<![CDATA[Preferred Shares]]>https://www.preferredsharespodcast.comhttps://substackcdn.com/image/fetch/$s_!ULXf!,w_256,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F639c6dff-b5ac-4c17-8f3f-9d5ed3bd77c8_512x512.pngPreferred Shareshttps://www.preferredsharespodcast.comSubstackThu, 23 Apr 2026 12:25:09 GMT<![CDATA[The Ferguson Water Thesis with Todd Wenning]]>https://www.preferredsharespodcast.com/p/the-ferguson-water-thesis-with-toddhttps://www.preferredsharespodcast.com/p/the-ferguson-water-thesis-with-toddThu, 16 Apr 2026 23:04:31 GMTWelcome to Episode 32 of the Preferred Shares Podcast.

In this episode, we explore the water thesis behind Ferguson Enterprises, a leading distributor of HVAC and plumbing solutions. To help walk us through the intricacies of the thesis, we are joined by Todd Wenning. Todd is a prior contributor at The Motley Fool, previously covered companies on the sell-side for Morningstar and the buy-side for Johnson Investment Counsel and Ensemble Capital Management. He’s a busy guy! He runs KNA Capital Management, LLC, an Ohio-registered investment advisor, and is the founder and editor of the newsletter Flyover Stocks. He is also currently teaching Portfolio Management at the University of Dayton.

In This Episode

  • The history of Ferguson — Its founding and early focus.

  • The water thesis — Why now is the right time.

  • The distributor model — How Ferguson’s position in the value chain makes it a prime beneficiary of the water thesis.

  • Full scope — The expansive SKU listings, inventory management, and diversified suppliers and customer bases that work with Ferguson.

  • The market — A look at market share and how competition has evolved.

  • Capital Allocation — How Ferguson redeploys capital across organic investments, bolt-on acquisitions, and capital returns to shareholders.

  • Reciprocity — How the HVAC and water sides of the business assist one another, creating a system greater than the sum of its parts.

  • Management — Exploring compensation, alignment, and horizon.

  • Risks — What could go wrong.

  • Closing Thoughts — The key things to focus on, and, taking the other side to the risks, what could go ‘more right.’

Charts and Images

Ferguson’s physical footprint, market exposure according, and KPIs, according to its 2025 annual report.

Additional Reading & Listening

Curious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:

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Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[Veteran Analyst Mark Purdy on Nestlé ]]>https://www.preferredsharespodcast.com/p/veteran-analyst-mark-purdy-on-nestlehttps://www.preferredsharespodcast.com/p/veteran-analyst-mark-purdy-on-nestleFri, 20 Mar 2026 11:14:39 GMTWelcome to Episode 31 of the Preferred Shares Podcast.

In this episode, we continue to focus on Nestlé. We brought back our guest Mark Purdy (whom we interviewed about Lindt & Sprüngli) to chat about the company’s more recent history and its current set of challenges and opportunities. Mark is a veteran investment analyst with 40 years of experience with a particular focus on consumer brands. He’s now retired from full-time research and portfolio management, and he has set up Calabria Park Advisors, a boutique consultancy.

In This Episode

  • Setting the Stage: Consumer Staples Under Pressure — Mark frames the last six years for the sector, covering the COVID distortion between in-home and out-of-home consumption, and the wave of inflation that followed.

  • Nestle’s Perfect Storm: Cocoa & Coffee Costs — Commodity prices hit Nestlé especially hard, with cocoa at one point nearly 5x its pre-spike level, squeezing margins.

  • CEO Carousel: Three Leaders in 18 Months — The show examines the transition from Paul Bulcke to Mark Schneider to Laurent Freixe and now Philippe Navratil, and how leadership instability can create internal distraction even at a resilient company.

  • The Case for Insider CEOs in Consumer Staples — Mark argues that the long-cycle nature of brand stewardship favors internal promotions, and why Navratil’s 20-year tenure and track record make him a credible candidate.

  • Brand Portfolio Sprawl — A discussion of how consumer goods giants naturally accumulate thousands of brands despite every CEO promising “fewer, bigger, better,” and what Nestlé should actually do about it.

  • M&A Winners and Losers: Ralston Purina vs. Health Science — Mark contrasts Nestlé’s successful acquisitions (Purina, the Starbucks licensing deal) against its costly failures in vitamins, wellness, and Jenny Craig, and explains why working capital mismatches can doom category expansions.

  • The KitKat Exception and Confectionery Regrets — Despite owning iconic Rowntree’s brands, Nestlé largely squandered its confectionery position — with KitKat the lone standout — while watching Lindt thrive on its doorstep.

  • Capital Allocation Priorities: Dividends, Debt, and RIG — Mark digs into Nestlé’s current financial constraints, a stretched ~70% dividend payout ratio, rising net debt, and why CEO Navratil’s new focus on Real Internal Growth (RIG) — a metric Nestlé itself invented — is the only viable path forward.

  • The L’Oreal Stake: Financial Asset or Get-Out-of-Jail Card? — Mark walks through the 50-year history of Nestlé’s ~20% stake in L’Oreal and the logic (and politics) of gradually selling it down.

  • Closing Advice to the Board — Mark’s prescription: Nestlé must recognize its genuine strengths (emerging market reach, scale, R&D); stop chasing growth through ill-fitting acquisitions; and be patient. A steady 3% real sales growth rate has historically been more than enough to create a very attractive shareholder return.

Charts and Images

The two charts below show the total increase decrease of Nestlé’s seven product categories over the last ten years. The two growth categories have been Powdered and Liquid Beverages and PetCare, while the others have been down or flat. The result has been total sales not increasing by much for Nestlé over the prior decade.

Nescafé ad in the December 2, 1939, edition of Country Life.
1956 Nescafé ad for the German market. © Nestlé S.A.

Click on the graphic below for a great article published on Oct. 24, 2018, by The New York Times, about the amazing popularity and variety of Kit Kats in Japan.

Additional Reading & Listening

Did you miss our episode on the early history of Nestlé? Just click the link below!

Curious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:

Enjoy this episode? Share it with someone who loves business history as much as you do!

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Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. At the time of publishing, clients of Andvari and Fortune Financial owned shares of Nestle. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[Nestlé: The Building of a Global Behemoth]]>https://www.preferredsharespodcast.com/p/nestle-the-building-of-a-global-behemothhttps://www.preferredsharespodcast.com/p/nestle-the-building-of-a-global-behemothTue, 17 Feb 2026 13:40:38 GMTWelcome to Episode 30 of the Preferred Shares Podcast.

In this episode, we discussed the history and founding of Nestlé.

  • Origins of the company in 1867

  • The strategic 1905 merger with Anglo-Swiss Condensed Milk Company

  • Nestlé’s exceptional resilience and growing scale

  • Nestlé’s global dominance in the coffee market

  • The success of its Maggi brand

  • The organic and inorganic growth behind its Health Science and Medical Nutrition segment

Anglo-Swiss advertisement in an 1897 issue of the Irish Journal of Medical Science

Additional Reading & Listening

Curious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:

Enjoy this episode? Share it with someone who loves business history as much as you do!

You can also follow Preferred Shares, Devin, Doug, and Lawrence on X.

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Disclaimer

All opinions expressed by Preferred Shares Hosts and guests are solely their own opinions and do not reflect the opinions of their current or former employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari Associates and Fortune Financial may maintain positions in the securities discussed in this podcast. As of the date of this podcast, Andvari and Fortune Financial clients owned shares of Nestle. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[Forging a Family-Owned Legacy: The Story of Thompson Traders]]>https://www.preferredsharespodcast.com/p/forging-a-family-owned-legacy-thehttps://www.preferredsharespodcast.com/p/forging-a-family-owned-legacy-theThu, 08 Jan 2026 12:03:06 GMTWelcome to Episode 29 of the Preferred Shares Podcast.

In this episode, we interviewed Clifford Thompson of Thompson Traders, a family-owned business founded in 2002. Since then, Thompson Traders has carved out a niche in the high-end home fixture market with a focus on luxury copper and brass sinks, range hoods, innovative designs, and strong customer relationships.

We discussed a variety of topics:

  • Cliff shares his journey in founding Thompson Traders;

  • The importance of cash flow in small businesses;

  • Thompson Traders evolving from importing to designing their own products;

  • The intricacies of product design;

  • The impact material choices have on customer preferences and product durability;

  • How customer relationships are key to business success;

  • How Thompson Traders has navigated a competitive marketplace; and

  • The WSJ article in which Thompson Traders was featured and how tariffs have impacted small businesses like Thompson.

To see Thompson Trader’s products in all their glory, please take a look at their most recent “Look Books” for 2025:

2025 Thompson Catalog
153MB ∙ PDF file
Download
Download
Above It All - Thompson Custom Range Hood Design Guide
53.9MB ∙ PDF file
Download
Download

Thompson Traders Photos

Several of Thompson’s products being created by the coppersmiths of Santa Clara del Cobre, Mexico.
Range hood and kitchen sink by Thompson Traders.
Display of Thompson’s Quintana line of products.
From left to right: Clifford Thompson, Alejandra Thompson (Cliff’s mother), Alejandra De Jordan (Cliff’s sister), and Cliff Thompson (Cliff’s father).

Additional Reading & Listening

Curious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:

Enjoy this episode? Share it with someone who loves business history as much as you do!

You can also follow Preferred Shares, Devin, Doug, and Lawrence on X.

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Disclaimer

All opinions expressed by Preferred Shares Hosts and guests are solely their own opinions and do not reflect the opinions of their current or former employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari Associates and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[David Gearhart's Journey in Building a Private Insurance Holding Company]]>https://www.preferredsharespodcast.com/p/david-gearharts-journey-in-buildinghttps://www.preferredsharespodcast.com/p/david-gearharts-journey-in-buildingFri, 05 Dec 2025 20:12:15 GMTWelcome to Episode 28 of the Preferred Shares Podcast.

In this episode, we interview David Gearhart, CEO and Chairman of Wilmington Holdings Corporation, a private holding company of several insurance businesses. David tells the story of how he decided to try to find and acquire a small insurance business. In 2017, he successfully acquired Wilmington Insurance Company. After eight years of growth, both organic and by acquisition, Wilmington Holdings now controls about $50 million of annual premiums and has $100 million of assets on its balance sheet.

We discussed a variety of topics:

  • David Gearhart’s background and how the business bug bit him;

  • What the process was like to search for and acquire a private insurance company;

  • David’s search criteria;

  • The importance of disciplined underwriting and staying within their circle of competence;

  • The importance of people in the insurance business;

  • How David thinks about the trade-offs between investing in Wilmington’s insurance businesses versus investing the insurance float;

  • Key lessons David learned when he studied the history of National Indemnity Company;

  • David shared one of the mistakes he made and his takeaway;

  • David’s goals for Wilmington going forward.

Enjoy this episode? Share it with someone who loves business history as much as you do!

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Other Sources

David Gearhart also did an interview with At Home With Roby which was released on October 6, 2024.

Additional Reading & Listening

Curious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:

Enjoy this episode? Share it with someone who loves business history as much as you do!

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Disclaimer

All opinions expressed by Preferred Shares Hosts and guests are solely their own opinions and do not reflect the opinions of their current or former employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari Associates and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[A Primer on Salmon Farming with Nick Longhurst of Marathon Asset Management]]>https://www.preferredsharespodcast.com/p/a-primer-on-salmon-farming-with-nickhttps://www.preferredsharespodcast.com/p/a-primer-on-salmon-farming-with-nickFri, 21 Nov 2025 19:39:44 GMTWelcome to Episode 27 of the Preferred Shares Podcast.

In this episode, Nick Longhurst, portfolio manager at London’s famed Marathon Asset Management, gives us an overview of the incredibly interesting salmon farming industry.

We discussed a variety of topics:

  • Nick’s background;

  • Marathon’s investment philosophy;

  • A brief history of the evolution of the salmon farming industry;

  • Why salmon over other types of fish?;

  • The various barriers to entry that exist in the industry;

  • The size and structure of the salmon farming industry;

  • Comparing and contrasting some of the large publicly traded salmon farming businesses; and

  • The headwinds and potential risks for the current participants of the industry.

Enjoy this episode? Share it with someone who loves business history as much as you do!

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Other Sources

Additional Reading & Listening

Curious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:

Enjoy this episode? Share it with someone who loves business history as much as you do!

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Disclaimer

All opinions expressed by Preferred Shares Hosts and guests are solely their own opinions and do not reflect the opinions of their current or former employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari Associates and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[Endurance: From the Track to the Cockpit, a B-2 Pilot's Story]]>https://www.preferredsharespodcast.com/p/endurance-from-the-track-to-the-cockpithttps://www.preferredsharespodcast.com/p/endurance-from-the-track-to-the-cockpitThu, 06 Nov 2025 12:45:33 GMTWelcome to Episode 26 of the Preferred Shares Podcast.

Fewer people have flown the Northrop Grumman B-2 stealth bomber than have traveled to space, which is why it was a great honor for Preferred Shares to interview Lt. Col. Todd Moenster, USAF, Retired, a former B-2 pilot.

We discussed a variety of topics:

  • Why Todd became interested in becoming a pilot;

  • Air Force pilot selection and the training program;

  • Bomber aircraft characteristics and how the bomber training program differed from the programs for other aircraft;

  • The challenges of long missions and managing fatigue and discomfort;

  • Todd’s personal stories of operational incidents and the importance of technical redundancy; and

  • Todd’s transition to the private sector and his role as a leader in Garmin’s Government and Defense Aviation Business Development.

undefined
Side view of the B-2 Spirit
Lt. Col. Todd Moenster, USAF, Retired
Lt. Col. Todd Moenster, USAF, Retired, and family in front of a B-2
Lt. Col. Todd Moenster, USAF, Retired, in the sky

Additional Reading & Listening

Curious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:

Enjoy this episode? Share it with someone who loves business history as much as you do!

You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.

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Disclaimer

All opinions expressed by Preferred Shares Hosts and guests are solely their own opinions and do not reflect the opinions of their current or former employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari Associates and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[Pool Corp. (POOL)]]>https://www.preferredsharespodcast.com/p/pool-corp-poolhttps://www.preferredsharespodcast.com/p/pool-corp-poolFri, 19 Sep 2025 11:11:31 GMTWelcome to Episode 25 of the Preferred Shares Podcast.

In this episode of the Preferred Shares podcast, Doug provides a brief history of Pool Corp. and an overview of the current business. The co-hosts discuss the pros and cons of the business and why it might be a “high quality cyclical” enterprise.

In This Episode

[01:11] Early History and Founding

[06:22] Current Market Position and Business Model of Pool Corp

[10:25] Growth Trends and Market Dynamics

[13:39] Financial Performance and Revenue Breakdown

[17:46] Management Structure and Company Culture

[20:13] Competitive Landscape and Market Challenges

[22:20] Investment Considerations and Future Outlook

[26:31] Doug Gives His Elevator Pitch

Additional Reading & Listening

Did you miss our series on Amphenol? Check it out below.

Curious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:

Enjoy this episode? Share it with someone who loves business history as much as you do!

You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.

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Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[The Untold Story of Amphenol: Part II]]>https://www.preferredsharespodcast.com/p/the-untold-story-of-amphenol-part-7d9https://www.preferredsharespodcast.com/p/the-untold-story-of-amphenol-part-7d9Mon, 21 Jul 2025 11:15:34 GMTWelcome to Episode 24 of the Preferred Shares Podcast.

In this episode of the Preferred Shares podcast, hosts Devin, Doug, and Lawrence interview Will Kerwin, a senior equity analyst for Morningstar, to provide a current overview of Amphenol.

In This Episode

[01:17] Guest Introduction and Background

[02:29] Exploring Amphenol’s History and Industry

[04:27] Amphenol’s Market Position and Competitors

[10:06] Amphenol’s Diverse End Markets

[11:59] Aerospace and Defense Opportunities

[14:05] Amphenol’s Unique Corporate Culture

[16:31] Capital Allocation Strategies

[17:53] Acquisition Strategies and Market Dynamics

[20:16] Product Diversity and Co-Designing with Customers

[25:55] Innovation and R&D Approaches

[30:26] Pricing Power and Competitive Advantages

[30:47] Talent Retention and Company Culture

[32:43] Identifying Headwinds and Market Challenges

[34:47] Long-Term Trends and Future Opportunities

[38:46] Profitability and Margin Analysis

[42:27] Supplier Relationships and Material Inputs

[43:29] Future Risks and Succession Planning

[47:11] Conclusion and Final Thoughts

Additional Reading & Listening

William Kerwin, CFA. Current coverage:

Did you miss Part 1 of our series on Amphenol? Check it out below.

Curious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:

Enjoy this episode? Share it with someone who loves business history as much as you do!

You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.

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Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[The Untold Story of Amphenol: Part I]]>https://www.preferredsharespodcast.com/p/the-untold-story-of-amphenol-parthttps://www.preferredsharespodcast.com/p/the-untold-story-of-amphenol-partFri, 11 Jul 2025 11:10:21 GMTWelcome to Episode 23 of the Preferred Shares Podcast.

In this episode of the Preferred Shares podcast, hosts Devin, Doug, and Lawrence delve into the history and significance of Amphenol, a leading manufacturer of connectors. They explore the company’s evolution from its founding in the 1930s, its pivotal role during World War II, and its transition into the consumer electronics market. The discussion covers Amphenol’s IPO journey, acquisitions, and the influence of private equity firm KKR on its growth strategy. The episode concludes with insights into the company’s culture and the legacy of its founder, Arthur J. Schmidt, highlighting the importance of innovation and adaptability.

In This Episode

[01:15] Exploring Amphenol: A Company of Significance

[01:57] The Fascinating History of Amphenol

[03:22] Amphenol’s Role in World War II

[08:00] Post-War Transition and Consumer Electronics

[09:01] The IPO Journey of Amphenol

[16:17] Acquisition by LPL and Challenges Ahead

[20:12] KKR’s Influence and Growth Strategy

[22:56] Amphenol’s Market Position and Strategy

[26:45] Cultural Insights and Leadership at Amphenol

[30:05] Legacy of Arthur J. Schmidt and Future Outlook

Images

Amphenol founder, Arthur J. Schmitt, circa 1953.
Amphenol ad in the February 25, 1952 edition of Aviation Week.
Amphenol ad in August 1952 issue of Electronics.

Sources

Books

Schaefer, Arthur J. Quest for Leadership: The Arthur J. Schmitt Story. Cathedral Publishing Company: Chicago, IL, 1985.

Videos & Podcasts

Additional Reading & Listening

Curious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:

Enjoy this episode? Share it with someone who loves business history as much as you do!

You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.

Subscribe now

Share

Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[The Evolution of Dry Cleaning with GreenEarth Cleaning's Tim Maxwell ]]>https://www.preferredsharespodcast.com/p/the-evolution-of-dry-cleaning-withhttps://www.preferredsharespodcast.com/p/the-evolution-of-dry-cleaning-withThu, 03 Jul 2025 12:50:45 GMTWelcome to Episode 22 of the Preferred Shares Podcast.

In this episode, we explore the evolution of the dry cleaning industry. To guide us, we are joined by Tim Maxwell. Tim is an industry veteran, having started working at his parent’s wholesale suede and leather cleaning business at age twelve and eventually founding a company that would ultimately disrupt the dry cleaning space; GreenEarth Cleaning.

In This Episode

[02:12] Tim’s background, the family business, education, and partnering

[03:05] The idea behind GreenEarth Cleaning

[03:45] Exiting the family business to pursue the new opportunity in 1999

[08:25] The dynamics of a durable, multi-generation family business

[14:40] Changing technologies in the dry cleaning space

[19:00] Industry headwinds, trends, and adaptation

[27:30] Additional margin pressures

[30:40] The rise of green cleaning methods

[44:20] Production, logistics, and the idea of being a partner rather than a vendor

[52:00] The ultimate winners and losers of industry evolution

Below, the Maxwell family is featured on the cover of FabricareCanada in 2005 celebrating 30 years of the family’s ownership of SuedeMaster. Tim had already left the family business in 1999 for the GreenEarth Cleaning opportunity.

Below is Tim Maxwell (center in green shirt) with a handful of GreenEarth Cleaning teammates.

Data

Sources

Articles

Additional Reading & Listening

Curious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:

Enjoy this episode? Share it with someone who loves business history as much as you do!

You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.

Share

Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[Beretta: 500 Years of Italian Exceptionalism]]>https://www.preferredsharespodcast.com/p/beretta-500-years-of-italian-exceptionalismhttps://www.preferredsharespodcast.com/p/beretta-500-years-of-italian-exceptionalismWed, 25 Jun 2025 11:23:14 GMTWelcome to Episode 21 of the Preferred Shares Podcast.

This episode of the Preferred Shares podcast delves into the rich history of Beretta, a company that has been a significant player in the firearms industry for over 500 years. The hosts explore Beretta’s origins in Italy, its evolution through various historical conflicts, and its adaptation to changing markets. We discuss the company’s commitment to quality, innovation, and the dynamics of being a family-run business. Beretta’s resilience makes it one of the most fascinating case studies in all of business history.

In This Episode

[01:10] The Legacy of Beretta: A 500-Year Journey

[03:30] The Rise of Gun Manufacturing in Italy

[09:46] The Evolution of the Arms Industry

[11:31] Beretta's Role in Historical Conflicts

[17:45] The Impact of War and Plague on Beretta

[22:07] Beretta's Growth and Adaptation in the 1700s

[25:30] Modernization and Expansion in the 19th Century

[29:49] Beretta in the 20th Century: War and Innovation

[34:05] Beretta's Rise in the U.S. Market

[38:44] The Shift in Revenue Sources

[42:25] Quality Control and Artistry in Firearms

[48:41] The Future of Beretta: Challenges and Innovations

[56:07] Family Business Dynamics and Longevity

Photos, Ads and Charts

Below is an advertisement for Beretta in the January 1893 issue of Folchetto. It translates as: “Hunters! If you want excellent weapons at very favorable prices, contact the Award-Winning Factory of PIETRO BERETTA in Gardone Valle Trompia…”

Photo of a portion of Beretta’s current gun museum.
1980 Moody’s International Manual showing FNH’s 1/3 ownership of Beretta. We also see that two Beretta family members were directors on the board: Ugo Gussalli and Pier Giuseppe Beretta.
Beretta ad in the 1993 edition of Gun Digest.
Beretta’s SO10 EELL retails for $150,000.

Sources

Books

  • Morin, Marco. Beretta: The World’s Oldest Industrial Dynasty. Acquafresca Editrice, 1980.

  • O’Hara, William T. Centuries of Success: Lessons from the World's Most Enduring Family Businesses. Avon, Mass.: Adams Media, 2004.

  • Wilson, R.L. World of Beretta: An International Legend. Chartwell Books, 2006.

TGS Outdoors Videos

A big shout out to Johnny Carter of TGS Outdoors for the fantastic videos of his tours of the Beretta factories.

Other Videos

Articles

Additional Reading & Listening

Curious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:

Enjoy this episode? Share it with someone who loves business history as much as you do!

You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.

Share

Subscribe now

Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[The Sweet, Storied Success of Lindt & Sprüngli]]>https://www.preferredsharespodcast.com/p/the-sweet-storied-success-of-lindthttps://www.preferredsharespodcast.com/p/the-sweet-storied-success-of-lindtThu, 15 May 2025 11:10:15 GMTWelcome to Episode 20 of the Preferred Shares Podcast.

We interviewed a special guest, Mark Purdy, about Lindt & Sprüngli, a Swiss chocolatier founded 180 years ago in 1845. Mark is a veteran investment analyst with a focus on consumer brands for the last forty years and is currently Portfolio Manager at Chelverton Asset Management’s Select Consumer Staples Fund.

In This Episode

Here are some highlights from the interview with Mark Purdy about Lindt:

  • 01:27 - Mark Purdy’s Background in Consumer Staples

  • 05:01 - Investment Metrics for Consumer Staples

  • 06:47 - Lindt’s Historical Success and Sales Growth

  • 10:37 - Lindt’s Premium Positioning and Market Strategy

  • 13:18 - Market Share Potential in the U.S. and Europe

  • 16:23 - Lindt’s Unique Retail Strategy and Store Performance

  • 19:12 - Sales Distribution Channels and Profitability

  • 22:30 - Acquisition Strategy and Capital Allocation

  • 25:22 - Buybacks and Dividend Policy

  • 29:37 - Long-Term Value and Consumer Staples Resilience

  • 33:31 - Economic Sensitivity and Market Performance

  • 36:22 - Navigating Economic Challenges: A Long-Term Perspective

  • 41:30 - Quality Over Short-Termism: The Lindt Philosophy

  • 44:20 - Cocoa Prices and Market Dynamics

  • 49:59 - Consumer Behavior and Premium Chocolate

  • 57:31 - Future Risks and Growth Opportunities for Lindt

Undated Lindt advertisement, likely from early 20th century.
Lindt GOLD BUNNY with baby bunny.
Lindt first introduced the now ubiquitous chocolate gold Easter bunny in 1952.
Sales mix by geography via Lindt’s FY2024 presentation.

Additional Reading & Listening

Curious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:

Enjoy this episode? Share it with someone who loves business history as much as you do!

You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.

Share

Subscribe now

Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[Texas Pacific Land Corporation: The Riches of Royalties]]>https://www.preferredsharespodcast.com/p/texas-pacific-land-corporationhttps://www.preferredsharespodcast.com/p/texas-pacific-land-corporationMon, 03 Mar 2025 12:35:39 GMTWelcome to Episode 19 of the Preferred Shares Podcast.

We interviewed a special guest, Chadd Garcia, about Texas Pacific Land Corporation (TPL). Chadd is a veteran investment analyst, has worked in private equity, and is currently Vice President & Portfolio Manager at Ave Maria Mutual Funds.

In This Episode

Here are some highlights from the podcast episode about Texas Pacific Land Corporation (TPL):

  • [1:52] – Chadd explains how he became interested in TPL.

  • [2:53] – TPL’s early history

  • [4:48] – Oil was discovered in West Texas in the 1920s, but fracking in the 2010s significantly increased the value of the land.

  • [6:17] – TPL’s decision to get in the water business to support fracking.

  • [11:12] – TPL’s unique shareholder base, comprised of long-term investors and Texas families.

  • [14:11] – The reasons for internally handling the water business.

  • [16:54] – The best way to assess TPL’s valuation, considering its unique advantages and potential call options.

  • [18:07] – Discussion about the potential of data centers in the Permian Basin.

  • [23:00] – Chadd shares his view that management would be better off allocating capital to share repurchases.

  • [31:04] – Chadd is generally not a fan of TPL acquiring royalties.

  • [36:14] – Discussion of how and why TPL recently became a corporation after being a trust for over 130 years.

  • [38:09] – Chadd shares some concerns with management’s compensation structure.

  • [40:22] – Appropriate incentive schemes for royalty companies.

1873 map showing the lines and lands of the Texas and Pacific Railway
1903 Poor’s Manual entry for TPL
The New York Times, December 16, 1926
The New York Times, June 8, 1927
30-year total returns of TPL vs. SPY
TPL February 2025 investor presentation

Additional Reading & Listening

Curious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:

Enjoy this episode? Share it with someone who loves business history as much as you do!

You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.

Share

Subscribe now

Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[Convair: The Rise and Fall of an Aerospace Titan - Part 2]]>https://www.preferredsharespodcast.com/p/convair-the-rise-and-fall-of-an-aerospacehttps://www.preferredsharespodcast.com/p/convair-the-rise-and-fall-of-an-aerospaceMon, 17 Feb 2025 12:34:06 GMTWelcome to Episode 18.

In this episode, Doug picks up the story from where we left off in Part 1: its November 1941, when Consolidated Aircraft founder Reuben Fleet decides to sell his personal stake in the company. Doug then shares how Consolidated became Convair, was then acquired by General Dynamics, its disastrous foray into the commercial jetliner market, and its eventual demise in the mid-1990s.

In This Episode

  • (01:26) Reuben Fleet and his decision to sell Consolidated Aircraft.

    • (03:43) Fleet sells his entire personal stake in 1941.

    • (07:53) In 1943, Consolidated merges with Vultee Aircraft and becomes Convair.

    • (09:51) Reasons behind the sale.

  • (13:01) Rapid growth and decline of the aviation industry during and after World War II.

  • (14:50) Floyd Odlum and Atlas Corporation acquire a significant stake in Convair.

  • (16:04) Convair’s success in the 1950s.

    • (17:40) The B-36 bomber's development during World War II and its features, including its long-range capabilities and large crew, are described.

  • (20:01) General Dynamics acquires Convair in a two-step process.

  • (25:56) Convair gambles with Howard Hughes and the development of the Convair 880 jetliner.

    • Hughes runs into financial trouble and causes delays.

    • Convair eventually declares the largest losses in business history in the early 1960s due to its failed efforts in the commercial jetliner business.

  • (37:51) Henry Crown takes charge of General Dynamics to address losses from the Convair program.

  • (38:35) Convair shifts focus and becomes a subcontractor for the big commercial jetliners and also concentrates on its rocket and missile businesses.

  • (39:56) The defense industry consolidation in the post-Cold War era.

  • (42:21) General Dynamics sells off pieces of its Convair business and eventually shuts it all down.

  • (53:06) Reflection on Convair’s decline.

  • (57:42) The difficulty for defense companies trying to venture into the commercial space.

  • (65:14) Upcoming episodes.

1943, the year in which AVCO’s Vultee Aircraft merged with Consolidated Aircraft to become Convair
1951 TIME magazine advertisement for the B-36 bomber
Convair’s B-36 long range bomber, unofficially named “Peacemaker”
Photo of Jay Hopkins (circa 1950s), Chairman and leader of General Dynamics, the “financial genius” who transformed Electric Boat.
Artwork of Convair 880 jetliner from the July 1957 magazine Convair Traveler
Convair ad in the August 22, 1958, edition of Aviation Week magazine showing off the B-58 Hustler, the first bomber capable of Mach 2 flight
1960 General Dynamics ad for the Convair 880
Howard Hughes, the wealthy eccentric who helped cause enormous losses at Convair in the early 1960s

Resources

Periodicals

Articles

Books

  • Sweetman, William. A History of Passenger Aircraft. London: Hamlyn Publishing, 1979.

  • Steele, James B. Howard Hughes: His Life and Madness. New York: W.W. Norton, 1979

Videos and Podcasts

Additional Reading

Enjoy this episode? Share it with someone who loves business history as much as you do!

You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.

Subscribe now

Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Lawrence Hamtil and clients of Fortune Financial owned the securities of Lockheed Martin and Martin Marietta at the time of this publication. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[Convair: The Rise and Fall of an Aerospace Titan]]>https://www.preferredsharespodcast.com/p/consolidated-aircraft-and-reubenhttps://www.preferredsharespodcast.com/p/consolidated-aircraft-and-reubenWed, 05 Feb 2025 12:49:01 GMTWelcome to Episode 17 of the Preferred Shares Podcast.

In this episode, Doug shares his research on the early years of Consolidated Aircraft and its founder, Major Reuben Fleet. Consolidated became one of the major aircraft makers during World War II with its B-24 Liberator bomber and its Catalina flying patrol boat.

In This Episode

  • Introduction [00:05]

    • Podcast on business history, focusing on Convair’s story.

    • Convair’s contributions during WWII will be a key topic.

  • Reuben Fleet’s Early Life and Career [03:30]

    • Born in 1887, experienced poverty, displayed business acumen.

    • Instrumental in early aviation legislation in Washington and set up the first U.S. Air Mail service.

  • Transition to Aviation Business [11:30]

    • Resigned from the Air Service to pursue business ventures.

    • Turned around Gallaudet Aircraft.

  • Formed Consolidated Aircraft Corporation and acquired Dayton-Wright. [18:20]

    • Established key business principles focusing on quality and safety.

  • Early Challenges and Growth of Consolidated [24:40]

    • Sold trainer planes to Army and Navy.

    • Battled with the military over profit limitations.

    • Promoted loyalty by selling shares to key employees.

  • Expansion [31:00]

    • Formed Fleet Aircraft and Tonawanda Products Corporation.

    • Consolidated went public in 1929.

    • Weathered the Great Depression with support from military contracts.

  • Innovation and Advocacy [39:00]

    • Won the largest Navy contract to date for airplanes with its “Catalina” PBY flying boat.

    • Fleet advocated for design rights and cost-plus contracts.

    • Explored innovative aircraft load capacity ideas, including in-flight fueling and jet-assisted takeoff.

  • World War II and Massive Expansion [43:30]

    • Developed the B-24 Liberator bomber, which became the most produced bomber ever.

    • Consolidated experiences massive growth.

    • The plant in Fort Worth, Texas had the world’s longest assembly line.

  • Manufacturing Quality [53:00]

  • Fleet decided to sell the business in late 1941 [61:00]

    • Listeners are encouraged to tune in to Part Two for more details.

Major Reuben Fleet, the pilot.
Major Reuben Fleet, the businessman, in 1938.
January 31, 1929 advertisement of Consolidated’s public offering.
Source: Moody’s manuals and Consolidated Aircraft annual reports
Source: Office of Chief of Naval Operations and War Department, Finance Division
Source: “The Structure and Performance of the Aerospace Industry” by Herman O. Stekler.
Reuben Fleet on the cover of TIME magazine, November 17, 1941
“Nothing Short of Right is Right” painted in 9-foot letters across the San Diego plant of Consolidated
Consolidated’s Forth Worth, TX plant, which had the world’s longest assembly line during WWII.
B-24 Liberators flying under fighter cover of P- 38’s on strategic bombing mission to destroy Germany’s oil resources in Poland.

Episode Resources

Books

  • Wagner, William. Reuben Fleet and The Story of Consolidated Aircraft. Fallbrook, CA: Aero Publishers, 1976.

  • Convair Aerospace Division of General Dynamics: Fiftieth Anniversary. General Dynamics Corporation, St. Louis, 1973.

  • Jenkins, Dennis R. Magnesium Overcast: The Story of the Convair B-36. Specialty Press (MN), 2005.

  • Sweetman, William. A History of Passenger Aircraft. London: Hamlyn Publishing, 1979.

  • Millbrooke, Anne Marie. Aviation History. Jeppeson Sanderson: Englewood, CO, 1999.

Articles from Newspapers and Periodicals

Additional Reading

Curious to see what else we’ve been working on? Below are some pieces we’ve written independently that we think you’d like:

Enjoy this episode? Share it with someone who loves business history as much as you do! And follow it up with Part 2 in the series.

You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.

Share

Subscribe now

Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[Tyler Technologies: Big Fish, Small Pond]]>https://www.preferredsharespodcast.com/p/tyler-technologies-big-fish-small-pondhttps://www.preferredsharespodcast.com/p/tyler-technologies-big-fish-small-pondMon, 23 Dec 2024 13:23:04 GMTWelcome to Episode 16 of the Preferred Shares Podcast.

In this episode, Douglas Ott walks us through the origin story of Tyler Technologies to the present day.

In this episode

  • Introduction to Tyler Technologies [0:00-1:40]

    • Tyler Technologies is described as a “big fish in a small pond,” focusing on software solutions for municipalities and state/local governments.

    • The market is around $24 billion in total revenue, which is too small for larger tech companies but provides a good opportunity for Tyler.

    • Tyler's competition is typically small, private, unscaled players.

  • Early History as an Industrial Conglomerate [1:40-3:30]

    • Tyler’s history began in the late 1960s with Joseph McKinney, who formed a venture capital business.

    • McKinney formed Saturn Industries, acquiring several small businesses, then acquired Tyler Pipe in 1968, changing the company name to Tyler Corporation.

    • Over two decades, Tyler acquired various businesses including a trucking company, an explosives company, a specialty chemicals company, and an electronics distributor.

    • By 1987, Tyler reached $1 billion in revenues.

  • Divestment of Holdings [3:30-4:30]

    • In the late 1980s, McKinney started selling Tyler’s holdings, distributing over $400 million to shareholders by the mid-1990s.

    • By 1995, none of the former companies remained at Tyler Corporation, leaving a cash shell holding company.

  • Downturn and New Acquisitions [4:30-5:30]

    • McKinney acquired Forest City Auto Parts and Institutional Financing, which were different from Tyler’s B2B industrial focus.

    • These acquisitions performed poorly, leading to a $52 million write-down and McKinney’s departure by the end of 1996.

  • New Leadership and Strategic Shift [5:30-6:30]

    • Bruce Wilkinson was hired, aiming to return Tyler to its industrial roots.

  • Louis Waters acquired a 10% stake in Tyler and advocated for a shift to software and information services.

  • Louis Waters and Browning-Ferris Industries [6:30-9:30]

    • Waters co-founded Browning-Ferris Industries (BFI), a waste management company, and saw similarities between the fragmented waste management industry and the software market for local governments.

    • BFI grew rapidly through acquisitions due to new environmental regulations.

    • Waters saw a similar opportunity in the software space for municipalities.

  • Tyler’s Pivot to Software [9:30-11:00]

    • Waters won the debate, Wilkinson resigned, and Tyler began acquiring software companies.

    • By the end of 1997, Tyler acquired three software companies and stated its plan to consolidate the information industry for local governments.

    • In 1998, they made four more acquisitions for $90 million.

    • Tyler sold Forest City and Institutional Financing at a loss.

  • Acquisition of Munis and Key Personnel [11:00-12:00]

    • In 1999, Tyler acquired Munis, an ERP and land information management systems company.

    • The acquisition of Munis also brought in John Marr, who became CEO of Tyler in 2004 and later executive chairman.

  • Significant Acquisitions [12:00-14:00]

    • New World Systems was acquired in 2015 for $670 million, providing software for dispatchers, first responders, and financial management for state and government agencies.

    • Micropact was acquired in 2019 for $185 million, marking Tyler's foray into the federal customer segment.

    • NIC was acquired in 2021 for $2.3 billion; NIC designed and implemented websites for states and their agencies and was a payment processor specializing in state government payments.

  • Market Share and Financial Performance [14:00-15:00]

    • Tyler’s market share is estimated to be in the low teens, with significant opportunity for growth.

    • The company has experienced high-teen revenue growth and free cash flow compounding north of 20%.

    • Recurring revenues are north of 80% based on subscriptions and maintenance.

  • Market Dynamics [15:00-17:00]

    • There are over 88,000 government entities in the US.

    • These entities have similar service needs but different rules and processes.

    • There is a constant need to modernize outdated software and IT systems.

    • Population growth and new regulations drive additional transaction growth.

  • Business Qualities [17:00-18:00]

    • Tyler’s current market share is 15% of a $13 billion market, with a total addressable market of $24 billion.

    • The market is highly fragmented, with many small, uncompetitive software companies.

    • Tyler is the only publicly traded company focused on this government software niche.

  • Countercyclical Nature [18:00-19:00]

    • Government grants for modernization benefit companies like Tyler.

    • The business is stable, funded by real estate taxes.

  • Customer Base and Revenue [19:00-20:00]

    • Tyler has a 98% client retention rate.

    • There is a need to replace old software systems.

    • Tyler replaced a 40-year-old court judicial system in Cook County, Illinois.

  • Capital Allocation [20:00-23:00]

    • Tyler has been selective and opportunistic with share repurchases.

    • From 2002 to 2011, Tyler reduced its shares from 48 million to 30 million, but it is now back up to 43 million.

    • They issued shares to fund acquisitions and attract/retain talent.

  • Potential Threats [23:00-27:00]

    • A major threat is prioritizing operating margins over customer service, which could lead to customer dissatisfaction.

    • With cloud-based software, customers might find it easier to switch to competitors if not satisfied.

  • Acquisition Strategy [27:00-30:00]

    • Tyler tends to expand capabilities rather than consolidate specific niches, such as acquiring a jury selection software company that complements their existing court system products.

    • They focus on smaller, bolt-on acquisitions, which are less risky than transformational ones.

  • Comparison to Roper Technologies [30:00]

    • Both Tyler and Roper were formerly industrial companies that transitioned into the software space.

    • Tyler’s move was driven by Waters’ belief in the specific government software market, while Roper's was a longer evolution based on financial characteristics like recurring revenue.

  • Risks: Mission Creep and Lack of Focus [31:00-33:00]

    • A key risk is losing focus by pursuing growth in other areas rather than sticking to their niche.

    • Trying to go too hard into the federal space could be a risk.

  • Opportunities in Fragmented Market [33:00-35:00]

    • Many small businesses in the space may be looking for a buyer.

    • Constellation Software is also acquiring smaller niche businesses but has not taken a cohesive approach like Tyler.

  • Private Equity Competition [35:00-36:00]

    • Private equity firms have been in this space, but their high leverage could make them less stable competitors.

  • Conclusion [36:00]

Tyler Technologies, 1999 Annual Report, Page 7

Episode Resources

Additional Reading

Curious to see what else we’ve been working on? Below are some pieces we’ve written independently that we think you’d like:

“Imperial Brands: Doubt-Driven”, Devin LaSarre (Invariant) published December 2024.

“A Few Thoughts On Diversification Strategies”, Lawrence Hamtil (Fortune Financial) published October 2024.

Enjoy this episode? Share it with someone who loves business history as much as you do!

You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.

Share

Subscribe now

Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[Chain Restaurants and the Interstate]]>https://www.preferredsharespodcast.com/p/chain-restaurants-and-the-interstatehttps://www.preferredsharespodcast.com/p/chain-restaurants-and-the-interstateMon, 28 Oct 2024 19:40:24 GMTWelcome to Episode 15 of the Preferred Shares Podcast.

In this episode—another in our series on the beneficiaries of the spending on the interstate highway system of the United States—we take turns discussing Howard Johnson’s, McDonald’s, and KFC.

In this episode

  • The Johnson’s family cigar business

  • Howard Johnson quitting school at age 12

  • Worked at a drug store until buying it out, expanding sales

  • Johnson’s ice cream becomes hugely popular

  • Great Depression forces a pivot - franchises

  • WWII forces more changes

  • 1959 IPO and continued growth

  • 70’s struggles leading to an eventual buyout by Imperial Group PLC in 1979

  • Imperial eventually sells to Marriott in 1985

  • The first McDonald’s

  • Revamps, simplifications, and innovations

  • Ray Kroc’s entrepreneurial spirit

  • Kroc drops out of school at age 15

  • Countless business ideas and odd jobs

  • The Silent Night club’s simplified menu leaves a lasting impression

  • Becoming a disposable cup salesman

  • Cups leading Ray to Prince Castle and the Multimixer

  • WWII almost killing the mixer industry due to copper constraints

  • The Multimixer leading Ray to the McDonald brothers

  • An immediate realization of opportunity

  • Rapid expansion due to Harry Sonneborn, Franchise Realty Corp, mass marketing of automobiles, post-war suburbanization, the GI Bill, and the continued buildout of the interstate highway system

  • McDonald’s 1965 IPO and beyond

  • Harland Sanders tough upbringing in rural Indiana

  • Leaving home at age 12

  • A passion for cooking mixed with a a highway service station

  • Sanders’ special way to make fried chicken

  • Interstate 75 killing Sanders’ first restaurant

  • At age 66, Sanders starting over again to by creating franchises in a unique way

  • The 1964 sale of KFC and then 1969 IPO

  • Acquired by R.J. Reynolds, then RJR Nabisco, then sold to Pepsi in 1986

  • KFC spun off in 1997, and KFC China spun off as Yum China in 2016

  • Our takeaways

1969 Highway Statistics, U.S. Department of Transportation
ArcGIS Interactive map, Interstate Highway System, McDonalds Locations, Continental United States
KFC, Kuwait City, 1980, Miranda Kopetzky
Colonel Sanders’ business card, late 1940s
Life Magazine, 7/2/1951, Vol 32 no. 1

Episode Resources

Additional Reading

Curious to see what else we’ve been working on? Below are some pieces we’ve written independently that we think you’d like:

"Going South: Implications of Business and Population Migration", a whitepaper by Douglas Ott (Andvari Associates) and Lawrence Hamtil (Fortune Financial) published June 2024.

“A Few Thoughts On Diversification Strategies”, Lawrence Hamtil (Fortune Financial) published October 2024.

Enjoy this episode? Share it with someone who loves business history as much as you do!

You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.

Share

Subscribe now

Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[Marc Levinson on The Great A&P]]>https://www.preferredsharespodcast.com/p/marc-levinson-the-great-a-and-phttps://www.preferredsharespodcast.com/p/marc-levinson-the-great-a-and-pFri, 11 Oct 2024 12:11:48 GMTWelcome to Episode 14 of the Preferred Shares Podcast.

In this episode, Preferred Shares explores the evolution of grocery retailing in the United States with a focus on the rise of A&P, it becoming the largest retailer in the world, and the company’s ultimate demise. To help tell this story, there is no better expert than historian, author, and economist Marc Levinson, author of The Great A&P and the Struggle for Small Business in America. Levinson has authored several other books, including The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger, and has contributed to reputable publications such as Time magazine, The Economist, Newsweek magazine, and Harvard Business Review.

In this episode

  • A&P tea distribution

  • The grocery retail landscape in the late 19th century

  • Spices, baking powder, and the rise of branded goods

  • Packaging innovations

  • Wholesaler influence and control over grocers

  • Kroger, Albertsons, and Grand Union all began as tea companies

  • Perishable vs stable goods

  • Early store dimensions - 20 ft x 25 ft

  • Manufacturer-set pricing, markups and ‘fair pricing’

  • Chain stores gaining bargaining power

  • A&P Economy stores - bare-bones, limited selection, rock-bottom prices

  • Rethinking profitability, inventory turnover, margins versus returns

  • A&P’s vertical integration efforts, including dairies, canneries, macaroni and cocoa factories, and more

  • Scaling bargaining power

  • What does ‘fair price’ mean? The counterargument that discounting is actually harmful to consumers over the long run

  • Advantages of private company vs. being public

  • Long-term perspective

  • State and federal efforts aiming to crush chain stores

  • Fixed prices, scaling chain taxes, and targeted restrictions

  • Weighing regulation and innovation

  • Anti-trust case against A&P

  • Pressures closing A&P’s discount gap and eroding its reputation

  • Strain from a lack of distinct succession plan and ability to adapt

  • Pressures from being public to produce dividends rather than reinvest and reinvigorate the business

  • Our post-interview discussion

A&P Supermarket, Public Domain via Creative Commons, 1938
The Great Atlantic & Pacific Tea Co., East Main St., Brevard, NC, via Transylvania County Library
Ad for Eight O’Clock Coffee, Great Atlantic & Pacific Tea Co., Public domain, 1922
Nelson Dionne Salem History Collection, Salem State University Archives and Special Collections
Photo, Public Domain, New York Public Library via Creative Commons
Stock certificate for The Great Atlantic & Pacific Tea Company

Episode Resources

Additional Reading

Curious to see what else we’ve been working on? Below are some pieces we’ve written independently that we think you’d like:

Book Review: The Great A&P and the Struggle for Small Business in America by Marc Levinson, Lawrence Hamtil, 4/1/2021

“Excising the Old”, Part III in a three-part series on IBM’s electric typewriter and computer printer division, Douglas Ott, 10/6/2024

Enjoy this episode? Share it with someone who loves business history as much as you do!

You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.

Share

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Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

]]><![CDATA[Rae Maile: A Lifetime in Tobacco]]>https://www.preferredsharespodcast.com/p/rae-maile-a-lifetime-in-tobaccohttps://www.preferredsharespodcast.com/p/rae-maile-a-lifetime-in-tobaccoFri, 27 Sep 2024 12:17:46 GMTWelcome to Episode 13 of the Preferred Shares Podcast.

We interviewed our friend and special guest, Rae Maile. Rae is a veteran analyst, currently Managing Director of Research at Panmure Liberum, who has covered the tobacco industry for over 35 years. He has never held back his strong opinions, and always has the data to support them.

In this episode

  • Rae’s background in financial services, from junior analyst covering brewers and general retail to financials and tobacco

  • How the tobacco industry has changed and stayed the same

  • The perpetual lack of confidence about the tobacco industry - both from external analysts as well as industry executives

  • Population growth’s ‘denominator effect’ within price versus volume

  • Next-gen nicotine products in the industry landscape

  • Global demand for nicotine rising

  • Differences across markets and categories concerning barriers to entry, regulation, and adoption

  • The anti-smoking lobby’s morphing into anti-nicotine

  • Taxation, prohibition, and illicit trade

  • Moral zealotry battling against the individual’s choice

  • ESG-based investing and idle threats

  • Over the last century, tobacco is the only industry that hasn’t had a negative 10-year period. What makes the industry so special?

  • Should tobacco be placed next to other CPGs, or is it in a separate league?

  • When it comes to tobacco, why do so many analysts obsess over volumes and disregard other critical variables?

  • What distinguishes a great analyst? Skills needed and the psychology of markets

  • Rae’s unique writing style. Finding your voice and filling your role

  • Lessons from Marlboro Friday and price laddering models

  • The UK market post-Brexit

  • Perpetual pessimism versus share repurchase programs, dividends versus share repurchases, and capital allocation frameworks

  • The industry’s history of poor diversification efforts

  • Surrendering to the science, forgetting the consumer

Rae Maile’s office wall

Episode Resources

Additional Reading

Curious to see what else we’ve been working on? Below are some pieces we’ve written independently that we think you’d like:

Discussing Going Down Tobacco Road with Gene Hoots, Lawrence Hamtil (Fortune Financial) published September, 2020

Assessing Altria and Tobacco Fundamentals Five Years After the Peak, Lawrence Hamtil (Fortune Financial) published March, 2023

The New Era of Nicotine, Devin LaSarre (Invariant) published July, 2022

Andvari Q1 2024 letter regarding Altria, Douglas Ott published April, 2024

Imperial Brands: Looking Through the Noise, Devin LaSarre (Invariant) published October, 2023

Philip Morris International: More More More, Devin LaSarre (Invariant) published February, 2024

Altria: Back to the Race, Devin LaSarre (Invariant) published August, 2024

Enjoy this episode? Share it with someone who loves business history as much as you do!

You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.

Share

Subscribe now

Disclaimer

All opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.

Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast.

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