Chit Chat Stocks - Danaher (DHR) | Deep Dive

Episode Date: April 4, 2021

Danaher is a large American-based conglomerate. The company designs, manufactures, and markets professional, medical, industrial, and commercial products and services. Brad, Brett, and Ryan dive into the company and explain why Danaher has done so well over the years. As always enjoy the show! Subscribe to 7 Investing with the code "CCM": https://7investing.com/subscribe/ Follow Brad and check out his work on Twitter: https://twitter.com/StockMarketNerd?s=20 Follow us on Twitter: https://twitter.com/chitchatmoney Subscribe to our Youtube Channel: https://www.youtube.com/channel/UCG5Ni-SI-jyrEsoNUhqftNQ Email us: [e-mail] Timestamps Company Background | (2:25) Industry | (5:29) Management & Ownership | (7:11) Valuation | (10:12) Earnings | (11:28) Balance Sheet | (13:17) Our Analysis | (15:17) Disclosure: Chit Chat Money hosts and guests are not financial advisors, and nothing they say on this show is formal advice or a recommendation. Brett Schafer and Ryan Henderson are general partners and portfolio managers at Arch Capital. Arch Capital and its partners may hold securities discussed on this show. Learn more about your ad choices. Visit megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Chit Chat Money. On this show, host Ryan Henderson and Brett Schaefer interview industry experts and riff on the world of investing. As a quick reminder, Chit Chat Money is a CCM Media Group podcast. Ryan and Brett are also general partners at Arch Capital, and Arch Capital may have positions in the securities discussed in this podcast. Anything discussed on Chit Chat Money by Ryan or Brett or any other podcast guests is not formal advice or a recommendation. Now, please enjoy this episode. Welcome in. This is the Sunday Deep Dive show with Brad Freeman. We're talking Danaher Corporation today. It is a company that, one, is a hundred bagger.

Three hundred bagger. Three hundred bagger. Close. Or close to a three hundred bagger, if Ryan's got the stats right. So, it's one that no one, I don't want to say no one, a lot of people haven't heard of, but it's one of the best performing stocks of all time we're going to try to identify why that was the case what made them special but before we do brad how are you doing i know that it's a tough loss with michigan not making it to the final four uh are you recovered uh no comment there but uh excited to be on the

show talking about danaher so let's leave it there no comment all right i think i think we understand now oh yeah sales pitch oh yeah yeah this is a big one today too um who's your favorite wreck favorite wreck they just came out today i mean uh the team right the team one if i remember correctly their team one yeah but i like i like to i like basically all of them i mean simon's is interesting too i can't wait to read about that it's a company i don't necessarily understand but the way he'll explain it i think i'll be able to understand whether i choose to invest or not that's up to me but you want to keep beating around the bush on what the company does I uh no no no I'll leave it at that but I mean but if you want to check it out there's just

CCM for ten dollars off yes code CCM for ten dollars off it it starts with only seven bucks for your first month then and they just have their picks if we kind of beat around the bush they're on April 1st seven new picks they're crushing it I like Dan Klein's pick the best yeah yeah and they said that it was before they like to say it was a retail pick and I can't say Yeah, I was not surprised that Dan had a retail company. He is the retail expert. He is. But let's get to Dan and her.

So I'll talk about what they do. So it's probably the biggest company that you've never heard of, if you haven't heard of them. But like Brad and I both had not heard of them, and they are, what, $170 billion market cap? EV, yeah. Enterprise value. Okay, and so they're a global science and technology manufacturer.

So basically, they design and manufacture equipment for, through, I think it's 20 different operating companies, maybe 21 now. But it's basically for the life sciences, diagnostics, environmental and applied sectors. Those are sort of how they've broken down the revenue. And so basically, what I say is just think lab equipment. So testing equipment, microscopes, that kind of thing, really specialized equipment. That's where they've basically built this entire $170 billion company on. And they sell it on a recurring basis through a direct sales model. So sort of an old fashioned style business, but they've just done everything really, really well. And so, in the last 30 years, I think it's a 277 bagger. So, there are definitely lessons to be learned here. I'll get into the history, though.

The company actually started as a REIT, but after a fishing trip up to western Montana, the founders, Stephen and Mitchell Rails, envisioned a new kind of ever-improving manufacturing company, and they named it Danaher. That's after a river in Montana, too. Yeah. For our Montana listeners, you probably knew that. but it uh i always love the inception stories how they come up with these things we were fly fishing it was a gorgeous day we saw a bear it was just kaizen we were ever improving but anyway that's one of their big things they've tried to adopt kaizen which if you're not know if you don't know what that is it's the japanese business philosophy of continuous improvement um but they

switched to danaher they switched the company named danaher in 1984 and they started out as a group of more traditional manufacturing businesses, but since they pivoted to the sectors that we just talked about above and after they IPO'd in, I think the eighties, it wasn't very clear. Eighties is correct. I think. Yeah. But they've also, in addition to a bunch of acquisitions that they made, they've also done a lot of spinoffs. So there was a big spinoff with a group of companies, I think five years ago. Yes. Blanking on the name. So they basically took, So they had a bunch of traditional manufacturing businesses where they're not manufacturing, but it's, I believe, parts to manufacturing stuff, you know, kind of like what they're doing for life sciences, but for manufacturing companies, they split that off. That's a separate company.

I don't know if it's public or if it's a private company, but now they're focused more on life sciences, diagnostics, medical, and then they got the smaller one, which is water treatment, correct? Yes, yes, they do have that. I mean, there's, I think they have a list of all the companies in there. I think there's multiple water treatment companies, I thought. But it's just one of their segments. Yeah. Right. You want to hit industry?

Yeah. So this one's tough, but I'll try to hit some vague points. I guess just some anecdotal evidence. You might think, oh, is this market really that big? I mean, there's so much money that gets put into even research on this stuff. I remember I used to work at a lab and it wasn't even a big lab and they got $10 million a year from the Department of Energy. And you know what, they're probably spending it on Dana, her equipment, more or less. But they say in their 10K that although the company's

businesses generally operate in highly competitive markets, the company's competitive position cannot be determined accurately in the aggregate or by segment since none of its competitors offer all of the same product and service lines or serve all of the markets as the company. Now, that's legal speak, but basically there's too many competitors to kind of name. I guess some other ones that are adjacent could be like Thermo Fisher, Becton, and Dickinson, and Stryker are all large companies. The life sciences market, it's hard to pin down, again, any exact numbers. I tried to look up, and there was a big range of numbers,

but it looks like it's at least a $500 billion global spend on the life sciences market, so a huge market there. It could be as large as $1 trillion, and it's a rapidly growing industry. diagnostics market is a lot smaller but still large i think it was in the tens of billions at least if not larger and larger this year larger this year for sure although i don't know what those covet categories i don't know if it's only if it's life sciences or diagnostics or a little bit of both and then water treatment smaller it's 25 billion dollars but also growing rapidly as well um that kicks that's all for industry brad you want to talk management sure uh the real the

The Rails brothers who founded the company, they are actually still both involved with the company today. So Stephen Rails, who was the former CEO, he still serves as the board chairman. And then Mitchell Rails, who was the former president, still serves as the executive committee chairman. So I'd love to see that decades later, they are still around and contributing to the company. Today, the president and CEO is Rainer Blair. He's been with the company since 2010, and he's been an executive vice president since

2014 before he was named a CEO in 2020. He's been the CEO of a company called Mapi Americas, which is a construction chemical corporation. If I mispronounce that, I apologize. And he was a US Army veteran. So that's cool too. Executive VP is Jennifer Honeycutt. She's been with the company since 1999. She's been with Dana Hearst since they purchased a company called Hatch where she was working. Another executive VP and CFO, Matt McGrew, has been with the company since 24. He was a director at KPMG before joining. So, the theme and the trend of executives being with the company for a very long time is always a positive, and that's definitely a strong pattern here. General Counsel Joaquin Wiedemannis, and if I mispronounce your name, I am so sorry, sir.

So, he previously held the exact same role with Medtronic, a very well-known company, and previously chief compliance officer at GE Healthcare. So very relevant big time experience there. And then finally, chief scientific officer, Jose Carlos Gutierrez Ramos was the former global head of drug discovery at AbbVie. He's been a senior VP of biotherapeutics and of biotherapeutics R&D at Pfizer. And he's been a senior VP at GlaxoSmithKline too. So really impressive resume there. In terms of ownership, 11.25% of the float is held by insiders. They've been net buyers over the last six months. Pretty close, but overall net buyers. 81% of the float is currently held by institutions. Nothing super unique or interesting there. You have Vanguard and

BlackRock at the top. So normal stuff. Yeah. Shocked Vanguard and BlackRock. But the, did the founders still have a big stake? Did you see that at all? Or? I actually did not look. I just know that 11.25% of the float is held by insiders. It's interesting that they're net buyers because that kind of, that's a tell, I mean, something we'll get into is they are seeing a big benefit from what's going on right now. And so that's kind of a tell that they think their role in that universe is a little more sustainable or longer term than maybe some people think yeah and uh i guess we'll get into as well but they've been they have been growing at about five to six percent x acquisitions and at some

sort of conference i believe the ceo he was beating around the bush a little bit but he was saying that they would maybe be growing more in the eight to nine percent range which is a huge difference but we'll talk about that on the second half um i'll get into the valuation going to use a market cap of $159 billion here. Ticker is DHR. But for this company, enterprise value is pretty relevant because of the amount of debt on their balance sheet. So their enterprise value is about $178.5 billion. Their EV to operating cash flow is 29. So round market multiple, it's hard to tell. I've kind of had it in my head that the market's trading at like 30 to 35, but that might have changed depending on you know volatility or whatever and then even the free cash flow is

about 33 although you probably should include acquisitions here since they are serial acquire under cap x and you can also include selling businesses so honestly if you x out there's the big acquisition the 20 billion dollar one that they just did but if you x out that they i think the selling of businesses actually minimized all their capex but whatever you look at that yourself on the cashflow statement. Dividend yield right now is about 0.4% according to Coifin. So they do pay a dividend, but not really that relevant. And cashflow generally has been higher than gap earnings due to steady flow of non-cash charges. Great advantage on the tax front there, but I'll let Ryan go into earnings. Yeah. So they throw a lot of numbers out there in their earnings

because they have so many different operating businesses. What I say is kind of just read it like Altria's income statement, because the metric that's most relevant is essentially the adjusted diluted net earnings per share. And so this number actually grew by 43% year over year. They saw a big boost this year, like I said, because of what's going on. They had $22.3 billion in revenue, up 25% year over year. They have about 56% gross margins, which is, I mean, that was flat versus the prior year, but that's really high when you look at it compared to most manufacturers. I think gross margins for a typical, obviously it's different. Auto business are probably in the teens. Well, that's an OEM, but yeah. And then they had 16% net

margins, 28% operating cashflow margins. So 6.2 billion in operating cashflow for the year. Diluted share count dropped about 1% and the current dividend yield is 0.4%. It doesn't move as much because of all that institutional ownership, it certainly doesn't move as much as most of the market. Yeah. I think the, one of the biggest downsides of owning this thing is you got to know, just don't get, don't get bored. I think that can be a problem, especially for younger investors like us. And then one note is that, that revenue growth, some of it's inorganic, correct? There's a few billion in there. Yeah. I'm blanking on the exact number, but that included the acquisition of Sativa. Yeah. Or GE. Anyway, Sativa always makes me laugh

because of the cannabis reference, but that was GE's life science division. I think we'll get into that in future growth opportunities, but Brad, do you want to talk balance sheet before we get to the ad break? Yeah, that's a good segue. So as of right now, they have 4.36 billion in cash on hand versus 20 billion year rear. So as we just mentioned, they did make that large M&A decision. So that is why it took the hit. They have $22.7 billion in long-term debt. It's not, I mean, it's not nothing, but keep in mind, as Ryan and Brett just went over, they do have very strong cash flows. So it's not, and they have very reliable cash flows too. So it's not the biggest concern. Even though their balance sheet isn't perfect, it's definitely

not a weakness or a preventer of future growth, I don't think. They do have $33 billion in goodwill. versus 22 billion year over year. And again, this is a company with a very long track record of effective and accretive M&A. So it's really not overly concerning, but just something to highlight again and something to keep an eye on. Yeah. That long-term debt, if I saw it right, it seemed like a flex, like look at what we can borrow at because the rates were so low extending out so far. Yeah. I mean, there was no really concern. Or go ahead. Sorry, I should have mentioned that. So their long term or their rates on all this debt that they're raising, as Ryan was saying, 0.2% to 4.3%. So they have a lot of flexibility with creditors. And that did not change from the pandemic at all. Yeah. And then I think one thing to look at, they like to do an EBITDA thing, not an EBITDA thing, an EBITDA ratio, debt to EBITDA ratio. But if you look at the operating cash flow over $6 billion, compare that to the debt, it's not, I mean, they could pay that back in a few years and the lifetime of that debt at that low interest rate. I mean, it's not a concern at all.

You're kind of happy, I think, as a shareholder, if you believe in that GE acquisition, that can be value accreted. But you guys have anything else before you go to that break? OK, we're going to hit a break and then we'll get back for the second half of the show. Cox Panoramic Wi-Fi includes advanced security to help protect all your connected devices. You'll get real time alerts like this one. So you don't have to worry about malware or when your kid downloads a song from a shady link. And now all your computer can play is red color, red color, where are you? All blocked thanks to advanced security included with Cox panoramic Wi-Fi.

Advanced security must be enabled in the panoramic Wi-Fi app. Restrictions apply. All right, welcome back. next up is competitive advantages uh but we're kind of ryan wants to give out a number um just to kind of give you some context on how good or how trustworthy they are to to creditors yeah and so on that first half we mentioned that it was kind of a flex they've got uh one senior one senior note here at 1.8 percent and the note is due in 2049 so if that doesn't give you an idea of how much people are willing to lend to them.

I don't know what would. Whenever I see a 2049 loan, I mean, I've seen a 2060 and that's just, what is, that's so long. That's it. Although, I mean, listen, if they had like, if they've got a higher rate, shorter debt and they're able to borrow and pay down,

if they're able to borrow at 1.8% for 30 years and then pay off the short-term debt, that's awesome. Yeah, I mean, a smart move, really credit to the finance department there. I mean, there's nothing to complain about. But let's talk competitive advantages. Brad, why don't you kick things off? And another perfect segue. So the scale that they have and the relationships that they have with debt issuers, I think of that as a competitive advantage just because there are so many of these young med tech and life sciences companies. I have some in my own portfolio that are very, very cool and don't make any money. And some of them are going to be able to exist on their own and succeed. And some of them are going to need a big boy like this to step in and provide the capital to grow in terms of buying them out or acquiring them.

So I think while the balance sheet, it's not perfect, it is pretty darn strong. And like Ryan was saying, the debt does kind of seem like a flex because they are able to issue it with such favorable terms. So I think that combination of the track record of a very effective M&A and the balance sheet and credit they have access to is a really solid competitive advantage. Yeah. All right, Ryan. Yeah. So I guess you guys kind of hit the two big ones, which is sort of size and the one thing they tout more than anything else, which Brett will get into. But I would say trust primarily with their customers. So they have, I mean, they've been doing this for so long that they have these long running sort of established relationships with

both labs and then government funded entities, because a lot of these, I mean, you got to get this stuff has to be reliable. Right. And so the, yeah. And if you're a lab and you're on like a tight budget, I don't think you're going to take a chance on some new equipment provider because you don't want uh to have to repay and not have the money to do it so i think having those existing relationships is kind of i i wouldn't say moat but it's a bit of an advantage for them yeah it might be a non-ba yeah moat but it's it's nice um all in mind it's the process the some of their you know you might not look at their subsidiaries and say like all right these guys have like ip patents or exclusive deals or anything but the key to their success has really been

the Danaher business. Is it called success system system? Thank you, Ryan, or Kaizen is expired by Toyota and some of the Japanese stuff from the eighties, uh, that really inspired a lot of management teams. Um, if we look at something that's a little biased, it's from an old worker or executive at Danaher, uh, on Quora said that it was just basically hyping up the company's process like no other he said that their belief in continuous improvement is really sets them apart they seek out top talent which whatever that's a cliche but maybe they're really really actually good at that um like he said i met a few people that were like c and d players there but overall like you're really their ability to retain top talent is insane and then their ability to

actually set a strategy and then execute it over a long period of time they seems like they have that it's not necessarily like, all right, we're going to change the world, but we, they know what they're good at. They're going to stick to it. And it's a process they can repeat over and over and over. And if you're looking at the 10 K and you see, I mean, they talk about this Danaher business system all the time. And so at first I thought it was some software that they put all their operating system or operating companies on, but it's not, it's basically just this ethics board of like what we strive to do. And it has worked to that. I mean, to their testament, it's worked really well. And I remember the guy, one of the guys that sort of pioneered this DBS

or Dan and her business system said it's having the efficiencies across multiple departments, not just on the manufacturing side has really helped them create better profitability than other manufacturers. Yeah. All right. Future growth opportunities, Brad, what do you have? Uh, so the diagnostics segment of the business might, might face some, some headwinds on the reopening, but that dental, uh, that dental operation they have might actually get a large boost. Uh, I think of like dental operations as, as pretty, uh, pretty predominantly elective. So, uh, the shutdowns, lockdowns probably paused a lot of that. And I'm thinking there's a backlog like we're seeing in a lot of other places that were temporarily shut down. So as,

as normalization occurs or if normalization occurs um i think that could that could get a boost you know what's nice is that the stuff part of their business got a total boost um which i think yeah ryan you're going to talk about but they got they can balance that out where you know the reopening stuff uh i don't know it seems like they're kind of bulletproof even though they're they're really in only two industries it seems like within it um it's kind of a bulletproof model even though you would think that there could be some cyclicality due to code but ryan what do you have i guess covid variants is a future growth opportunity for them so the more variants there are the more people need danaher's equipment i know that's kind of a backhanded

future growth opportunity but uh testing isn't done once the vaccines are deployed uh people are they're still going to test for variants labs are going to need it i think covid testing is going to go on and so uh with all these different variations their equipment's needed um and i think with executives being net buyers it they are showing that this isn't done with it doesn't just stop after 2021 this isn't just a temporary boost this equipment is going to be needed for the next i don't know decade or so like or god yeah no no feel free okay well it seems like like with the pandemic, you know, you, you might think, all right, one-time boost and then it's going to stop off.

This might've inspired a lot of these labs and governments and stuff like that to keep the ball rolling and try to get prepared for the next one. So they're going to be wanting to use either, either of it's some of Dan Hurd's products that go more into research. They're going to be wanting, there might be more funding for that and just keeping up testing and hygiene and all that stuff that there might be a sustained demand. Exactly. And if anyone has insight into that sales pipeline, it's them.

That's true. Yeah. I would not argue with that. All right. I'll hit mine. Acquisition of GE Life Sciences Division. They're now calling this Sativa. It's not the cannabis plant, but it's C-Y-T-I-V-A, if you're looking for how they say it on the conference call. on the conference call after the acquisition they said this doubles the revenue in the biopharma market to over five billion dollars annually so i think that's now going to be their largest business segment and it makes up over 50 of their life science division i think there's a clear path to growth over this over the next decade that's probably one of now it's a super tough industry to identify winners and losers biotech is for a lot of investors a black hole or a black hole black box. But there's going to be the need for all these tools. Danaher is the leader in that. I think that's a very smart move. Seems like a shrewd acquisition. They did this in March.

Basically said, GE, you're struggling. Let's take this off your hands. We're going to use this asset a lot better. I think that's a testament to the management's strategy. I don't know. You guys have any thoughts on the acquisition? I know it's the big one here. I like that it's coming from GE because GE always seems to be in this rush to liquidate things. So I feel like they probably got a good price now, but that's really only, I mean, I didn't look into it enough. Um, I think the name's kind of funny, but that's about it. All right, Brad, anything. And then if not, just hit up your highlights on low lights.

Now I'll go to highlights and low lights. Uh, highlight would be institutional ownership is sky high. So Brett did make a good point that that can make the stock a little boring, but boring is sometimes good. Um, and, and over 80% institutional ownership is certainly noteworthy, um, for low lights, it is, it's hard to find a real red flag or weakness with this company. Um, but, but I guess if I'm, if I'm really picking at it, the 33 billion in goodwill, it's not, it's, it's a pretty large number. And again, they, they've, they've got so much proof of, of

effectively purchasing companies and bolting them onto their company into their own organization in profitable way. So I'm really searching for things here. Yeah. If anything, it's going to come down to size and valuation. We'll talk about that at the end. But Ryan? Yeah. Highlights, management says all the right things. Their focus is return on invested capital. They try to compete for shareholders. They really talk about that a lot. Lowlights, yes, very stable. Doesn't seem like it's going to get disrupted. Environmental issues, the focus on that could be a big tailwind here over the next decade yep yep um but my low lights is it feels like this is a business this is like a business school case study from the past yeah like it doesn't feel like something

i want to own now you want to own the danaher of the next yeah danaher and the other part is i kind of i feel like employees or like operating businesses when they get bought out and like the like hr departments are pushing this danaher business system stuff i'd get so fed up with it like that's not kaizen that doesn't fit our principles like yeah sometimes the cults it feels a little culty but usually cults i don't know berkshire hathaway you could describe that as a cult kind of so yeah but it's not i don't know it's like not stated it's like this unwritten code where you're like just act in a no that's true and you know act with integrity but you know you never know it could it could be they might not put in your face it might just be something

that you kind of learn while you're there but just investors faces yeah yeah that's true that's true I'll hit mine. I mean, I do, like you guys said, management and culture, you know, like Toyota or Berkshire Hathaway, it's like one of those few companies that differentiated themselves through culture who weren't really like Toyota wasn't in a good business, but they use that manufacturing strategy and just process that just made them win the market or be the leader in the market. I think that's why investors are likely confident they can take better care of that GE asset. An example from the conference call that I thought was super impressive, and this is a quote, our free cash flow to net income conversion was 149% for the full year and marks the 29th consecutive year. This figure has exceeded 100% for Danaher. I mean, that's just amazing. That's an amazing stat right there.

um lowlights you know i understand winners keep on winning this has been a fantastic investment for anyone that's held on to it for 20 or 30 years but size is a concern management is awesome culture is great but that's something that can erode quickly if you get a bad you know the founders aren't there anymore it's kind of like maybe some of the worries people have with amazon yeah has the culture been embedded probably but you know we saw that happen with ge we saw that happened with coca-cola we saw that happen with even mcdonald's and definitely ibm too this is the buffet uh by a business that could be run by an idiot because eventually one will like this could be if the dbs is integrated into the workflow of the day-to-day of all employees

then i guess it's a who cares about management but capital allocation matters yeah true all Brad, anything else? Then we'll hit more or less interested to wrap things up. That's all I got. I will go to more or less interested. A little bit of a two-part answer here. For me specifically, I'm probably less interested just because of some of the low lights we hit on. It does seem like this would be a case study of how to run a business effectively for a few decades, but now that that's happened and now that we're talking about that and dropping our jaws at that because we're so impressed. I don't see that explosive upside in future decades. But I mean, if my dad asked me, what stock should I invest in? I want a very safe asset and something

that I can sleep really well at night knowing I own. This is absolutely something that I would consider telling him about. For sure. Yeah. Because if you're listening, we're all under the age of 30 so this goes in the retirement portfolio yeah and i can i mean there's some companies we look at i won't say any names that we think could have the potential to be a another danaher but the thing that concerns you know the big difference is these companies trade at market caps less than 5 billion danaher is almost 200 billion it's a huge difference so ryan i am so much less interested to be honest it just uh it is a really it's a really sound business but is of no interest to me primarily because of the size like it just feels

it could outperform and it it would not be an era of omission it would be an era of like i didn't care enough and i don't even you know it just feels boring to own i don't know it's just not that exciting to me um well we said i said boring earlier i really boring shouldn't no simon shouldn't come into your investment thesis it honestly can help but i get your point i understand it yeah it just uh feels like a very successful company of the past and it's literally like you can't argue that there's more growth ahead than behind them like that's impossible so yeah unless they're gonna yeah let's hurry all of gdp the yeah the the i wasn't gonna say no i just forgot yeah i will say this this show will probably have less listens than

It shouldn't. Our most listened to show is Palantir. I think people can learn a lot more from this show on how to identify a future good business. Oh, I was going to say that. Okay, look, valuation is still premium here. We're still 30 plus times free cash flow for a large company. kind of like yeah i guess i'm not as interested in this specifically i'm interested in businesses like this where they have some sort of differentiated culture with a long-term time horizon but if you read chris mayer's a hundred beggars the key to a hundred beggar is one long runway for growth where you can grow your business at an above market rate say like 12 percent two small yeah and three like small cap yeah small cap stock and three multiple expansion now dan her had all of these but they can't like you know it will not be 100 bagger from here yes so this is like one of those where you look at it you're like all right is this it'd be hard to lose

money and maybe and you know it's they're going after some giant markets so may you know i would not be surprised if they were market outperform i mean the multiple is not crazy good either it's not like a cheap it's not screaming multiple no and you know i don't know it seems like they have some clear advantages but yeah it's just kind of like you throw your hands sexy yeah it's not sexy I mean, I think, again, we use Danaher as an example of what to look at for smaller companies. Yeah. All right. Which tailors into my next pick?

Oh, Brad, what were you saying? I should have raised my hand, my bad. It's okay. We're still learning. No, no. But I mean, yeah, there's so many things that this company just did flawlessly over the last few decades. And it is really informative, I think. it's cool that it's cool that we're doing this company because i think it's valuable to listeners

in a completely different way than than what is normally presented um or no no one on here saying go out and buy the stock we're just saying wow they they they already delivered and here's how they did it kind of yeah apply to the lessons of this investment to future investments yeah which the stock for next week pick between two so I'll let you guys vote it out then I'll be the deal breaker Olo which is

the mobile ordering platform Brad's Friday of the starter position I think kind of in hot water I guess this last week some controversial news came out but I'll leave that we knew DoorDash was waiting for the IPO what a coincidence

or Coursera Coursera. They just IPO'd and they're like online learning for colleges, I think. I'll go Olo. I'm pretty fascinated by it. Yeah. I love you some Olo. Let's do that one.

Okay. Yeah. You won't have to do as much research for this show. And the controversy is three years old, just so everyone knows. Yeah. It was just reading the headlines. Yeah. It seems like Financial Times went for search engine optimization.

and, and, and really it was, it was very much a resurface, but I won't, we won't spoil anything. There's a lot of good stuff to discuss next week. All right. Perfect. That's good. Yep. That's going to do it for this episode as always. Use 7investing, sign up, get code CCM at checkout, $10 off. New picks are out. Remember we are not financial advisors. Anything we say on the show is not formal advice or recommendation. Ryan and I are general partners at Arch Capital. Arch Capital may hold securities discussed on this podcast. Thank you all for listening. We'll see you next week.