TIP659: Hermès Stock Deep Dive w/ Shree Viswanathan
We Study Billionaires - The Investor’s Podcast Network
Hermès Financial Strategies: Valuation and Growth
This chapter explores Hermès' capital allocation and valuation metrics, emphasizing its commitment to long-term growth and brand integrity. It covers the company's cultural influences on financial decisions and its robust cash position, alongside a discussion on the mining service industry that highlights financial benefits and operations.
On today’s episode, Clay is joined by Shree Viswanathan for a stock deep dive on Hermès. Hermès is a luxury goods manufacturer renowned for its high-quality craftsmanship. The brand is known for its iconic products, such as the Birkin and Kelly bags, silk scarves, and equestrian-inspired items.
Since the IPO in 1993, shares of Hermès have compounded at 20.6% (excluding dividends), while the S&P 500 had a total return of just 10.4%.
Shree Viswanathan is the founder and portfolio manager of SVN Capital.
IN THIS EPISODE YOU’LL LEARN:
00:00 - Intro
02:38 - A business overview of Hermès.
10:28 - Examples of Hermès thinking exceptionally long-term in their business strategy.
30:16 - The attempted takeover of Bernard Arnault.
37:59 - The strength of Hermès’ moat.
56:01 - The growth opportunities ahead for Hermès and the luxury industry more broadly.
01:03:22 - How Hermès approaches capital allocation.
01:14:15 - Shree’s thoughts on Hermès’ valuation.
01:29:51 - Risks that investors should monitor for Hermès.
And so much more!
Disclaimer: Slight discrepancies in the timestamps may occur due to podcast platform differences.
BOOKS AND RESOURCES
- Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, Kyle, and the other community members.
- Shree’s fund: SVN Capital.
- Follow Shree on Twitter.
- Best Anchor Stocks write-ups on Hermès.
- Books mentioned: 100 Baggers, The Founder’s Mentality, The Luxury Strategy.
- Stewart Brand’s seminar on long-term thinking.
- Howard Marks’ podcast with Morgan House.
- Related Episode: WSB585: Concentrated Value Investing w/ Shree Viswanathan.
- Mentioned Episode: WSB645: The King of Luxury w/ Christian Billinger.
- Follow Clay on Twitter.
- Check out all the books mentioned and discussed in our podcast episodes here.
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