John Heldman and David Hutchison of Triad Investment Management presented their thesis on Mohawk Industries (US: MHK) at Best Ideas 2020.
Thesis summary:
Mohawk Industries is the world’s largest flooring manufacturer, with global market leadership across carpet, tile, and laminated flooring. The company is the low-cost producer in the flooring industry, with revenue in excess of $10 billion, plants in 19 countries and customers in 170 countries.
Mohawk has grown in large part due to 44 acquisitions since 1992, including recent purchases in Brazil and Australia. It controls some of the leading brands in flooring such as Karastan, Mohawk, Dal-Tile, American Olean, Godfrey Hirst and IVC. CEO Jeff Lorberbaum owns approximately 14% of Mohawk’s outstanding shares, and has been a good steward of shareholder capital since joining the company in 1994.
Over the next three to five years, John and Dave expect revenue growth driven by both new products and geographies. They also see margin improvement from commodity cost declines, more efficient factories, and reduced new product costs. John and Dave see these factors driving Mohawk shares meaningfully higher from recent levels.
Listen to this session:
slide presentation audio recording
About the instructor:
John Heldman brings over 30 years of experience to the management of investment portfolios. Prior to founding Triad, he was a Senior Vice President and Portfolio Manager with Neuberger Berman. John has also managed institutional and individual investment portfolios for Deutsche Bank, Scudder Investments and Bank of America, including managing equity funds and serving on the Equity Strategy Committee. He obtained his Bachelor of Science degree in Finance and Master of Business Administration from California State University, Long Beach. John is a CFA charterholder, and a member of CFA Institute and CFA Society Orange County.
Dave Hutchison has 24 years of experience in investment management. Prior to joining Triad, he served as Investment Strategist for Chamberlain Group, directing investment manager research. Dave also founded and managed Hutchison Capital, a registered investment advisor. He holds a Bachelor’s degree in Political Science from Macalester College and a Master of Business Administration from the University of Southern California’s Marshall School of Business. Dave is a CFA charterholder, and a member of CFA Institute and CFA Society Orange County.
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