Speedwell Weekly Recap
Speedwell Weekly Recap
Edition #8: New RH Podcast, Overlapping Circles, FND Reports, Magnetic Hurdle Rates, Meta Myths Dispelled
This is a series where we compile some of the best content we put out each week. You can expect to get a mix of interesting and insightful takeaways on various businesses and investing! Follow us at @speedwell_llc and @kevg1412 on Twitter, or @speedwell_research and @kevg1412 on Threads for more timely updates!
Podcast
RH: From Near Bankruptcy to Multi-billion Dollar Luxury Retailer
In case you missed it, last week we launched our very own podcast, The Synopsis! In Episode 1, we covered Meta Platforms (Apple Podcasts, Spotify).
This week, we released Episode 2 on RH (Apple Podcasts, Spotify).
In this episode, Speedwell Research covers everything from RH’s beginnings as just a catalog in a personal living room to massive multi-story Galleries with restaurants that generate >$10mn. Investors can learn much from the early business failings, as well as the incredible turnaround and business transformation Gary Friedman led. We draw on Speedwell’s 86-page research report, released in March 2023, to teach you not just about RH, but also about novel customer acquisition strategies, the dangers of promotions, how to build a coherent consumer value prop, and show how changing a business’s strategy requires reworking every element of the company. Enjoy!
Long Form
FND 2Q23 Earnings Recap
We covered Floor & Decor’s 2Q23 earnings here. You can purchase the full 50+ page research report here and read our previous earnings update (4Q22) here.
$FND reported 2Q23.
Market reacted sending the stock down -6%.
Results might look weak, but in the context of the macro backdrop they are fine and mgmt. continues to execute on their 500 store plan.
META 2Q23 Earnings Recap
You can read our coverage of Meta’s 2Q23 earnings here. You can also purchase the full 160+ page research report here.
It’s funny how different a few quarters can make:
Zero mentions of Tiktok
No criticism of AI CapEx spend
No questions on platform durability/usage
ATT only mentioned once and not even in the context of being bad for Meta
Short Form
Copart
Looks like IAA’s long history of being mismanaged will continue…
$RBA (who just closed on IAA in March) just fired the CEO and CFO.
Throwback to when Ritchie Bros released a ppt slide of how the acquisition was misrepresented because the circles were “too” overlapped.
Floor & Decor
If you have a strong value prop and aren’t dominant in an industry yet, you can grow through headwinds.
$FND guided FY2023 to +8-11% y/y despite macro and strong comps.
Constellation Software
Mark Leonard on hurdle rates being magnetic.
An investor might be at the same risk— if they lower the discount rate (or required return) for one stock, perhaps the whole portfolio gravitates there overtime.
Meta
General History
Quotes
Letters
Thanks for reading this week’s roundup! If you have any questions or suggestions on what you’d like to see more of, please reach out!