Stephen Dodson presented his in-depth investment thesis on PPG Industries (NYSE: PPG) at Wide-Moat Investing Summit 2017.
PPG Industries is one of the largest coatings and paint manufacturers in the world. Over the past decade and a half, it has transformed itself from a diversified chemicals and glass manufacturer into a pure coatings and paint company with growing volumes, high margins, and large returns on capital. The paint business is deeply insulated from new competition, with no significant new entrant in decades. PPG has complemented organic growth with smart acquisitions and is one of the rare acquirers able to maintain high returns on capital with minimal goodwill write-offs. Management buys back a fair amount of stock and consistently raises the dividend. In other words, they are thoughtful, savvy capital allocators in a growing, highly defensible industry. PPG trades at 16x 2018 EPS estimates and 13x 2018 EBIT estimates.
Stephen Dodson founded the Bretton Fund in 2010 and serves as its president and portfolio manager. Most recently, Stephen served as president of Parnassus Investments, which was founded in 1984 and manages the Parnassus Funds, a family of mutual funds for individual and institutional investors. Stephen was with Parnassus from 2002 to 2008 and served in a number of areas within the firm, including chief operating officer, portfolio manager, and chief compliance officer. In 2008, Institutional Investor News named him one of the 20 Rising Stars of Mutual Funds. He is a board member of the philanthropy group Full Circle Fund, serving on its executive committee, and has led projects for education reform in California. Prior to Parnassus, he worked for the venture capital group of Advent International, a private equity firm, and was an investment banker for Morgan Stanley in New York and Menlo Park. He holds a BS in business administration from the University of California, Berkeley.
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