Content Published Last Week

1.Estee Lauder: Branding, Innovation & Management

2. Tesla: Megapack, Solar and Microgrids

3. Surgical Science: Relationship with Intuitive Surgical & Robotic OEM's

4. IP Podcast: Diploma PLC

5. Alpha Group: Dynamics of the FX Market

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Visible Alpha built a platform to analyze consensus data for financial and operating metrics on over 6,400 publicly traded companies. Rather than digging through models one by one, Visible Alpha creates consensus data for every line item included in sell-side models so institutional investors can better understand expectations on metrics beyond just revenue and earnings. Try Visible Alpha for free here.

IP Product Ideas & Survey

Over the last few months, we’ve been exploring other data sources we could include on the IP Platform and we’d appreciate feedback from our members. More specifically, we’ve been reviewing the value of adding financials, earnings transcripts, and filings to our platform given this is a core part of a public equity investors’ process.

There are now many new upstarts providing this information at a B2C price points compared to enterprise offerings such as Factset, CapIQ, and Bloomberg. There are also enterprise challengers rolling up assets to provide a new all-in-one platform to compete with legacy incumbents.

This has piqued our interest as we constantly hear from managers that pricing is significantly increasing. Those challengers rolling-up assets likely have to increase pricing to make their bundled economics work, especially if those assets were acquired when rates were rock bottom.

We’ve historically been very cautious adding any non-proprietary data to our platform but we’re curious about the potential of clean financials, transcripts, and filings alongside our proprietary content all at a great price.

We’d deeply appreciate any feedback to how you access such information and where you believe the process can be improved by completing the 2-minute survey.

As always, please feel free to reach out directly with any comments around where we could help you save costs whilst providing a high-quality product.

Diploma PLC

In this episode, we explore why we've been studying Diploma PLC, the UK-listed value-added distributor, and how we approached research for our new report on the Enterprise Research Tier. DPLM has compounded EBITA at ~20% for over 20 years and has recently hired a new CEO that has accelerated growth. We discuss the following:

1. DPLM's core business model and history under Bruce

2. How Johnny is changing the org structure relative to other holdco serial acquirers

4. Changes in the M&A strategy

5. How we're approaching further research on DPLM for our Enterprise Tier

Estée Lauder: Branding, Innovation & Management

Estée Lauder's stock is down ~25% YTD whereas L'Oreal is up ~20%. This former VP of Global Brands and Product at Estee Lauder discusses why they think L'Oreal's product and geographic diversification is a strength compared to Estée Lauder:

I think they should balance the business, much more, by category. L'Oréal is the number one player in hair care, but hair care is still mass. ... They are extremely strong because L'Oréal was built in hair care. The founder Eugène Schueller was a hair care researcher so the company has a strong DNA in hair care, but hair care is more mass and salon, than luxury. When it comes to luxury, L'Oréal is fragrance first, makeup second, skincare third, but more balanced between the three categories. Lauder is too focused on skincare and China. - former VP of Global Brands and Product at Estee Lauder

Tesla: Megapack, Solar and Microgrids

Interesting insights from a Former TSLA Engineer:

In the United States, they (Tesla) have the lion's share of the home energy storage market, with 70% to 80% of battery systems in homes being Powerwalls. This is because it's easy, more affordable, and the power and energy you get for the price is still the best in class. Powerwall 3 will only improve this further. - Former TSLA Engineer

As the network for Tesla's energy-storing units scales, it will be able to form a virtual grid. Utility companies at the state level will in turn be able to benefit from this network of individual energy-storing units to manage the grid more effectively. This will benefit individual customers as well in terms of cost savings.

The agreement was that the utility could manage the battery when the grid is up, meaning they can increase or decrease the load at the customer's house as the grid operator. If the power goes out, the homeowner can use whatever energy is left in the battery during the outage. The goal is to have an aggregated virtual power plant with all the residential Powerwall homeowners, so they can control all of them with one command, either charging or discharging. They want the cost of generating energy through this method to be less than buying electricity on the open market or generating it at their other sites. Utilities can quickly look at their avoided costs and determine the economic viability of this model. - Former TSLA Engineer

This interview also explores in more detail the unit margin across its range of Megapack and Powerwall products and why this is important for the long-term positioning of TSLA.

Surgical Science: Relationship with Intuitive Surgical & Robotic OEM's

One of the key drivers of the Surgical Science bull case is their relationship with Robotic OEM's. In this interview with a former Intuitive Surgical Customer Learning Manager who currently works in Johnson & Johnson's robotic program, we explore how these relationships work:

I believe they are the best in the business for multi-port surgery in the soft tissue space, particularly console-based surgery. They have set the standard. However, there is room for growth in terms of innovation. They have acquired many companies and are working on various projects, which takes time and resources. Considering their workload and presence at shows throughout the year, I think they do a great job. I can't think of anyone better in that space. - Former Intuitive Surgical Customer Learning Manager

Having seen Intuitive start producing their own simulation content and recently selecting Surgical Science as a vendor in their role for J&J, the executive shares how Intuitive made this decision.

Over time, more people got involved, and simulation became a bigger part of the customer learning pathway. The learning management system played a significant role in surgeon training, with simulation being a key component. It was often the first thing surgeons would see and engage with when starting their training with Intuitive's da Vinci system. I think it is, by far, the biggest piece of the surgeon's training journey. - Former Intuitive Surgical Customer Learning Manager

And where Surgical Science stands with younger Robotic OEM's.

Companies like ours are very vendor-driven. We are very early in our robotics program. Intuitive has had their program for 25 plus years now. We have not, and we're not ready to have a simulation group of 25 plus people. So we're going to have vendor partnerships for some time, but they still need to get their metrics together because we need consistent look and feel and metrics behind our design. - Former Intuitive Surgical Customer Learning Manager