled Distribution Model (00:28:24) The Valspar Acquisition and Consumer Brands (00:32:52) Exploring the Industrial Coatings Market (00:36:43) Sherwin's Performance in the Automotive Market (00:38:03) Sherwin's Growth and Market Share (00:39:32) Financial Overview and Store Economics (00:41:17) Sherwin's Competitive Edge and Market Dynamics (00:50:59) Capital Intensity and Free Cash Flow (01:00:00) Risks and Management Changes (01:04:24) Lessons from Sherwin-Williams
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    1 hr and 4 mins
  • Rakuten: Rewiring Japan's Digital Economy - [Business Breakdowns, EP.182]

    Rakuten: Rewiring Japan's Digital Economy - [Business Breakdowns, EP.182]
    Sep 11 2024
    Today, we are breaking down the Japanese internet conglomerate Rakuten. I'm joined by Matt Brett, the lead manager of the Japan Trust at Baillie Gifford, which has continuously invested in Rakuten since 2005. Rakuten is the unique Japanese conglomerate that wasn't started over a hundred years ago and instead was part of the late nineties global internet boom. Matt helps explain what was different about that internet boom in Japan and how Rakuten was really shaped by it. We get into the various business lines, from traditional e-commerce to the credit card business, and more, but notably how the loyalty point system has become the glue connecting everything together. We also cover Rakuten's major investment into the mobile phone market, and Matt gives a very intellectually honest look at why this is such a huge debate for Rakuten, investors, and anybody looking at the name. Please enjoy this breakdown of Rakuten. Check out our new show, Glue Guys! Register for the Business Breakdowns x Founders Conference. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Tegus, where we're changing the game in investment research. Step away from outdated, inefficient methods and into the future with our platform, proudly hosting over 100,000 transcripts – with over 25,000 transcripts added just this year alone. Our platform grows eight times faster and adds twice as much monthly content as our competitors, putting us at the forefront of the industry. Plus, with 75% of private market transcripts available exclusively on Tegus, we offer insights you simply can't find elsewhere. See the difference a vast, quality-driven transcript library makes. Unlock your free trial at tegus.com/patrick. --- This episode is brought to you by Public: Invest in stocks, bonds, options, crypto, and more in one place. 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 https://public.com/businessbreakdowns. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. 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 (00:04:52) Overview of Rakuten (00:06:15) Rakuten's Business Model and History (00:13:32) Expansion and Challenges (00:15:36) Challenges and Lessons from Overseas Expansion (00:18:47) Cultural and Market Differences in Digitalization (00:20:30) E-commerce Penetration and Future Trends (00:22:18) Competitive Advantages in Japan's Market (00:25:27) Rakuten's Mobile Network Ambitions (00:30:36) Financials and Market Position (00:37:24) Future Prospects and Risks (00:39:10) Rakuten's E-commerce and Finance Growth (00:40:07) Mobile Network Expansion and Challenges (00:41:05) Customer Acquisition Strategies (00:43:26) Comparing Rakuten to Competitors (00:48:15) Financial Performance and Margins (00:50:39) Capital Allocation and Long-term Strategy (00:53:13) Risks and Future Potential (00:56:17) Lessons from Rakuten
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    55 mins
  • Renishaw: The Precision Pioneers - [Business Breakdowns, EP.181]

    Renishaw: The Precision Pioneers - [Business Breakdowns, EP.181]
    Sep 4 2024
    Today, we are breaking down Renishaw, a leading supplier of measuring and manufacturing systems, specifically focused on accuracy and precision. What does that mean in layman's terms? Renishaw is a picks and shovels provider to many of the fastest-growing end markets in the world. The company designs and develops systems for anything revolving around semiconductors, robotics, and medical devices. To break down Renishaw, I'm joined by Matt Tonge, fund manager at Liontrust Asset Management. Matt helps simplify this business, describing both the customer base and exactly what is going on with these precision tools. We get into some of its unique dynamics of revenue and R&D and what the opportunity set is for a business like Renishaw. Please enjoy this business breakdown of Renishaw. Register for the Business Breakdowns x Founders Conference. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Tegus, where we're changing the game in investment research. Step away from outdated, inefficient methods and into the future with our platform, proudly hosting over 100,000 transcripts – with over 25,000 transcripts added just this year alone. Our platform grows eight times faster and adds twice as much monthly content as our competitors, putting us at the forefront of the industry. Plus, with 75% of private market transcripts available exclusively on Tegus, we offer insights you simply can't find elsewhere. See the difference a vast, quality-driven transcript library makes. Unlock your free trial at tegus.com/patrick. --- This episode is brought to you by Public: Invest in stocks, bonds, options, crypto, and more in one place. 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 https://public.com/businessbreakdowns. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. 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 (00:04:52) Overview of Renishaw (00:06:53) Renishaw's Market and Products (00:13:09) Revenue Dynamics and Market Cycles (00:18:02) Renishaw's Origin Story (00:22:56) Competitors and Market Position (00:24:49) Financial Performance and Investment (00:32:10) Product Range and Standardization (00:34:21) Challenges in Additive Manufacturing (00:36:03) Customer Stickiness and Market Presence (00:41:39) Investment and Long-Term Strategy (00:49:16) Lessons from Breaking Down Renishaw
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    50 mins
  • 3i Group: Capital in Action - [Business Breakdowns, EP.180]

    3i Group: Capital in Action - [Business Breakdowns, EP.180]
    Aug 28 2024
    Today we are breaking down the publicly traded investment company 3i. You may think if you've seen one publicly traded investment vehicle, you've seen them all. Yet, 3i is an investment vehicle where one business, Dutch retailer, Action, represents well north of 50% of their net asset value. Our guest to break down 3i is Luke Bridgeman, a partner and portfolio manager at Hosking Partners. Luke shares the unique origin story of 3i, which dates back to pre-World War II in England. He takes us up through the present day, where longtime investment banker Simon Burrows has taken 3i and completely reshaped the asset management business into something that looks completely different. Please enjoy this breakdown of 3i. Register for the Business Breakdowns x Founders Conference. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Tegus, where we're changing the game in investment research. Step away from outdated, inefficient methods and into the future with our platform, proudly hosting over 100,000 transcripts – with over 25,000 transcripts added just this year alone. Our platform grows eight times faster and adds twice as much monthly content as our competitors, putting us at the forefront of the industry. Plus, with 75% of private market transcripts available exclusively on Tegus, we offer insights you simply can't find elsewhere. See the difference a vast, quality-driven transcript library makes. Unlock your free trial at tegus.com/patrick. --- This episode is brought to you by Public: Invest in stocks, bonds, options, crypto, and more in one place. 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 https://public.com/businessbreakdowns. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. 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) The Origin Story of 3i (00:06:30) 3i's Evolution and Strategic Shifts (00:07:12) The Impact of the 2008 Financial Crisis (00:08:20) Simon Burrows' Leadership and Strategic Changes (00:14:25) Focus on Action: 3i's Key Investment (00:25:23) 3i's Investment Strategy and Future Prospects (00:29:41) Valuation and Market Position of 3i (00:34:27) Key Risks and Management Insights (00:37:16) Lessons Learned from Breaking Down 3i
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    39 mins
  • 5 Handpicked Highlights - [Business Breakdowns, EP.179]

    5 Handpicked Highlights - [Business Breakdowns, EP.179]
    Aug 21 2024
    This is Matt Reustle. We're coming up on 200 episodes of Business Breakdowns, and one of the best things about hosting this show is that while each episode brings something completely different, you start to see the connective tissue that ties businesses together. We're often asked, "What's your favorite episode?" I certainly have favorites, but there are ideas that emerge from episodes that really stand out to me. In this episode, you'll hear several audio clips from past Breakdowns that we think stand out, and we'll share some of the context around them, why we think they're interesting, and bring the ideas to life. Please enjoy this mash-up of Business Breakdowns. Register for the Business Breakdowns x Founders Conference. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- Tegus, where we're changing the game in investment research. Step away from outdated, inefficient methods and into the future with our platform, proudly hosting over 100,000 transcripts – with over 25,000 transcripts added just this year alone. Our platform grows eight times faster and adds twice as much monthly content as our competitors, putting us at the forefront of the industry. See the difference a vast, quality-driven transcript library makes. Unlock your free trial at tegus.com/patrick. — This episode is brought to you by Public: Invest in stocks, bonds, options, crypto, and more in one place. 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. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. 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) Analyzing End Markets (00:04:58) L’Oreal Breakdown: Low Barriers to Entry, High Barriers to Scale (00:10:08) AMETEK: Small, Low Growth Markets (00:14:06) Vulcan Materials: Geographic Nuance (00:16:47) ASML: Technological Collaboration (00:21:05) Dolby: The Power of Patents
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    23 mins
  • Graco: Mastering The Flow - [Business Breakdowns, EP.178]

    Graco: Mastering The Flow - [Business Breakdowns, EP.178]
    Aug 14 2024
    This is Jesse Pujji. Today, we're breaking down Graco, a leading manufacturer of fluid handling equipment and industrial products. Graco was founded in 1926 and has become a global leader in the design and manufacturing of systems and components used to move, measure, control, dispense, and spray a wide variety of fluids and powders. If you've ever used a paint sprayer, you might be familiar with Graco's products, but Graco's equipment is used for much more than just household tasks. Its fluid handling systems glue the soles on shoes, pump ink onto bills, lubricate heavy machinery, and even coat Doritos with flavored powders. To break down this $13 billion dollar business, I'm joined by Aaron Wasserman, Managing Partner at Third Period Capital. We discuss Graco's market position, its huge range of SKUs, and what the future might hold. Please enjoy this Breakdown of Graco. Register for the Business Breakdowns x Founders Conference. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Ridgeline. Ridgeline has built a complete, real-time, modern operating system for investment managers. It handles trading, portfolio management, compliance, customer reporting, and much more through an all-in-one real-time cloud platform. I think this platform will become the standard for investment managers, and if you run an investing firm, I highly recommend you find time to speak with them. Head to ridgelineapps.com to learn more about the platform. — This episode is brought to you by Public: Invest in stocks, bonds, options, crypto, and more in one place. 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. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com). Disclaimer: This podcast does not constitute an offer or solicitation to buy any securities, investment products, or investment advisory services managed by Aaron L. Wasserman or Third Period Capital. Any such offer or solicitation will be made only at the time a qualified offeree receives a private placement memorandum describing the offering and only in those jurisdictions where permitted by law. Show Notes (00:00:00) Introduction to Business Breakdowns (00:04:00) Introduction to the Episode (00:04:52) First Question - Overview of Graco (00:05:40) Graco's Market and Products (00:06:57) Customer Segments and Sales Strategy (00:09:29) Financial Performance and Growth (00:11:08) Historical Milestones and Leadership (00:14:34) Competitive Landscape and Differentiators (00:23:40) Acquisitions and Future Opportunities (00:26:31) Financial Efficiency and Capital Allocation (00:28:10) Product Development and Cost Management (00:28:53) Company Culture and Productivity (00:30:44) Customer Relationships and ROI (00:40:05) Risks and Challenges (00:43:45) Lessons for Investors and Operators
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    43 mins