MMM – 3M COMPANY (HQ: USA/Industry: Industrial Conglomerates)
3M is a diversified technology company with a global presence in the following businesses: safety and industrial; transportation and electronics; health care; and consumer. 3M is among the leading manufacturers of products for many of the markets it serves. Most 3M products involve expertise in product development, manufacturing and marketing, and are subject to competition from products manufactured and sold by other technologically oriented companies.

Over the last 10-years, 3M had minor revenue growth of 18%, with EPS growing by 60%. Better performing data points for the company include FCF/share growth over 100% and a steady increasing dividend that totaled 150%. While ROE average more than 40% and ROIC averaging nearly 20%. To value the business at their current market price the company would need more than a 7% per year growth for the next 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=66740&owner=exclude

IVR – INVESCO MORTGAGE CAPITAL INC. (HQ: USA/Industry: Mortgage Real Estate Investment Trusts (REITs))
Invesco is primarily focused on investing in, financing and managing mortgage-backed securities and other mortgage-related assets. The company objective is to provide attractive risk-adjusted returns to stockholders, primarily through dividends and secondarily through capital appreciation.

Invesco’s results over the last 10-years have not performed well, having several years of negative EPS, and declines in BV, dividend payment and FCF/share. With 2020 being a particularly underperforming year for the company due to COVID. But even in their worst years the company still maintained a positive FCF. The stock price has never recovered from the COVID dip in March of 2020, so it still valued below a margin of safety intrinsic value. As the world moves on from COVID maybe Invesco can see their performance improve along with its stock price.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=1437071&owner=exclude

HCSG – HEALTHCARE SERVICES GROUP, INC. (HQ: USA/Industry: Commercial Services & Supplies)
Healthcare Services Group provides management, administrative and operating expertise and services to the housekeeping, laundry, linen, facility maintenance and dietary service departments of healthcare facilities, including nursing homes, retirement complexes, rehabilitation centers and hospitals located throughout the US. The company believes it is the largest provider of housekeeping and laundry management services to the long-term care industry in the US, rendering such services to approximately 3,000 facilities.

Until recently, Healthcare Service Group was growing revenue steadily from 2012 to 2018 totaling more than 85%. However, since then revenue has steadily declined, along with the company having inconsistent growth in EPS and a slight increase in share count during the last 10-years. But BV had steadily grown more than 90% with a dividend increase of nearly 30%. To value the business at their current market price the company would need more than a 6% per year growth for the next 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=731012&owner=exclude

GOLF – ACUSHNET HOLDINGS CORP. (HQ: USA/Industry: Leisure Products)
Acushnet is a global leader in the design, development, manufacture and distribution of performance driven golf products, which are widely recognized for their quality excellence. With a mission to be the performance and quality leader in every golf product category in which it competes in. Two of the most revered brands in golf are part of their holdings. They include Titleist, one of golf’s leading performance equipment brands, and FootJoy, one of golf’s leading performance wearable brands. Titleist has been the #1 ball in professional golf for over 70 years and FootJoy has been the #1 shoe on the PGA Tour for over six decades.

Acushnet has grown its revenue modestly by 45% since 2013, though there have been multiple years with declining sales. With 2021 being the company’s best performing year, thus several data points had extraordinary growth since 2013, to include increases in EPS at 750% and FCF/share at 765%. Along with its BV growing more than 350% since 2016 and a dividend payment increasing 450% since 2017. To value the business at their current market price the company would need more than a 13% per year growth for the next 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=1672013&owner=exclude

DIOD – DIODES INCORPORATED (HQ: USA/Industry: Semiconductors & Semiconductor Equipment)
Diodes is a leading global manufacturer and supplier of high-quality application-specific standard products within the broad discrete, logic, analog, and mixed-signal semiconductor markets. The company serves the consumer electronics, computing, communications, industrial, and automotive markets.

For the last 10-years the company has had mostly steady revenue growth totaling nearly 185%. With 2021 being the company’s best year as it saw EPS up 880% and FCF/share up more than 3100% from 2012. However, the years between 2012 and 2021 did not have consistent growth in these data points. The only consistency was in the BV, which has increased 75% during the period. To value the business at their current market price the company would need more than a 13% per year growth for the next 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=29002&owner=exclude