MPWR

Monolithic Power System

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-$120.68 -24.90%
Josh Kohn-Lindquist's avatar
$24.3m follower assets
Monolithic Power Systems $MPWR
I tend to fall in love with new (to me) stocks too quickly.

Today's episode of this unfortunate truth brings you Monolithic Power Systems $MPWR.

It looks like a fascinating -- and vital -- component of the broader semiconductor market, with some incredible historical figures.

Labeled as a semiconductor-based power electronics solutions business, its technical operations are well above my pay grade, but it looks wildly investable.

Also, its total return is over 2,000% in the last 10 years.

Here is its tear sheet from ROIC.AI:

I might have to remember this one for any potential future competitions on here, but I need to do a lot more digging on it first.

Almost always priced at a premium but sold off as of late.

Key stats:
  • 5-year revenue CAGR 27%
  • 5-year EPS CAGR 34%
  • Profit margin 18% and FCF margin of 14%
  • ROE of 18% and ROIC of 12%
  • 0.8% dividend with a payout ratio of 27%
  • 5-year dividend growth rate of 28%
  • 37x TTM earnings and 29x forward earnings
  • 5-year average P/E was 52

Does anybody follow this relatively new S&P 500 member?

Would love to hear what you all think or know about it. 🙏
Are you comfortable investing in stock even if you have trouble understanding its underlying operations?
7%Absolutely
38%"Comfortable?" No. Still will.
38%No way
15%Only w/ pristine financials.
13 VotesPoll ended on: 09/30/22
This has kept me out of data analytics and cybersecurity stocks recently. And not that I don’t understand the basic concept of either. I know they are important. But I don’t know enough about either field to know when their version will become obsolete.
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Josh Kohn-Lindquist's avatar
$24.3m follower assets
10/10/10 Screener
I ran a screener for fun on my Dividends 500 portfolio, trying to find "undeniable" types of stocks for fighting the market's weirdness right now.

A stock needs to have three things to make it into Dividends 500:
  • be an S&P 500 member (mainly to keep the size of the portfolio under control for me)
  • an increasing dividend YoY
  • a payout ratio below 50%

Using this group of roughly 200 stocks, I added another filter for the following:
  • 10%+ revenue growth YoY -- both forward and trailing
  • 10%+ net income and free cash flow (FCF) margin
  • 10%+ return on equity (ROE) and return on invested capital (ROIC)

I chose to use net income margin and FCF margin to avoid getting pencil whipped by stocks boosting FCF through stock-based compensation. If a company's ROE was negative from share buybacks, I looked to ROIC to see if they qualified.

Here is the list of what remained:

It increased my interest in Hershey and Waste Management as steady-Eddie picks as they might be the safest on this list. I also lined up KLAC, ACN, MPWR, MSCI, and FDS for more research, as it feels like I keep seeing their names everywhere.

Did any of these stocks surprise you or stand out in any way?
Would a basket of these 10/10/10 stocks beat the S&P 500 over the next decade?
57%Yes
7%No
35%Maybe, needs one more metric
14 VotesPoll ended on: 09/27/22
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Dylan Patel's avatar
$102.8m follower assets
Monolithic Power Systems Q2 Earnings Is Wild
Their inventory keeps soaring though...
Q2 EPS $3.25 ex-items vs FactSet $2.94 [11 est, $2.91-3.01] (462.3)
Reports Q2:
Revenue $461.0M vs FactSet $430.6M [11 est, $429.5-435M]
Q3 Guidance:
Revenue $480-500M vs FactSet $458.0M [11 est, $435-478M]
Non-GAAP gross margin between 58.7% and 59.3%, which excludes an estimated impact of stock-based compensation expenses of 0.3%.
Non-GAAP R&D and SG&A expenses between $94.7M and $96.7M, which excludes estimated stock-based compensation expenses in the range of $41.5M to $43.5M.

Senator Tommy Tuberville apparently owns Monolithic Power Systems. @sentuberville

I clicked on the $MPWR cash tag in your post and then "searched investors" and he popped up.

Fun fact, Tommy Tuberville was the head football coach at Auburn University from 1999 to 2008... and of course then the good people of Alabama elected him to be their senator.

I'm sure he knows a lot about power solutions found in industrial applications $MPWR 🥲

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