Kapish Bhutani of Nugent Capital Management presented his in-depth thesis on Mohawk Industries (US: MHK) at Wide-Moat Investing Summit 2019.

Thesis summary:

is the largest flooring manufacturer in the world, run by a best-in-class management team. Over the last two decades, the company successfully transitioned from a legacy carpet manufacturer based in the U.S. to one with a global footprint, well-diversified across categories and geographies. However, short-term challenges from higher input costs and popularity of a relatively new category, Luxury Vinyl Tile, have impacted margins over the last few quarters. As a result, the stock fell from a high of $285 to $115 per share last year. While management expects results to improve by 2020 and the stock price has increased recently, it remains reasonably priced at a low double-digit earnings multiple for a business with double-digit return on capital and a long growth runway ahead.

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About the instructor:

Kapish Bhutani is a Portfolio Manager at Nugent Capital Management, which he founded in 2018 as a private investment vehicle. Previously, as a Research Analyst at Diamond Hill Capital Management for over 11 years, he covered the Consumer Staples sector and was sole manager of the Consumer Staples sleeve for their analyst run mutual fund. In addition, he was a Co-Portfolio manager for the International and Global Equity strategies. Prior to Diamond Hill, he worked for over three years in investment consulting with a predecessor of Aon Hewitt, covering traditional asset managers. Mr. Bhutani is a CFA Charterholder and earned his MBA from the University of Maryland.