Growth Stock Thoughts

An Investment in Knowledge Pays the Best Interest

Benjamin Franklin

Generac Generates Significant Opportunity with Acquisitions

• Increasing demand for uninterrupted power in the industrial space due to data requirements and increase in consumer demand due to the above-average outage hours the US has experienced over the last 3 years.
• 10GWh of currently installed capacity, with addressable market set to expand by 5x by FY25.
• Aggressive M&A to penetrate new markets, with each 100 basis point increase in penetration equating to $3 billion in total addressable market.
• Strong international growth should offset weakness in US domestic consumer market.

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ALB: Doubling In Size Inside a Decade

• Second largest Lithium producer in the world.
• 3 Expansion opportunities within the next decade, expecting global lithium demand to surge by 275% by 2030.
• Favorable pricing above $20/kg has made >100 locations viable for expansion.
• Global focus on electrification creating surge in demand for Lithium.

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ONSemi Sweet Spot for High Growth with Fab-Light Model

• Double Digit Secular Grower with Reasonable Valuation
• $16.6 billion in backlog, with $2.5 added in 4Q22.
• Divesting from low-margin industries and fabs, trading top line revenue for investing in high-margin products in markets with less competition.
• SiC (silicon carbide) leader, producing higher margin wafers in fewer facilities.
• Repurchasing $3 billion in shares to FY25, with $698 million in 1Q23. Targeting 50% FCF return to shareholders.

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Video: Bloom Energy’s BE Growth Blooms with IRA. Profitable Hypergrowth is Possible.

• IRA (Inflation Reduction Act) should accelerate growth for fuel cells.
• Hypergrowth sector, 2050 neutrality targets, and 2030 reduction targets are approaching fast.
• $10 billion in total backlog, $2.8 in new product backlog.
• First commercialization in carbon capture, expanding hydrogen cells and electrolyzation to Europe. Large expansion in the maritime segment, first successful deployment of a Bloom energy cell on a vessel.
• IRA tax credits significantly incentivize new installations and expand existing modules. Offering $3/kg of hydrogen produced over the electrolyzer’s or fuel cell’s lifetime.

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Baidu: Major Potential For China’s Tech Titan

• Strong leadership positions in numerous hypergrowth sectors will drive strong growth expected into 2030.
• Apollo Go self-driving taxis are chartered in several major Chinese cities.
• Macroeconomic recovery in China, the zero COVID policy ended with lots of pent-up demand from consumers and advertisers. Baidu is a leader in search in China.
• Expecting tailwinds in advertising space, as firms shift from cost-saving measures to returning to expansion.

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Video: Mobileye MBLY SuperVision Provides Future Growth Avenue. 35% CAGR Revenues and EPS.

• Leader in driver assisted and autonomous driving vehicle technology.
• Strong growth in advanced driver assistance systems, despite making up under 1% of volume, SuperVision makes up 33% of revenue growth.
• $17 billion in contracted sales cumulatively through 2030, with an average system price of $105 expected compared to the current $56.2.
• Robust real-world implementation of SuperVision, with 96,000 units deployed in FY22. Expecting over 100% growth in units shipped for FY23.
• Backed by strong consumer demand for more safety features and more fatigue-reducing driver features.

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Bloom Energy’s Growth Blooms with IRA

• IRA (Inflation Reduction Act) should accelerate growth for fuel cells.
• Hypergrowth sector, 2050 neutrality targets, and 2030 reduction targets are approaching fast.
• $10 billion in total backlog, $2.8 in new product backlog.
• First commercialization in carbon capture, expanding hydrogen cells and electrolyzation to Europe. Large expansion in the maritime segment, first successful deployment of a Bloom energy cell on a vessel.
• IRA tax credits significantly incentivize new installations and expand existing modules. Offering $3/kg of hydrogen produced over the electrolyzer’s or fuel cell’s lifetime.

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Fiserv: Deep Value Through Dominance In Payments

Fiserv (NASDAQ:FISV) is a financial technology firm specializing in payment processing. Through aggressive M&A, Fiserv hopes to establish a competitive advantage through advanced platform features. Fiserv has consistently outperformed its own estimates and has successfully leveraged several M&A actions in FY22 to gain a foothold globally. These merger actions have already realized $700 million in additional revenue due to acquisitions, 2 years ahead of schedule.

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Taiwan Semiconductor Dominates Leading Edge

• Semiconductor market is expected to double in size by 2030. TSM (Taiwan Semiconductor Manufacturing) accounts for 26% of the world’s semiconductor output.
• Largest pure play fabricator, strength comes from long-term relationships.
• Scale and leading-edge technology as one of the only sub 7nm wafer technology manufacturers in the world.
• International expansion slotted in Japanese and American markets driven by a $100 billion CapEx (Capital Expenditure) expansion.
• Western governments want to distance domestic technology products from China and bring manufacturing back to their countries or local allies.
• The US CHIPS and Science Act provides roughly $280 billion in new funding to boost domestic research and manufacturing of semiconductors in the United States.

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SuperVision Provides Future Vision for Mobileye

• Strong growth in advanced driver assistance systems, despite making up under 1% of volume, SuperVision makes up 33% of revenue growth.
• $17 billion in contracted sales cumulatively through 2030, with an average system price of $105 expected compared to the current $56.2.
• Robust real-world implementation of SuperVision, with 96,000 units deployed in FY22. Expecting >100% growth in units shipped for FY23.
• Backed by strong consumer demand for more safety features and more fatigue-reducing driver features.

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Video: Global Payments (GPN) Unloved and Undervalued. Strong Growth and Low Valuation. Best of Both Worlds

• Strong Auto Brands include Chrysler, Jeep, Dodge, Peugeot, Fiat.
• 7.7% Dividend Yield is the highest among peers.
• Compelling valuation with a 4.3x P/E compared to sector median of 15.0x.
• 2030 Strategic plan emphasizes global EV (Electrical Vehicles) capacity huge global base to pull from.
• Realizing consumer gains from IRA (Inflation Reduction Act) in North America, focusing on larger utility vehicles in the United States.

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3.25% Yield and Healthcare Repositioning for CVS Health

• 3.25% dividend yield, strong free cash generation.
• Oak Street acquisition projected to add $2 billion in EBITDA by 2026.
• Expects significant volume growth at pharmacies with the introduction of several biosimilar and generic drugs in FY23.
• Modest FY23 guidance targeting 7% EPS growth despite some sustained headwinds in retail.

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