Compounders Podcast

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Welcome to the Compounders Podcast. On this show, Host and Investor, Ben Claremon, will explore the topic of compounding from various angles, including through interviews with public and private company executives, investors who focus on compounders, and newer investment firms that are building a business they hope will become more valuable over time.

Episodes

Wednesday Aug 17, 2022

Putting the Customer First for 90 Years with Scott King, CEO, and Jeff Gorman, Executive Chairman of The Gorman-Rupp Company (NYSE: GRC)

Wednesday Aug 17, 2022

Our guests on the show today are Scott King and Jeff Gorman, the CEO and Executive Chairman of The Gorman-Rupp Company, a 700 million dollar market cap company that designs, manufactures, and sells pumps and pump systems to customers all over the world. 2022 has been quite an eventful for year for the company. Earlier in the year, Jeff Gorman stepped back to Chairman, allowing Scott to become the CEO, despite not having the Gorman last name. The company also completed a very large acquisition of a company called Fill-Rite. Given those events and all of the other challenges in the world today, I was excited to speak with Scott and Jeff about:

The timing of the management transition and the expectation that Scott continue the company’s long history of dividend increases
The rationale for the Fill-Rite deal and why now was the right time to take a big swing—with some leverage;
The importance of culture and the family-like values that have persisted over the last 90 years;
Where the company is investing in technology and innovation; and
How the company approaches tough economics times given all of the different crises the company has weathered during its long history

This episode of Compounders: The Anatomy of a Multibagger is sponsored by Tegus, an innovative and disruptive company that is changing the way professional investors work. For more information, please visit: https://www.tegus.co/

To get all the latest updates about the podcast, see who we’ll have on next, as well as watch the video version of the pod, please follow us on twitter at @BenClaremon and subscribe to the SNN Network YouTube Channel at www.youtube.com/snnwire.

For more information about Cove Street Capital, please visit: https://covestreetcapital.com/

iTunes: https://apple.co/3xlUvPY

Spotify: https://spoti.fi/3jxkxLl

Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.

All opinions expressed by your hosts and the podcast guests are solely their own opinions and do not reflect the opinion of Cove Street Capital or any affiliates. This podcast is for informational purposes only, it is not investment advice, and should not be relied upon for any investment decisions. We are not recommending the purchase or sale of any securities. The hosts and guests may be beneficial owners of the securities discussed. You should not assume that the securities discussed are or will be profitable..

Tuesday May 10, 2022

The Building Blocks of a 100-Bagger with Chris Mayer, Portfolio Manager at Woodlock House Family Capital fund

Tuesday May 10, 2022

My guest on the show today is Chris Mayer, the Portfolio Manager of the Woodlock House Family Capital fund and the co-founder of the firm. He is also the author of 100 Baggers: Stocks That Return 100-to-1 and How To Find Them. You will notice that we are doing something a little different with this episode. Chris is our first guest who is not an executive at a public company. But, since this podcast is called Compounders: The Anatomy of a Multibagger, we thought it would be great to have on the guy who literally wrote the book on finding 100-baggers. In this wide-ranging interview, Chris and I discussed:

The common attributes of 100-baggers Chris found in his study of compounders;
The biases that make it hard for investors to realize a 100-bagger;
Why individual investors might be more likely than are institutional investors to get the full benefit of decades of compounding;
Where serial acquirers fit within the 100-bagger paradigm; and
Why high incremental returns on capital are so important to long-term success

For more information about Cove Street Capital, please visit: https://covestreetcapital.com/

iTunes: https://apple.co/3xlUvPY

Spotify: https://spoti.fi/3jxkxLl

Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.

Wednesday Apr 27, 2022

Riding the Wave of Warehouse Outsourcing and Automation with Malcolm Wilson, CEO, and Mark Manduca, CIO, of GXO Logistics (NYSE: GXO)

Wednesday Apr 27, 2022

Our guests on the show today are Malcolm Wilson and Mark Manduca, the respective CEO and CIO of GXO Logistics. GXO is a 7-billion dollar market cap company that provides logistics services to companies around the world. The company was recently spun off from XPO Logistics and now has the freedom to invest aggressively to helps its customers with supply chain and warehouse automation. COVID, supply chain disruptions and rising labor rates around the world have made many companies start to think deeply about their supply chains and to consider outsourcing and automation. As such, given how well GXO would appear to be positioned for the future, I was really looking forward to talking to Malcolm and Mark about:

The rationale for the spin and what having more autonomy will allow GXO to do;
The structural tailwinds that are behind the company as it relates to e-commerce, outsourcing and warehouse automation;
Why GXO is definitely not a commoditized warehouse company;
Why the company is a buying Clipper; and
The importance of return on capital when it comes to capital allocation

For more information about Cove Street Capital, please visit: https://covestreetcapital.com/

iTunes: https://apple.co/3xlUvPY

Spotify: https://spoti.fi/3jxkxLl

Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.

Wednesday Apr 13, 2022

Driving the Healthcare Industry to Embrace Non-Invasive Ventilation with Casey Hoyt, CEO of Viemed Healthcare, Inc. (NASDAQ/TSX: VMD)

Wednesday Apr 13, 2022

My guest on the show today is Casey Hoyt, the CEO of Viemed. Viemed is a 196 million dollar market cap company that provides in-home durable medical equipment (DME) and post-acute respiratory healthcare services to patients in the United States. The company has developed a specialty in providing non-invasive ventilation to patients with chronic obstructive pulmonary disease or COPD. Casey took over as CEO in 2017 and has helped the company grow its revenue meaningfully over that time, even accounting for the COVID headwinds the company has seen over the last few years. Given Viemed’s impressive recent track record and the amount of white space it has to continue to serve even more at-risk patients, I was looking forward to talking to Casesy about:

The elements that have led to such rapid revenue growth;
The attractiveness of in-home care relative to acute and outpatient case;
The size of the COPD population in the U.S. and how Viemed can increases the penetration of non-invasive ventilation;
How the company is attracting and retaining talented people in a very tight labor market for healthcare workers; and
How the company thinks about adding new products and services to its current offerings.

For more information about Cove Street Capital, please visit: https://covestreetcapital.com/

iTunes: https://apple.co/3xlUvPY

Spotify: https://spoti.fi/3jxkxLl

Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.

Wednesday Apr 06, 2022

Joining the Ranks of the Great Industrial Technology Companies with Tom Logan, CEO of Mirion Technologies, Inc. (NYSE: MIR)

Wednesday Apr 06, 2022

Our guest on the show today is Tom Logan, the CEO of Mirion Technologies. Mirion was founded in 2005 and Tom has been the company’s only CEO over that period of time. Mirion is a global leader in radiation measurement, serving end markets such as nuclear, life sciences, healthcare and industrial. Mirion recently became publicly traded via a SPAC, but unlike many other de-SPACed companies, Mirion has a long operating history and generates positive EBITDA. The company has had to weather a number of headwinds over Tom’s tenure, including the Great Financial Crisis, the Fukushima nuclear disaster in Japan, and of course COVID. Despite that, the company has grown consistently through organic and inorganic means and expanded its margins meaningfully. With all of that as a backdrop, I was excited to talk to Tom about:

The current state of the base of nuclear power plants around the world and how the Russia-Ukraine conflict is impacting nuclear policy;
How the company is positioning itself to grow within the medical end market;
What he has learned from Mirion Chairman Larry Kingsley, who achieved tremendous success as CEO of IDEX and Pall Corp.;
The elements of the business model that lead to sticky, recurring revenue; and
How the company hopes to achieve its mid-single digit growth algorithm

For more information about Cove Street Capital, please visit: https://covestreetcapital.com/

iTunes: https://apple.co/3xlUvPY

Spotify: https://spoti.fi/3jxkxLl

Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.

Wednesday Mar 09, 2022

Compounders: The Game Plan Moving Forward

Wednesday Mar 09, 2022

Welcome to what I will call an update episode of Compounders. We are done with our executive interviews for Season 2. However, we are in the process of putting together a Season 2 recap show—similar to what we did for Season 1. Overall, we had a very eclectic mix of guest with some larger company CEOs and some smaller company CEOs. But the quality of the interview was really good in my humble opinion. The Joey Levin episode got the most engagement we have received for an interview. I think a lot of people discovered Compounders through that episode. Thanks for listening to this Season and we hope you will stick around for what we have in store.

Going forward, the structure is going to change a little bit. During the first 2 seasons, we tried to put out an episode each week for 12 weeks. Given the busy schedules of public company execs and the demands associated with quarterly earnings, this has created unnecessary pressure and scheduling complexity. So, instead of doing 12 episodes and taking a month off, we are going to book and release episodes on a consistent but not necessarily weekly basis. Our focus right now is on getting great guests who run interesting companies.

We ran a Twitter poll and over 90% of people said they don’t care about seasons—they just want us to find great guests. We hope you will continue to follow Compounders and check your podcast feed regularly for new episodes. Bobby and I have a list of about 50 companies we are going to be reaching out to over the next few weeks. There are a number of true compounders on that list.

A lot of these companies came from suggestions from listeners. Thanks to everyone who has reached out with some recommendations. However, we are always looking for new guests. So, please feel free to reach out. As always, warm introductions are much appreciated. I am pleased to say that our brand has grown to the degree that cold outreach has started to pay dividends. However, we have found companies to be very receptive when we are introduced by shareholders.

We are excited about the momentum we have built since August and I personally am looking forward to bringing you interviews with compelling guests in a variety of industries and hopefully from a number of countries.

Thanks again for listening and feel free to reach me at podcast@covestreetcapital.com or follow me on Twitter @benclaremon. Please stay tuned for the next interview of Compounders, to be released in the next several weeks.

For more information about Cove Street Capital, please visit: https://covestreetcapital.com/

iTunes: https://apple.co/3xlUvPY

Spotify: https://spoti.fi/3jxkxLl

Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.

Tuesday Mar 01, 2022

Monetizing a Library of Intellectual Property with Eric Ellenbogen, CEO and Vice Chair of WildBrain Ltd. (TSX: WILD)

Tuesday Mar 01, 2022

Our guest on the show today is Eric Ellenbogen, the CEO and Vice Chairman of WildBrain. WildBrain is a 500 million Canadian dollar market cap entertainment company listed on the TSX in Canada. The company operates through two segments, Content Business and Canadian Television Broadcasting, and through those develops, produces, and distributes films and television programs worldwide. WildBrain’s intellectual property includes well known characters such as Snoopy, Strawberry Shortcake and Inspector Gadget.

Eric became CEO during the summer of 2019, after being the Co-President of Classic Media at DreamWorks and having served as the CEO of Marvel before it was acquired by Disney. Given Eric’s vast experience in the media content production industry, I was very much looking forward to talking to Eric about:

WildBrain’s preferred business model, especially as it relates to holding onto IP versus simply selling shows to third parties;
The opportunities for growth in the company’s Peanuts franchise;
What he has learned by watching Disney expand the Marvel franchise that he can replicate at WildBrain;
The strategy behind taking a hit show or popular character and turning those into consumer products revenue; and
His thoughts on the high valuations studios have been receiving in recent deals.

For more information about Cove Street Capital, please visit: https://covestreetcapital.com/

iTunes: https://apple.co/3xlUvPY

Spotify: https://spoti.fi/3jxkxLl

Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.

Tuesday Feb 22, 2022

Why Viasat, Why Inmarsat, Why Now with Mark Dankberg, Co-Founder and Executive Chairman of Viasat, Inc. (NASDAQ: VSAT)

Tuesday Feb 22, 2022

Our returning guest on the show today is Mark Dankberg, the co-founder and Executive Chairman of Viasat. Viasat is a 3.1 billion dollar market cap company that provides broadband and communication products and services worldwide. Viasat started off a defense-oriented company but has since layered on consumer and business-facing offerings by developing the world’s leading high throughput geostationary satellites.

Subsequent to our first interview with Mark, Viasat announced its intent to merge with Inmarsat, a UK-based company that provides mobile satellite communications services on land, at sea, and in the air worldwide. Without question, the size and the timing of the deal was a surprise to many of the people in the industry, especially because Viasat was in the middle of preparing to launch 3 new satellites over a short period of time. Given all of that, I was very curious to hear from Mark:

Why Viasat decided to acquire Inmarsat versus other potential targets;
Why Viasat is the right owner of Inmarsat versus other potential buyers;
Why do the deal now versus waiting until the 3 new satellites had been launched;
How Inmarsat fits into Viasat’s hybrid network philosophy; and
How Viasat plans to integrate Inmarsat employees culturally.

For more information about Cove Street Capital, please visit: https://covestreetcapital.com/

iTunes: https://apple.co/3xlUvPY

Spotify: https://spoti.fi/3jxkxLl

Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.

Tuesday Feb 15, 2022

Replay: Creating the Fastest Global Satellite Broadband Network with Mark Dankberg, Co-Founder and Executive Chairman of Viasat, Inc. (NASDAQ: VSAT)

Tuesday Feb 15, 2022

This week, we are replaying another one of our favorite episodes from Season 1. The reason is that we are about have the same guest on again to discuss a transformational merger the company announced after we released our interview. So, over the next two weeks we will have back-to-back episodes with Viasat’s Co-Founder and Executive Chairman, Mark Dankberg.

In the episode from last Season, Mark and I discussed the nuances of the very dynamic satellite broadband industry, including why satellite broadband is not likely to be a winner-take-all market as well as the value of having a hybrid network of satellites at different orbits. In our second interview, Mark and I will talk about the rationale for the merger with Inmarsat and how the deal changes Viasat’s long-term trajectory. So, please stay tuned for a multi-episode deep dive into the future of space communications.

EPISODE:

My guest on the show today is Mark Dankberg, the co-founder and Executive Chairman of Viasat. Viasat is a 3.8 billion dollar market cap company that provides broadband and communication products and services worldwide. Viasat started off a defense-oriented company but has since layered on consumer and business-facing offerings by developing the world’s leading high throughput geostationary satellites.

Over the next 2 years, Viasat will be launching 3 new satellites that will give the company the ability to offer global coverage to its military and in-flight WIFI customers. Additionally, Viasat is rolling out community WIFI initiatives to help people in emerging and frontier markets connect to the internet for the first time. All of this is happening while the company is facing a growing threat from low earth orbit satellite providers such as Elon Musk’s Starlink.

Given how much is going on and the fact that Mark recently went from being the CEO to assume the Executive Chairman role, I thought it would be a perfect time to talk to him about the following topics:

- The future of the global satellite broadband industry, including competition with Starlink;

- What the US military needs now from Viasat and how that may evolve over time;

- The cultural differences between the defense and commercial sides of the company;

- How Viasat can benefit from all the space-related activity going on right now; and

- Why this was the right time to shift his focus

Key takeaways:

- Deeply understanding your customers’ wants and needs is a prerequisite for success in both D2C and B2B business. But, the more intermediaries you have, the less you can really understand your end customers. Also, working with distribution partners can be difficult if the goals of the organizations are not aligned.

- Not every industry is a winner-take-all market. Network effects and multisided marketplaces can create virtuous cycles and winner-take-all markets. In industries with supply constraints, negative network effects drive competition and ensure a diverse set of offerings.

- Bandwidth demand is heavily affected by geography and low-earth-orbit (LEO) networks are geographically limited. Despite offering low latency, every incremental satellite will only spend a fraction of its time over the areas with the most demand, and far more over oceans and other low demand areas. This is why a hybrid network that includes geostationary and LEO satellites is likely the best solution for customers.

- When a company is entering new markets or introducing new products, it is imperative to be a voracious reader of business history and theory, as well as to be well-grounded in the basic math that governs the industry.

- Modern warfare requires real-time information and instant communication. Accordingly, the U.S. military will need an up-to-date network of satellites with ground stations placed in safe locations in order to process and anticipate the moves of its adversaries.

Timestamps:

1:18 - Introduction

2:56 - Diversifying into direct-to-consumer (D2C) with the 2009 WildBlue acquisition

5:06 - The organizational restructuring required when shifting towards D2C

7:06 - Building a D2C sales organization within a legacy B2B company

11:51 - Making stair-step improvements with every new satellite launch

18:50 - The process of deciding to build Viasat’s own satellite

27:30 - Satellite broadband is not a winner-take-all market

31:32 - LEOs, GEOs, hybrid networks and why there is no “best” satellite design

45:27 - Building a cohesive culture with two distinctly different business segments

51:23 - Why Viasat 3 will play a key role in the future of warfare

58:25 - How Viasat benefits from all of the excitement around space

62:40 - What Mark has learned from Baupost Group’s founder Seth Klarman

65:53 - Being confident in putting out guidance even before the Viasat 3 satellites launch

70:55 - The least understood aspects of Viasat

For more information about Cove Street Capital, please visit: https://covestreetcapital.com/

iTunes: https://apple.co/3xlUvPY

Spotify: https://spoti.fi/3jxkxLl

Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.

Wednesday Feb 09, 2022

Modernizing the Hospitality Management Software Industry with Ramesh Srinivasan, President and CEO of Agilysys, Inc. (NASDAQ: AGYS)

Wednesday Feb 09, 2022

Our guest on the show today is Ramesh Srinivasan, the CEO of Agilysys. Agilysys is a 900 million dollar market cap company that provides software and hardware products and services to the hospitality industry. Ramesh became CEO back in 2017, after a somewhat rocky turnaround attempt by a prior management team. Agilysys was starting to generate higher gross margins and revenue growth before the COVID outbreak impacted its trajectory, starting in the company’s fiscal year 2021. Given the recent challenges and with everything going on in the hospitality industry, I was eager to talk with Ramesh about:

The organic growth path he sees for the company in upcoming years;
How the company manages the desire to grow with the need to generate operate profits;
The ways in which Agilysys helped its customers respond to COVID-related issues;
His thoughts on M&A and expanding the company’s presence outside the US, and
The benefits and challenges associated with rolling out cloud native software-as-a-service products

For more information about Cove Street Capital, please visit: https://covestreetcapital.com/

iTunes: https://apple.co/3xlUvPY

Spotify: https://spoti.fi/3jxkxLl

Each new episode will be available every Tuesday morning on Apple, Spotify and all podcast streaming platforms.