ONEW is a holding company of marine dealerships with a market cap of $600m. There are a few interesting characteristics of ONEW:
There is less brand loyalty than automotive because you don't get exposed to it as much. If a dealership is lucky on the marine side, they know and like their local dealership, they walk in there and buy whatever brands that dealership sells. Both the manufacturer and dealership have to agree they want to sell the product, and there are times where a dealership will drop one product and pick up another, but their market share does not change; they sell the same number of boats regardless of the brand. When someone walks in the door, they get them to pick a vessel type, then sell them the brand they have.
As with any roll-up, understanding the advantage buying assets and how multiples may change is crucial to the investment case.
They may not reach their goal of buying a location and doubling it every time, so they may not grow as rapidly as they have. I would question their 12-year growth projections. They have shown that can buy certain types of dealerships, but others can also find those and make it slightly more competitive. A Bob's dealership owner dreams that he has multiple bids. Inevitably the capitalism in all of us would drive towards that scenario, and today OneWater might be the one they call, but others are coming and as they get more organized, I would expect there to be more competition.
For Q3 FY22, ONEW reported 10% SSS growth driven by a combination of both unit and pricing growth compared to a 10-20% decline for the industry.
One big question is the cyclicality in this industry. COVID has driven record demand and margins for dealers. If interest rates continue to climb, given most boats are purchased with financing, will this significantly reduce demand and leave dealers with overvalued inventory? ONEW's strategy is interesting but could we be peak cycle today?
TEMN's equity has declined from ~170 EUR per share to ~70 EUR over the last 4 years. There have been multiple rumours of both PE and strategic buyers considering an acquisition. The company seems to have a solid product and good visibility of >80% of the company's revenue. This interview is an interesting conversation with a former C-Suite TEMN executive on the history of the company:
with a solid plan with that organization, you streamline it, you give a little bit more autonomy to the regions, but you create centers of excellence – the distribution model is there – and you really rationalize what you're selling in those regions. Give a true P&L in terms of people that know the regions; give them a little bit of autonomy in terms of, you have 20,000 human days of development and place your bets where you want to put them, but here are the key criteria in terms of how we're going to productize. Centrally, this is what we're looking at. When we launch these products, they can't take more than six months to build. They are shorter sprints and we know the market potential.
The problem that you will have with Temenos is, in Andreas' mind, the company almost went down the tubes with Guy Dubois. When Guy Dubois – who was the CEO at that time – tried to merge Temenos with Misys, and those were two different models. Guy was fired and Arnott, who was the CFO, became the CEO. That's when Andreas came back as executive chairman. George was always in the background but, really, it was Andreas that at that point took firm hold. In Andreas' mind, he always has that bold changes, in his mind mean risk, and I think it still goes back to that 2011, 2012 time frame, when he did that transaction with Guy Dubois.
Twilio is moving 'up the stack':
Twilio's going another direction. Twilio's going what we in Silicon Valley call up-stack. They have decided that they see how much money their customers are making, like call centers and contact centers like Flex and customer engagement platforms and how much money and how much of a deeper relationship with a customer those companies are able to achieve using Twilio. Twilio wants to enter that market itself. You see Twilio having its own contact center. It's clearly building its own customer engagement platform and it's realizing that phone numbers are interesting. If we woke up tomorrow and iMessage and RCS – Google’s and Apple's ways of messaging – decided to interact, SMS would be dead overnight. This is not a revenue stream or a technology that you want to bet the future of what is a very high growth company on; a company that's very committed to very high growth. You don't want to commit those growth numbers to expansion of use of the phone system. I think that just doesn't make sense. - Former VP at Twilio
The biggest risk for Twilio?
A step-change in the way OTT messaging works that could bypass Twilio.
I think the biggest risk is a really a manifest change in the way that over-the-top messaging works before Twilio is ready to fully transition financially. Say tomorrow, as I said, Apple and Google sign an agreement that RCS and iMessage will interoperate. This would mean that no business in the world needs to send an SMS message using the traditional phone number. That would be a really big change. There are already changes happening, such as the new password. - Former VP at Twilio
This interview looks at how a merchant, in this case the Former Head of Payments at Hello Fresh, decides on choosing a payment provider. This comment on how BNPL is changing the payments landscape is interesting:
Adyen is connected to buy now pay later companies such as Klarna, but the fees are high and they offer no rebates. Adyen do that for you because if you can't integrate with them directly, Adyen is your gateway, but that is no longer necessary with an orchestrator. For APMs and buy now pay later solutions, I would no longer send any to Adyen, as it no longer makes sense. Once you have a direct connection, you would stop going through Adyen and paying high fees. In these cases, we would take 100% of the volume away from Adyen. I would never use an orchestrator unless they were directly connected to them. - Former Head of Payments at Hello Fresh
This interview explores drivers and potential growth limitations of the podcast advertising ecosystem. Spotify is occupying the high-end of podcasting with shows like Joe Rogan, etc, which leaves Acast and other indie platforms fighting over smaller shows. This limits the monetisation opportunity and causes them to churn at scale:
I just think there needs to be a real focus specifically on ad-tech. I personally churned accounts there because they outgrew Acast. They go to everybody else because it's a diminishing return, specifically with D2C down funnel folks. These are hypothetical numbers, but I could grow those to a million-dollar account, but then our performance would tank because they outgrew the network. I churned probably four million-dollar accounts in three to five months.
One interesting perspective is that the future of podcast ads could converge with more visual / video components as technology evolves.
I think there will be different ways that we don't see right now in the audio industry that people are most likely going to blanket and call a podcast, in the same way in advertising, all of ad-tech got called programmatic. People call it programmatic because that's the word people picked up on. I think people will start to call a lot of audio – if it's not specifically music – podcasts. IoT and connected devices are rolled into this. Within the advertising component, specifically to home in on your question, how much of that app experience will be open versus closed? Because the open app lends itself to visual components, it lends itself to display advertising and to even CTAs or sponsorable opportunities; I'll use Google Maps for an example. Google Maps puts McDonald’s pins on Google maps. That's a paid-for advertising product, not because Google wants to tell you where all the McDonalds are. If the audio app experience becomes more visual and less passive, then you will have more advertising opportunities because the app is open
An interview last week explored the opportunity for Cytek's reagent business. An executive who distributes Cytek and other flow cytometry instruments estimates the reagent market at ~$400m - a huge opportunity for Cytek who now offer competitive reagents:
It is not how much the kit costs but how many patients you can test with that kit. If you want to do multiplexing on other instruments, you need two, three or even seven tubes, but with Cytek you can put everything in one tube because they have multiple colors. One of my application specialists told me that it will cost 50% less than other kits. That is the beauty of their concept but they do not market that. They market multiple colors instead of one tube, but they should market one tube because very few people will use 40 colors.
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