- Required no. of MLCCs went from 3K in 2012 to 8K in 2018
- EV Batteries will require 30K MLCCs
- Smartphones will need 1.5x more MLCCs in 2024 than today
- MLCC supply will be 6x higher (6.1 trillion!) by 2025
Here's what MLCCs do ...
2/ Murata: The Best Way To Play The Demand Surge
- Started w/ $102K in capital, now does $14B in revenues
- 40% Share of Global MLCC market
- Churns out 150B MLCC pieces per month
- 77K employees and 92 subsidiaries around the globe
There's three reasons Murata will win ...
3/ First Mover & R&D Advantages
Murata wins two ways:
1) 92 subs and thousands of customers provide insight other companies can’t get. They spot trends and potential product failures before anyone else.
2) 40% Mkt share allows Murata to spend more on R&D w/ less % of revs
4/ Monozukuri: Everything In-House
Murata does everything in-house. From raw material sourcing, sheet casting to sintering and inspection/packaging.
Why this is important:
- Their global reach and scale, Murata can solve customer needs faster/cheaper than competitors
5/ Valuation & Exponential Growth
- Murata's a model of consistency: 30% GM, 12-17% EBIT margins, profitable. But inventory/accts. rec. have sucked cash-flows last year.
- The current stock price assumes low (~5%) revenue growth till 2025.
- Mr. Market doesn't see EV/5G
6/ Risks
There's a few major risks with the Murata bull thesis:
- Rise in China-owned MLCC production
- Increased demand from alt. capacitors (aluminum, tantalum)
- Inability to correctly anticipate customers' needs
- Economic recession = less capex in EV & 5G
7/ Long-Term Stock Chart
One more thing ... the monthly chart is *tantalizingly* bullish. If we get a monthly breakout into new ATH we could really see this thing move.
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These high-level stats impressed me (cc: @ballmatthew ):
- 1.5M monthly active creators
- 50%+ of all mobile/PC/console games made w/ Unity
- 3B app downloads per month (!)
- 15K new projects made per day
- Creators span 190 countries
2) Business Overview
Motto: "We believe the world is a better place with more creators in it. Creators, ranging from game developers to artists, architects, automotive designers, filmmakers and others, use Unity to make their imaginations come to life."
Thought-provoking piece from the wicked-smart fund manager Gary Mishuris.
Here's a thread on the five signs Gary sees in this potential market bubble ... forbes.com/sites/garymish…
Sign #1: "Stocks are bought based on belief and not thorough analysis"
- It's not enough to believe. At some point your beliefs need to be backed by thorough analysis and numbers.
- Great resource for this numbers to narratives (ht @AswathDamodaran):
Sign #2: "A narrow group of companies or business models is perceived to be so valuable that any company that is seen as belonging to this group is valued at extraordinary levels"
Today's examples:
- Any SaaS business
- E-commerce
- Online retailers
- Telemedicine
- SPACs