Motley Fool Money Industrial Companies with Moats
Oct 30, 2022
Nick Santhanam, CEO of the Fernweh Group and co-author of "The Titanium Economy," dives into the often-overlooked industrial sector. He discusses why traditional views of these companies miss their potential for strong moats, especially in niche areas like 3D printing and fluid-handling. Santhanam highlights the advantages of family-run businesses and the pressing need to attract talent in manufacturing. He also emphasizes how innovative technologies can redefine the sector, securing a brighter future for American industry.
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Misunderstood and Undervalued Sector
- The industrial sector is often misunderstood as a monolith, but it comprises 90+ micro-verticals.
- It's also undervalued; value creation comes from margin expansion, not multiple expansion like in tech.
Cool Companies vs. Essential Companies
- Nick Santhanam's son questioned why he didn't work for a "cool" company like Google or Amazon.
- Santhanam explained that industrial companies, while less glamorous, are the bedrock of everything we use.
3D Printing's Niche
- 3D printing's value lies in creating complex, low-volume parts, especially during supply chain disruptions.
- This helps avoid delays when small, inexpensive parts hold up production of expensive components.
