MIDD

Hi Saul,

I’m a follower of your posts as well, and I just want to point out that based on your investing choices, it seems that Middleby fits your criteria very well. I believe it is the best of both worlds – the growth prospects of a fast grower with a rock solid moat. I only recently realized how strong its moat is when listening to one of the TMFers talk about it. I wish I had the link to that handy.

The only thing is that it doesn’t have quite the 30% past growth you look for, but the numbers are close. I love this pick because it’s one of the least risky fast growers out there both in revenue and EPS.

Carl

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MIDD to me seems like an early-stage Sysco (SYY). Not so much a momentum stock but one that should perform really well for the LTBH crowd.

Saul - why no DDD or SSYS in your port?

Fdoubleol

Carl,

I was in MIDD some years ago when it was first recommended but I’ve been out for some time and don’t follow it.

I do invest in some slow but steady growers, like WAB which I’m also Ticker Guide for. It’s Westinghouse Air Brakes and makes brakes and lots more for trains. Not very exciting, right? But it’s the ONLY stock on any exchange in the US which has been up for every one of the last 13 (or is it 14 now?) years, since the beginning of the century. This year it was up a lot (over 65% I think).

Also, when I bought into YHOO a year ago, I never dreamt how much it would go up in the past year (about 100%). It’s often hard to predict.

Saul

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fdoubleol,

Saul - why no DDD or SSYS in your port?

I bought a good size position in SSYS a year and 10 months ago at $50 and sold out of it about 3-4 weeks ago at $120. I just thought the price was too high for the kind of growth they were having. I could be very wrong.

I had a position in DDD which I sold out of last April for a bunch of reasons. Clearly I was wrong, as it has continued up without me. My reasons, which I wrote down at the time, were:

A. the slower growth in the previous quarter, which made me doubt the high PE ratio

B. the issue of how much organic growth they have, if any, which they couldn’t seem to get answered right quarter after quarter, and which angered the analysts on the conference call.

C. the fact that they have lots of debt while SSYS has none, which seems to me to put DDD at a disadvantage, especially…

D. if they need to make more acquisitions to grow and no longer have overpriced shares they can use to acquire other companies, it will be harder to borrow more money. They will thus have to use cheap shares, which will be dilutive.

E. The founder had just sold half (0.5 million shares) of his total position into a collapsing market for the stock, certainly not showing much confidence.

As I said, the stock went on up anyway.

My exposure to 3D printing is now limited to Arcam.

Saul

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