Shawn O’Malley and Daniel Mahnke break down Comfort Systems (ticker: FIX), a specialty contracting company providing installation and maintenance services for the electrical, HVAC, and plumbing needs of schools, hospitals, apartment buildings, restaurants, data centers, manufacturing facilities, and a range of other customers. Comfort Systems is something of a serial acquirer, snapping up regional contracting companies at attractive prices and plugging them into a broader holding company structure, where management at the top can handle capital allocation across each of the subsidiaries.
In this episode, you’ll learn how Comfort Systems has scaled across the country and diversified its operations, how the business has used the serial acquirer playbook to compound its intrinsic value for shareholders, why the company is benefiting from major tailwinds related to AI and manufacturing onshoring in the U.S., plus so much more!
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IN THIS EPISODE, YOU’LL LEARN
00:00 - Intro
09:59 - Why Comfort Systems has benefited from a manufacturing boom in the U.S.
10:54 - How Comfort Systems is tied to the AI boom
14:40 - What the company looks for in acquisition targets
20:32 - How Comfort Systems increases its intrinsic value by supporting its subsidiary contracting businesses
35:28 - Why mechanical contracting is such a localized business
40:45 - Whether Comfort Systems can continue to compound returns going forward
1:00:13 - How to calculate returns on incremental invested capital and why it matters for shareholders
1:02:41 - What is Comfort Systems’ intrinsic value per share
1:06:44 - Whether Shawn & Daniel add FIX to The Intrinsic Value Portfolio
And much, much more!
*Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences.
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