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Jared Leary - Hourglass
$585.5k follower assets
Author of the Hourglass Investing series - providing deep-dive research for the self-directed investor. Articles provide insight into management, valuation, company history, business models, and much more, plus podcasts & newsletters!
22 following40 followers
Dentalcorp Research Article
Just published my latest research article on dentalcorp - $DNTL.TO, a Canadian consolidator in a fragmented dental industry that's made up of 93% private practices. With 535 practices under the dentalcorp network, dentalcorp is larger than its top 2-5 competitors combined and has a further 8-10K more practices that meet the criteria for acquisition.

The growth potential for dentalcorp's business model is huge relative to dentalcorp's $1.1bn (CAD) in revenues. Operating in a $20bn, recession resistant healthcare sector, this name is mixing high-growth into a defensive name.

Concerns over its leveraged growth strategy has dentalcorp trading at 0.75x TTM revenues, a FCF yield of 5.9%, and 8.7x PF EBITDA, all well below the company's historical averages. Dentalcorp has the opportunity to grow either through a re-rate to its averages, and/or through continuing to execute on the acquisitive flywheel at the core of their business model.

Check out the rest of the deep dive here.
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XPEL Downturn
For anyone curious about whether the recent drop in $XPEL is a good buying opportunity, I just released my deep dive into the company.

I dive into the business model, balance sheet, competitive advantages, industry, management team, and investment potential on my way to deciding whether I was more of less interested in buying shares of $XPEL today.

Check out the article here.
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Episode XIV: SupremeX - A Peep into My Portfolio
Canadian, a microcap, operating in a dying envelope industry, and coming off a rough quarter.

It may sound unattractive, but there's a lot to like about SupremeX.

In this episode I get into:

Business Model
How SupremeX is pivoting to stay relevant and continue growing in the long-term
& Why I think the most recent quarter's selloff may provide an opportunity for investors.

Check out the episode here.

And also be sure to check out the SupremeX deep dive article here if the episode piques your interest!

SupremeX - a Peter Lynch Special
A fun (boring) little (tiny) microcap deep dive here into SupremeX - $SXP - leading North American player growing revs >24% YoY in a dying and fragmented envelope industry - leveraging the cash flows and expertise in envelopes to pivot towards a growthier packaging market while continuing to consolidate envelope market through acquistion.

$113m market cap
0.4x P/S
23% FCF Yield
PEG Ratio: 0.5

Potentially a lot of value to be found in an unloved Canadian microcap coming off a bad quarter - but potentially a lot of risk as well. Check out my read up on the company, business model, management team, industry, + the balance sheet and investment opportunity.

This is awesome! Thanks for the work.
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The Tenth Newsletter!
I didn't even really think about it as I was publishing, but I just realized I sent out my tenth weekly newsletter! Not a huge milestone for sure, but a nice moment to pause and think about everything I've learned and the amazing connections I've made over the last 10 weeks through my weekly newsletters.

Feeling immensely grateful for having taken the leap and starting to post my thoughts online - already I've become a better and more thorough & thoughtful investor, as well as a much more efficient writer.

Many more to come! My tenth newsletter was also the first monthly issue - recapping all the weekly newsletter throughout September, which I will aim to do in the last week of every month from now on. Inside are all the weekly watchlist stocks, recommended reads, investing tidbits, and investor spotlights from September's newsletters, all succinctly bundled up into one quick package. Check it out!

Aritzia - Turnaround or Value Trap?
Turn around stories are always the most exciting investment opportunities!

Anyone can follow the crowd, buying and selling alongside the Wall St. analysts.

It's much more difficult to take a contradictory stance, to do the homework and dig deeper into a business to see what others aren't, and ultimately to buy while others are selling.

It's difficult, but it can also be immensely rewarding for investors that get these turnaround stories right - look at Meta; from peak to trough, this business underwent a 270% righting of the ship, rewarding shareholders that were able to see past the crowd's expectations while it was at it.

I had a lot of fun analyzing Meta during that time. On the surface, it was easy to understand why everyone was selling. But digging deeper, doing the math, and objectively assessing the fair value revealed an entirely different story.

Now I'm setting out to try it again. Aritzia, one of Canada's largest female fashion retailers and a true homegrown success story, has struggled mightily with rising rates and a tougher macro-economic environment. Shares have taken a more than 140% drop from their peaks to today's value.

This has the company sitting at what could be a very appealing valuation and potential entry point for investors. But is it a value trap? Indicative of harder times ahead for the company? Or is the long-term thesis on this steady winner still intact, despite some hard times?

That's what I'm going to find out. Aritzia drops its earnings report on Thursday, Sept. 28. I'll be dropping my deep dive into the business TOMORROW! so that investors can read it out and make their own decision before after-hour earnings.

Stay tuned! I'll drop the link to that here as soon as its released

I feel like you have a back-end into my portfolio and write only about companies I own lol. $SDGR is one I own but have a smaller position in and am not incredibly bullish on. Aritzia, I am very bullish on. Really excited to see where your end up in your write-up.

TL;DR I'm still bullish long-term but not adding yet. Retailers struggle so that doesn't concern me. How management responds will be key. People often forget $LULU has gone through 4 drawdowns of >40% (and that doesn't include the Great Financial Crisis and COVID).
Unity is really starting to annoy me
What is it with management? It's one thing after another. I would say they just don't seem to get it, but they clearly do, given the fact they sold off a boatload of shares a week before this runtime fee announcement. They get it, but they don't care, which is even worse.

Such a short-term oriented move. This management is clearly just not aligned with their shareholders or userbase, and just doing their own thing.

Like @interrobangbros I will begin selling my position slowly. I'd just feel much more comfortable having my money with a company who's management has a similar time horizon to myself. Sucks because this is a real company, and seems to just need a bit of an overhaul at the top.

Anyways, naturally I ranted about it in my most recent podcast.
if you're interested in my full views on the runtime fees, plus a pretty brief overview of the co.
Unity Software - Brilliant Business, Mediocre Management?
Listen to this episode from Hourglass Investing - For the Self-Directed Investor on Spotify. Unity Software has built an engine that powers creators across gaming, film, and industry - but their management team threatens to tear down the brilliant product and attractive business model with moves that manage to peeve just about everyone involved.

It's so frustrating. I want to be a shareholder but Riccitiello is just so mediocre at his job. I'm beginning to understand why he resigned due to poor financial performance at EA. The only reason I'd consider holding is insiders only held 9% of outstanding shares (at YE'22) so it feels like an activist investor could take a stake and shake up management but I just don't see that happening here.
WSP Global
Fresh out the oven! Check out my research into WSP Global, $WSP.TO, a global leader in engineering and infrastructure consulting, growing through steady, balanced acquisitions across the globe and organic net revenue growth.

Locating one definitive point in history that marks the founding of WSP Global is difficult; with a long history of global acquisitions, reorganizations, and consolidation, WSP’s history is scattered and its timeline into the modern day confusing. As investors, this scarcely matters to us; the short story is that WSP, an engineering consulting firm which was then called Genivar, went public on the TSX (Toronto Stock Exchange) in 2006 after decades of growth through strategic acquisitions and mergers. Starting as a small Quebec-based engineering firm, the company was able to build out a vast toolbox of infrastructure services through this growth strategy, and each tool they added expanded their capabilities to serve various sectors, from transportation and energy to the environment and industry.

And that strategy didn’t stop when they came public; just 6 years later, Genivar acquired UK-based WSP and adopted the brand, reorganizing as the company we know today; WSP Global, a global professional services and consulting firm with expertise in planning, design, management, and engineering across a wide array of infrastructure sectors, including building, transport, industrial, energy, water, and environment sectors. Since going public, shares have steadily compounded at an 18% CAGR, easily exceeding the ~10% mark of the benchmark S&P 500 over that same period. This growth is in large part due to the continued expansion of the business through, you guessed it, yet more acquisitions. This strategy has served them well; today the company has:

  • Global Presence - Operations in APAC, AMER, EMEA, with over 50 offices globally

  • Massive Workforce - More than 68K employees (+10.9K in 2022)

  • Multidisciplinary Expertise - Top 10 ranking in eight markets

WSP’s massive footprint across both globe and industries alike means that, regardless of where you are in the world, there’s a good chance that WSP had something to do with the city skyline you're gazing out on, or the bridge that you traveled on to get to work this morning, or the sewage that your daily constitutional traveled down. It’s a reminder that behind every structure is a team of hands and minds at work to shape our world.

And that’s exactly what WSP intends to do; their guiding vision is to “future-proof” the world’s increasingly populated cities and environments against warming temperatures, rising sea levels, and heightening climate risks. By staying ahead of the trends transforming the world - geopolitical contexts, decarbonization, technology & digitization, and community-oriented solutions - WSP considers the drivers, disruptors, and developments that go into consistently delivering future-proof project outcomes. The company envisions their solutions addressing the growing need for sustainable solutions across industries and facets of society, designing for the future, and ultimately building communities where populations can thrive for generations to come.
Read the rest here.
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This Week at Hourglass
It has been a crazy week here! Slowly chugging through the to-do list though. Just released our weekly newsletter - this week's read is Deep Economy by Bill McKibben, the weekly watchlist is $STRL to keep in theme with my recent infrastructure trend, and the investor spotlight is on @ifb_podcast, the first podcast I have shouted out! You can find the article here if you're interested in any of the above, plus news on $ABNB and $PL (+thoughts from @valuetowhom), and a teaser on my upcoming research article on WSP Global.

I also released a new episode of the Hourglass Investing podcast on Wednesday! It was one of the most enjoyable episodes to make so far as I was doing it on a favourite company of mine, Duolingo - $DUOL. In the epi I dive into the company, business model, growth levers, how they're maintaining their market position, and the balance sheet. You can check that out on Spotify here or find it on the podcasting platform of your choice!
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Episode VII - Duolingo
Listen to this episode from Hourglass Investing - For the Self-Directed Investor on Spotify. Duolingo is a language-learning powerhouse on the path to transforming itself into a full education platform. Today's episode dives into their products, balance sheet, and the potential investment opportunity behind Duolingo. Find the Duolingo research article here: Find us on Substack to get all new research, newsletters, and podcast episodes sent to your inbox: Or catch us on our website!:

Infrastructure Play
A quick peek at WSP:
Market Cap: $23bn
5-yr CAGR - 21% CAGR
3-yr Revs - 15%
EV/Sales - 2x
P/E - 46x
5-yr EPS - 11% CAGR
7.3% Organic Growth in Net Revs; this is WSP's most important metric, as it shows their success in folding acquisitions under their umbrella.

WSP is one of my favourite pure-play infrastructure companies, which in turn is an industry I'm extremely bullish on in the coming years. WSP is positioning themselves to be a global leader benefitting from tailwinds to the industry, with developments in financing, a global transition to (and need for) sustainability, and improvements in technology for various sectors within the wider infrastructure market.

Their focus on earth and environment, water, and adapting property & infrastructure to the impacts of climate change has WSP well-positioned for strong growth for years to come, and their ability to fold in and organically grow acquisitions will be another huge aid to that.

I'm diving into WSP now, with that article coming out next Monday! Stay tuned to read about one of the under-appreciated stock market beasts.
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WSP.TO? If so, market cap at $23B is actually in CAD so USD market cap is $17.31B. Color me intrigued!
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