2023 Yearly Recap
Dear Subscribers,
Happy New Year! As we step into 2024, we want to express our gratitude for your support and for being a part of our incredible community throughout 2023. We hope that our research added value to your investment journey.
As we embark on a new year, let’s take a moment to reflect back on the new companies covered by our newsletter during 2023. Through our newsletter, we offer in-depth research on companies that align with our portfolio criteria, standing out as industry leaders. These companies boast wide moats and exhibit robust financials. For more details about StockOpine's Newsletter, visit the About Us page [About - StockOpine’s Newsletter].
Since our journey began in January 2022, we've dedicated substantial hours to research, and we're thrilled to share that our portfolio now consists of 22 carefully selected companies [last update: Q3 2023 Portfolio Update – 2023 update will be released by the end of January 2024]. It's important to note that not every company we cover makes it into our portfolio.
The past two years have been marked by a challenging economic landscape, with distressed valuations creating opportunities to invest in quality companies at prices we believed could deliver market beating returns. While the market has circled back to its 2022 starting point, presenting challenges in finding new opportunities, we're immensely proud of our achievements. StockOpine's portfolio has outperformed the market, delivering a noteworthy 23.6% return since inception in January 2022, compared to 11.1% by the S&P 500.
Without further ado, let's delve into the companies covered in 2023.
1) lululemon Athletica Inc. - It’s all about branding (January 2023)
Company: Lululemon Athletica Inc. (LULU)
Price at publication: $313
Price as of 29 December 2023: $511
Change: 63.3%
Lululemon Athletica Inc. is one of the key players in the athleisure space with best in class margins and high returns on capital. Its first mover advantage in the athleisure space, the quality of its products and its approach on reaching the customer directly and blending in/cultivating the community (rather than pure wholesaling), allows the Company to build strong relationships with guests and strengthen its brand positioning.
2) From Wood to Composite: Trex's Growth and Success in the Decking Industry (February 2023)
Company: Trex Company, Inc. (TREX)
Price at publication: $55.6
Price as of 29 December 2023: $82.8
Change: 48.9%
Trex Company, Inc. is the world’s largest manufacturer of composite decking and railing products. Trex has achieved impressive results and growth over the years. Its market share in the industry, its high profitability, and its disciplined growth strategy have been standout attributes.
3) Skyline Champion Corporation – A Compelling Investment Opportunity (February 2023)
Company: Skyline Champion Corporation (SKY)
Price at publication: $68.3
Price as of 29 December 2023: $74.3
Change: 8.8%
Skyline Champion Corporation offers manufactured and modular homes for the multi-family and hospitality sectors and is considered the second largest player in the industry. Despite the cyclicality of the industry, opportunities such as affordable housing, ease of regulations, and better financing options for buyers are some of the tailwinds surrounding the Company's growth potential.
4) Beyond the Ecommerce Behemoth: Examining Amazon's Diverse Business Ventures (March 2023)
Company: Amazon.com, Inc. (AMZN)
Price at publication: $93.6
Price as of 29 December 2023: $151.9
Change: 62.3%
Amazon needs no introduction as the leading player in e-commerce and cloud computing while its advertising business provides margin expansion opportunities. The Company boasts multiple competitive advantages including its first-mover advantage in cloud infrastructure, scale, and network effects.
5) Walmart Inc. – Harnessing the Power of Omnichannel Retailing (March 2023)
Company: Walmart Inc. (WMT)
Price at publication: $140.9
Price as of 29 December 2023: $157.7
Change: 11.9%
Walmart Inc. is the largest US retailer operating supercenters, supermarkets, hypermarkets, warehouse clubs, and ecommerce websites across the world. Walmart's competitive advantages are rooted in its scale and ability to provide low prices and convenience to customers. Its offerings in groceries, fuel, and health make it somewhat recession-proof, as demonstrated during the 2007-2009 period.
6) Simple, successful and sustainable - Ferguson plc (April 2023)
Company: Ferguson plc (FERG)
Price at publication: $125.2
Price as of 29 December 2023: $193.1
Change: 54.2%
Ferguson Plc is a leading value added distributor in North America providing solutions and products from infrastructure, plumbing and appliances to HVAC, fire, fabrication and more.
7) Riding the HVAC Industry tailwinds: An Investment Analysis of Watsco Inc. (April 2023)
Company: Watsco Inc (WSO)
Price at publication: $338.6
Price as of 29 December 2023: $428.5
Change: 26.6%
Watsco Inc is a leading distributor of air conditioning, heating and refrigeration equipment, related parts and supplies in North and Latin America. The company's management team has demonstrated excellence in navigating through economic cycles and executing on its growth strategy, which has positioned WSO as the largest HVAC/R distributor in the industry.
8) Cutting Through the Competition: Toro Company's Mow-tivating Journey (May 2023)
Company: The Toro Company (TTC)
Price at publication: $105.7
Price as of 29 December 2023: $96.0
Change: -9.2%
The Toro Company is a leading worldwide provider of outdoor equipment specializing in landscape maintenance, snow and ice management, underground utility construction, rental and specialty construction, and irrigation.
9) Carrier: The Path to Becoming a Global Climate Champion (May 2023)
Company: Carrier Global Corporation (CARR)
Price at publication: $41.3
Price as of 29 December 2023: $57.5
Change: 39.2%
Carrier Global Corporation is the leading manufacturer of heating, ventilation, air conditioning and refrigeration (HVAC/R) equipment. Carrier's substantial installed base, coupled with dynamic regulatory changes and the prospect of expanding aftermarket sales, positions the company for growth.
10) Diageo - A Taste of Success in the Beverage Industry (June 2023)
Company: Diageo plc (DGE.L)
Price at publication: £33.5
Price as of 29 December 2023: £28.6
Change: -14.6%
Diageo plc produces, markets, and sells alcoholic and non-alcoholic beverages. With a robust portfolio of over 200 brands, Diageo operates in 180+ countries, solidifying its status as one of the world's largest manufacturers of spirits and beer. Diageo’s diverse brand lineup, includes the world's bestselling Scotch whiskey, Johnnie Walker, the world’s bestselling cream liqueur, Baileys, the world’s best-selling premium distilled vodka, Smirnoff and other iconic brands such Tanqueray gin and Guinness beer.
11) FactSet - Unleashing the Power of Data (June 2023)
Company: FactSet Research Systems Inc. (FDS)
Price at publication: $394.0
Price as of 29 December 2023: $477.1
Change: 21.1%
FactSet Research Systems Inc is a global financial data and analytics company serving the global investment community. FactSet operates under a subscription-based model by providing financial data, analytics and workflow solutions.
12) Nasdaq Inc: A Diversified Financial Powerhouse (July 2023)
Company: Nasdaq, Inc. (NDAQ)
Price at publication: $51.1
Price as of 29 December 2023: $58.1
Change: 13.7%
Nasdaq Inc. is the leading exchange operator in the US and Nordics. With diversified revenue streams and access to substantial addressable markets, the company stands as a key player in the financial industry.
13) Allegion: Turning Keys, Unlocking Future (August 2023)
Company: Allegion plc (ALLE)
Price at publication: $107.4
Price as of 29 December 2023: $126.7
Change: 18.0%
Allegion plc is a leading provider of security solutions for residential and commercial sectors, offering a wide range of products, including door controls, access control systems, locks, locksets, and electronic security products. The company is well-positioned to capitalize on the increasing adoption of electronic solutions and the growing awareness of security needs.
14) Reckitt: Brands, Transformation and Future Potential (September 2023)
Company: Reckitt Benckiser Group plc (RKT.L)
Price at publication: £57.9
Price as of 29 December 2023: £54.2
Change: -6.4%
Reckitt Benckiser Group plc is a global consumer goods company that specializes in the sale of health, hygiene, and nutrition products. Reckitt boasts a diverse brand portfolio, featuring some of the most trusted and recognizable names worldwide which include among others, Lysol, Vanish, Harpic, Finish, Air Wick, Dettol, Nurofen, Strepsils, Durex, and Enfamil.
15) Nemetschek's Transition to a Subscription-Based Model (October 2023)
Company: Nemetschek SE (NEM.DE)
Price at publication: €67.7
Price as of 29 December 2023: €78.5
Change: 16.0%
Nemetschek SE is a leading provider of software solutions in Architecture, Engineering, Construction and Building operations industry (AEC/O). Nemetschek's key competitive advantage lies in the high switching costs associated with its Design segment, granting the company significant pricing power. Numerous opportunities stand to benefit the company, including the rising adoption of BIM and the imposition of regulatory mandates.
16) Dissecting LVMH's Dynamic Presence in Luxury (November 2023)
Company: LVMH Moët Hennessy - Louis Vuitton (MC.PA)
Price at publication: €704.1
Price as of 29 December 2023: €733.6
Change: 4.2%
LVMH Moët Hennessy - Louis Vuitton is the leading French conglomerate specializing in luxury goods. LVMH stands as an indisputable leader in the luxury goods market, with an indomitable brand presence encompassing iconic names such as Louis Vuitton, Dior, and Tiffany.
17) Unveiling Estee Lauder: Performance, Challenges, and Future Prospects (December 2023)
Company: The Estée Lauder Companies Inc. (EL)
Price at publication: $145.7
Price as of 29 December 2023: $146.3
Change: 0.0%
The Estée Lauder Companies Inc. stands as a prominent player in the prestige beauty sector, offering a diverse range of Skin Care, Makeup, Fragrance, and Hair Care products. Estée Lauder Companies’ extensive distribution network positions the company as a key player, granting it scale advantages and the ability to swiftly introduce new brands to market.
In addition to our thorough analysis of new companies, throughout 2023, we reassessed the thesis and valuation of six existing portfolio companies. You can find the list of articles below.
Decoding PayPal's Figures: Valuation and Growth Analysis (July 2023)
Zoom: Assessment of Enterprise, Competition, and Valuation (August 2023)
Alphabet: Unveiling YouTube and Cloud Services (October 2023)
Evaluating the Strengths and Challenges of POOL Corporation (November 2023)
Evolution AB: Challenges, Regulations, and Market Dynamics (December 2023)
Thank you for being a subscriber, and here's to a successful 2024 ahead!