RESEARCHINVESTMENT CASES

Our signature deep-dive research reports

In our 2Xideas Investment Cases, we provide a detailed analysis on why we expect the respective stock to double over the next 5 to 7 years.
We constantly monitor our Investment Cases and publish a Case Update whenever there are material developments.

ASML

Information Technology

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ASML is one of the world’s leading manufacturers of microchip- making equipment. The Company specializes in lithography systems and the corresponding process control technology. Currently, the industry is at the start of a transition from the well-established "immersion deep ultra violet" (DUV) lithography to "extreme ultraviolet" (EUV) lithography, which is a key technology for future shrinking transistor size. ASML is the leader in both technologies.
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Log Book - ASML Investor Day November 2018

Trip.com

Consumer Discretionary

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Trip.com (formerly Ctrip) is the leading Online Travel Agent (OTA) in China. The Company provides customers with an online booking platform for travel related services, including transportation, accommodation, and packaged tours. In 2016, Trip.com generated revenue of CNY 19.2bn (USD 2.8bn). Trip.com operates primarily as an agent rather than a merchant. In an agency model, an OTA acts as an intermediary and does not take inventory risk.
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ResMed

Health Care

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ResMed is a US-based global medical device manufacturer. It is the pioneer and global leader in the treatment of sleep apnea. By means of an innovation-oriented culture, ResMed has brought sleep apnea treatment to the digital age, resulting in improved patient outcomes at a reduced cost. Recent investments in Software-as-a-Service strengthen ResMed’s competitive position, by helping its HME clients thrive in a challenging reimbursement environment and by lowering costs in the increasingly important out-of-hospital sector.
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Sensata

Industrials

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Sensata is one of the world's largest designers and manufacturers of engineered sensors for automotive vehicles. The Company achieves industry-leading organic sales growth of 4.5%–5.5% p.a. through the cycle. Sensata is the most profitable and fastest-growing company in its industry, as its sensor portfolio is well-positioned to benefit from regulatory trends in emission control and structural changes in automotive manufacturing. Given Sensata’s outstanding competitive position, we expect this to last for a long time.
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Thermo Fisher Scientific

Health Care

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Thermo Fisher Scientific ("TMO") is the world's largest company in the analytical and life science tools industry. These tools are used in laboratories to perform analyses of materials, compounds and life science ingredients in scientific, research and development, as well as testing and quality control environments. Servicing the instruments and providing consumables represents a major source of recurring revenues for TMO. In 2017, 65% of the Company’s revenues were recurring.
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Verisign

Information Technology

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Verisign is a global leader in Domain Names and Internet Security. The Company operates key parts of the Internet Infrastructure and is the world's largest registry operator. Registry operators are the "wholesalers" of the Internet domain names, while domain name registrars act as the "retailers", working directly with businesses and consumers to register domain name addresses.
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Tsuruha

Consumer Staples

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Tsuruha is a domestic Japanese drugstore retailer, operating 1,700 retail outlets selling non-prescription drugs, cosmetics and various household products. In addition, Tsuruha also offers prescription pharmaceuticals through 417 in-store and standalone pharmacies.
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MSCI

Financials

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MSCI provides performance and risk tools to both money managers and financial asset owners. The Company operates the “MSCI” brand for its equity indices and its ESG data offerings. The “RiskMetrics” and “Barra” brands are used for its analytics offering. MSCI’s business model is very robust with a high level of recurring revenues. Combining the various business lines, MSCI generates recurring subscription revenues that amount to 74% of total revenues with recurring asset-based fees contributing a further 24%.
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Markel

Financials

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Markel is a US-based property and casualty ("p/c") insurance company with a focus on complex and hard-to-place specialty p/c risks. In addition to its insurance activities, Markel owns a portfolio of non-insurance businesses and invests a major portion of its capital base in equity securities. The Company is exceptional because of its ability to allocate capital rationally between insurance underwriting, non-insurance acquisitions, and equity investments.
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Fastenal

Industrials

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Fastenal is a leading US high-service distributor of threaded fasteners, or “nuts and bolts”, and of non-fastener MRO products. The Company has established deep customer relationships. Uniquely, Fastenal fully controls last mile logistics through onsite operations and vending on the customers’ premises. Sustainable business economics are driving Fastenal’s high organic growth. Thanks to operating leverage and tight productivity management, profitability and returns on capital are bound to rise significantly over the next five years.
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Compass

Consumer Discretionary

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Compass is the world's largest contract caterer. Contract catering is business-to-business catering on a large scale, such as for schools, hospitals, entertainment venues and nursing homes. Sales in the Company’s fiscal year 2017, ending in September 2017, amounted to GBP 23bn. The Company is based in the UK and employs more than 550,000 people in around 50 countries.
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IPG Photonics

Information Technology

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IPG Photonics ("IPG") is the global leader in fiber laser technology. Fiber lasers produce laser light within speciality optical fibers, and are an alternative and superior technology to traditional crystal and gas lasers such as YAG (Yttrium Aluminum Garnet) and CO2 lasers. The key market for IPGP’s fiber lasers is materials processing, which includes a diverse range of processes such as cutting, marking, engraving, welding, brazing, hardening and 3D-printing of metals and other materials. Overall, materials processing accounts for over 80% of IPGP’s revenues.
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Ansys

Information Technology

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Ansys develops and markets the globe's leading engineering simulation software. The Company's software allows R&D engineers to predict the performance and real world behavior of components and products at an early stage of development, typically before building a first prototype. The Ansys software package is an integrated platform with a broad set of simulation capabilities.
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Ansys Log Book
September 2017

McCormick

Consumer Staples

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Founded in 1889, McCormick is a global leader in flavor manufacturing, distribution and marketing. The Company produces a variety of spices, seasoning mixes, and herbs and distributes them in over 150 countries. McCormick is divided into two segments: Consumer and Industry. The company’s two largest customers are Wal-Mart and Pepsi Co, each representing 11% of group revenue. In the Consumer segment, McCormick has over 25 different brands in its product portfolio. McCormick is the Groups largest and most popular brand.
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Company Log Book

Wabtec

Industrials

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Wabtec is one of the world’s largest providers of engineered components for the rail transportation market. The Company will double in size in Q1 2019 as the merger with GE Transportation closes, generating sales of USD 8bn. Wabtec will also become the global leader in the manufacturing of diesel-electric freight locomotives. Wabtec continues to grow the highly profitable aftermarket business, derived from a captive installed base. Furthermore, Wabtec is a successful industry consolidator. Thanks to high barriers to entry, we believe that Wabtec’s outstanding profitability is sustainable.
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Huazhu

Consumer Discretionary

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Founded in 2005, the Huazhu Group ("Huazhu") is a leading multibrand hotel group operating in China. The Company is focused on the economy and midscale segments and does not compete directly with the well-established four- and five-star international chains in the upscale and luxury segments. The Company operated 11 branded hotel chains totaling over 3,700 hotels with 379,000 rooms in 2017.
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Novozymes

Materials

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Novozymes is the world’s largest developer and producer of industrial enzymes, with a market share of almost 50%. In addition to enzymes, the Company also supplies microorganisms and biopolymers. Novozymes sells its proprietary enzyme and microbial solutions to food producers, detergent manufacturers and pharma companies.
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Coloplast

Health Care

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Coloplast is the global leader in the ostomy and continence care markets. The Company also participates in the urology and wound-care markets, where it is less significant in size. In general a nurse or doctor decides which branded product the patient will be using and once comfortable with the product, patients hardly ever switch. In the fiscal year to September 2018, Coloplast generated DKK 16.4bn (USD 2.6bn) of sales.
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Masimo

Health Care

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Masimo is an American medical technology company that designs, develops, and markets noninvasive patient monitoring solutions. The Company's monitors are used to measure blood oxygen concentration and the pulse rate, among other vitals. The Company has over 4,500 employees and reported sales of USD 858mn in 2018, generating an operating margin of 24.5%.
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Intercontinental Exchange

Financials

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Intercontinental Exchange (“ICE”) is a global operator of regulated exchanges and clearing houses, and a leading provider of financial data services. ICE operates 12 exchanges, 6 clearing houses and 4 OTC markets. In trading and clearing, ICE specializes on futures contracts, leading the global market in energy futures. The data services business focuses on fixed income instruments, where ICE dominates the global market for evaluated bond pricing data. We believe that ICE’s strong profitability is sustainable thanks to superior technology and near-monopolistic market positions.
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IMCD

Industrials

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IMCD is the no. 2 specialty chemicals distributor worldwide, providing third-party marketing, sales, and distribution services on behalf of specialty chemicals manufacturers under an outsourcing model. The Company achieves industry-leading organic revenue growth of 5.0% p.a. through the cycle. Acquisitions are a core part of IMCD’s strategy, resulting in total revenue growth of 9-10% p.a. IMCD is the most profitable and fastest-growing company in its industry. Given IMCD’s outstanding competitive position, we expect this to last for a long time.
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Align Technology

Health Care

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Align Technology (ALGN US) is the global market leader in clear aligners. Orthodontists and general dentists use the Company’s solutions to straighten patient’s teeth, and clear aligners have been displacing traditional braces. Align’s R&D investments over the last decade have resulted in proprietary technology and treatment planning that boost treatment efficacy, giving the Company a competitive advantage over other clear aligner manufacturers.
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Aspen Technology

Information Technology

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Aspen Technology (“AspenTech”) is the leading provider of optimization software used during design, simulation, operation and maintenance of complex industrial plants. The Company’s software is based on so-called “first principles modeling.” This means that it incorporates fundamental laws of chemistry and chemical reactions in a process plant. The Company primarily sells into process industries such as refining, chemicals and power generation. The Company emerged from a joint research project of MIT and the US Department of Energy in 1981 and is headquartered in Bedford, MA.
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