Fast Growers - What Are Your Top 5 Picks Today?

[scorpioncapital]

would be interesting to buy the basket in exhibit 6 and see if it outperforms sp500 over next decade )

[Ace River Capital]

RICK - Top position by far

DS (if it secures debt needed to continue)

SENS 

HZO

NCMI (if it can stabilize current debt)

[LearningMachine]

On 10/17/2022 at 8:06 AM, Pelagic said:

 

Check out One Water. Both it and MarineMax should do well, ONEW has higher insider ownership and is executing very well. It's a large and highly fragmented industry, something like 4300 independent boat dealerships in the US. Plenty of room for HZO and ONEW to execute a roll-up strategy of independent dealers.

 

With MarineMax, I was surprised to see they are somehow getting higher gross margin than other players in the boating industry value chain. 

 

However, their cash is getting sucked into working capital ($813M for Inventories in 2023 10K, up from $454M in 2022 10K) and PP&E ($528M in 2023, up from $246M in 2022), leaving no cash available for shareholders.

Edited January 24 by LearningMachine

[Paarslaars]

On 10/17/2022 at 9:21 PM, RedLion said:

 

I've been watching this since 2019 and kicking myself that I haven't bought in. Thank you for reminding me, I think I'm going to take another look on this. It seems like its a multi level marketing weight loss product type business the last I remember, is this correct? 

 

Down over 50% since this post, hopefully not kicking yourself anymore.

[Longnose]

On 10/16/2022 at 11:07 PM, WayWardCloud said:

You could look towards South East Asia where tech growth has been decimated :

Grab (9B market cap)

GoTo (15B market cap)

Sea (23B market cap)

 

Ive been digging into Grab. 

Ever since my visit last fall. I've been trying to get more comfortable with GRAB.

 

It felt like its going to be a clear winner with a long runway from an outsider looking in.

 

But need to get more confidence in the financials and politics.

 

[LearningMachine]

8 minutes ago, Longnose said:

 

Ive been digging into Grab. 

Ever since my visit last fall. I've been trying to get more comfortable with GRAB.

 

It felt like its going to be a clear winner with a long runway from an outsider looking in.

 

But need to get more confidence in the financials and politics.

 

 

With Grab, if a competitor came up and had only 5% market share but a better price, do you think some customers would be willing to use the competitor on their homogenous product? 

 

If so, where is the barrier to entry and moat? 

 

Similar with Sea to some extent. 

Edited January 24 by LearningMachine

[Longnose]

1 hour ago, LearningMachine said:

 

With Grab, if a competitor came up and had only 5% market share but a better price, do you think some customers would be willing to use the competitor on their homogenous product? 

 

If so, where is the barrier to entry and moat? 

 

Similar with Sea to some extent. 

To me it so similar to the Uber Lyft scenario - Lyft hasn't been really able to steal significant share from Uber. Also, I don't know that there is substantial room to undercut them long term. We are seeing it with Uber and Lyft right now where they are now trying to drive more towards profitability instead of just rev/share growth accompanied with a ton of cash burn. 

 

I don't think the moat is impenetrable and there is probably room for a tier 2 competitor. But when you are over there GRAB's presence is dominant right now. That it would be hard to overturn that without Grab screwing up their brand image or going bankrupt.

 

Short answer is i don't know. But Gut instinct based on mungers idea of saying if someone gave me the marketcap of GRAB (12B) and said go build a company to compete/overturn GRAB. i think it would be freaking hard and at best you'd create a Lyft that is taking 30% share while grab retains 70% share. 

 

Though i could be wrong and often am. 

 

[LearningMachine]

6 minutes ago, Longnose said:

To me it so similar to the Uber Lyft scenario - Lyft hasn't been really able to steal significant share from Uber. Also, I don't know that there is substantial room to undercut them long term. We are seeing it with Uber and Lyft right now where they are now trying to drive more towards profitability instead of just rev/share growth accompanied with a ton of cash burn. 

 

I don't think the moat is impenetrable and there is probably room for a tier 2 competitor. But when you are over there GRAB's presence is dominant right now. That it would be hard to overturn that without Grab screwing up their brand image or going bankrupt.

 

Short answer is i don't know. But Gut instinct based on mungers idea of saying if someone gave me the marketcap of GRAB (12B) and said go build a company to compete/overturn GRAB. i think it would be freaking hard and at best you'd create a Lyft that is taking 30% share while grab retains 70% share. 

 

Though i could be wrong and often am. 

 

 

Sorry, I disagree. I think it would be easy to build a company to compete with Grab, Uber and Lyft.   With Uber, you have to give Lyft and other entrants some more time. 

 

The reason it is easy is because product is homogenous, and a significant percentage of customers compare price. 

 

Proof based on induction would be that if you have a competitor start with 1% market share and slightly better value prop, e.g. better price, would some customers pick it?  In marketplaces where the product is homogenous, some customers will end up picking it, causing the marketshare to grow from 1% to 2%, and so on. 

 

So, I believe moat of Grab, Uber and Lyft is weak, and subject to new entrants coming in. 

Edited January 24 by LearningMachine

[Longnose]

Then why aren't we seeing more uber and lyft competitors in the US? 

 

I think your oversimplifying it or we would see all the local markets popping up with their own versions of uber. They've been around long enough to see someone infringe on their share. 

 

It Uber, Lfyt, or traditional taxi. or i gotta work for 4th option and at that point your just boycotting and being "that guy"

[RedLion]

15 hours ago, Paarslaars said:

 

Down over 50% since this post, hopefully not kicking yourself anymore.

Thank goodness I went with real estate instead! Haha. Better lucky than good. 

[Xerxes]

The geography of south east Asia is not easy navigate. Especially Indonesia. There is a local network on each island to overcome. 
 

Sure Grab or whoever could be easily de-throned in Singapore. But ..

[Paarslaars]

On 1/24/2024 at 11:44 PM, RedLion said:

Thank goodness I went with real estate instead! Haha. Better lucky than good. 

 

Down another 25% over the past week, starts to get interesting again?

[RedLion]

5 hours ago, Paarslaars said:

 

Down another 25% over the past week, starts to get interesting again?

Definitely time to start digging in again. I always considered this a low moat business so I’m not jumping the gun to jump in, but things are definitely getting interesting. 

[nsx5200]

On 1/24/2024 at 1:38 PM, Longnose said:

Then why aren't we seeing more uber and lyft competitors in the US? 

 

IMHO, the answer is in the question.  There simply not enough margin in the business to support yet another competitor and the economy of scale to achieve a decent profit is not very well known.  It took Uber 37 billion in annual revenue and roughly 15 years to achieve profit...  I don't know about you, even if a new company is 4x more efficient, it would take nearly 10 billion in revenue to achieve profit, and I'm not sure if 4x more efficiency can be achieved without a real breakthrough in operating style.  I say there are easier fish to catch, and looking at a 37 billion 10+ year problem, unless there's a real compelling new angle to this, I would, IMHO, rather just chunk money at S&P500.

 

[Saluki]

On 3/5/2024 at 5:27 PM, nsx5200 said:

 

IMHO, the answer is in the question.  There simply not enough margin in the business to support yet another competitor and the economy of scale to achieve a decent profit is not very well known.  It took Uber 37 billion in annual revenue and roughly 15 years to achieve profit...  I don't know about you, even if a new company is 4x more efficient, it would take nearly 10 billion in revenue to achieve profit, and I'm not sure if 4x more efficiency can be achieved without a real breakthrough in operating style.  I say there are easier fish to catch, and looking at a 37 billion 10+ year problem, unless there's a real compelling new angle to this, I would, IMHO, rather just chunk money at S&P500.

 

 

It's incredibly difficult to develop a two-sided market.  If you are already using Uber/Lyft and switch from one to the other based on prices or wait times when you need it, then what would make you use a new competitor?  Lower prices and wait times?  If they lower prices for you they will have more customers than drivers and higher wait times.  For drivers to handle the customers paying less than Uber/Lyft, you need to entice them with a bigger share of the commission.  So you will be getting squeezed on both ends.  And Uber/Lyft already have customers and drivers, so for a new entrant, they would need to do a lot of advertising.  

 

They are also taking steps to make it harder for a new entrant to gain a foothold by targeting a smaller niche and building on that.  Lyft has a lower price tier if you're willing to wait a few minutes. They also have larger vehicles (UberX), green vehicles, and pet taxis and have branched into food delivery and bicycle rentals.  Other than ferrying medical out patients (ambulettes), I don't know where a new entrant would see enough meat on the bone to try to take a bite.