Investideas

What's the idea? Nice offers three unique platforms for different usage scenarios, but united by common capabilities: optimisation, automation and AI-based analytics presentation. These solutions significantly increase productivity in labour-intensive areas such as contact centres, police, justice and financial compliance. The company's products are recognised as leaders in their respective fields. The target market for Nice solutions is estimated at $11 billion and is expected to grow at a compound annual growth rate (CAGR) of 21.8% from 2023 to 2028. A strong partner network helps the company to maintain a leadership position in its fragmented industry. Nice is transforming its business towards cloud services with a growing share of recurring revenue, moving the company's profile closer to a pure SaaS (Software as a Service) model.

What's the idea? After taking office in January 2025, new US President Donald Trump, a supporter of conventional energy, may introduce measures to support the industry, which could increase demand for the services of oilfield services companies such as Weatherford. The possible measures include: revising Joe Biden's offshore oil and gas permitting plan and radically increase the number of new drilling auctions; lifting the moratorium on liquefied natural gas (LNG) exports from new projects; redirecting budget incentives from renewable energy projects to hydrogen production and carbon capture and storage projects; imposing tariffs on US oil imports. Weatherford is active in M&A transactions, focusing on smaller companies with promising technologies that the company can acquire at a relatively low price.

What's the idea? LivaNova operates in a highly specialized field and manufactures products of recognized quality. The company feels confident in its market niche despite the presence of large competitors. The target markets of the company's two key business segments are projected to grow at a compound annual growth rate of 5% to 9% over the next few years. Different segment profiles contribute to the stability of the company: the Cardiopulmonary segment is characterized by higher sales growth, while the Neuromodulation segment provides higher profitability. LivaNova is restructuring its business, strengthening its focus on key areas and reducing costs. Despite temporary losses from write-downs and revaluation of assets, the restructuring optimizes the company's operations and improves the overall business profile, ensuring stable growth and higher profits in the future.

What's the idea? Gold prices are up 25% in 2024, outperforming major stock indices including the S&P 500. This growth reflects strong demand and supply dynamics that allow mining companies such as Barrick Gold to continue to capitalize on high gold prices. In Q3 2024, gold demand reached a record 1,313 tons (+5% year-on-year, YoY) and its value exceeded $100 billion thanks to a 28% increase in the average gold price to $2,474 per ounce. The World Gold Council forecasts strong investment demand for the precious metal, but notes difficulties with consumer purchases due to high prices and the strengthening of the US dollar. Barrick Gold reported strong financial results for Q3 2024, with revenues up 17% YoY to $3.37 billion despite a decline in production to 943,000 oz from 1,039 million ounces a year earlier. At the same time, rising costs put pressure on profitability: Total Cash Costs and All-in Sustaining Costs increased by 21% and 20% YoY, respectively.

What's the idea? Iridium provides satellite communications services, the market for which is expected to grow at a compound annual growth rate (CAGR) of 9.6% during 2024–2032 to reach $70.89 billion by the end of the forecast period. The enterprise segment of Internet of Things will reach $690 billion by 2030, projected to grow at a CAGR of 15%. The company expects its service revenues to reach $1 billion per year by 2030, representing growth at a CAGR of 8% from current levels. The company has launched the Iridium Certus GMDSS service, which could drive additional demand for the company's services from the maritime industry. The recent acquisition of Satelles allowed Iridium to enter a new market for GPS signal security. The company pays shareholders a dividend yielding 1.78% and repurchases shares from the market under a buyback program, the authorized amount of which is equivalent to around 18% of IRDM's market capitalization.

What's the idea? As commercial interest in space exploration grows, NASA has approved a new lunar program, Artemis, that relies on private funding. Intuitive Machines is one of NASA's key contractors in this program. The company provides services to deliver useful cargo to the Moon, which is particularly relevant in the context of the planned human landing on the Earth's natural satellite in 2026. Due to China's rapid progress in lunar exploration, the US may increase its spending on the Artemis program. In September 2024, Intuitive Machines won a major $4.82 billion contract to establish a permanent link between the Moon and Earth. The company continued to raise funds from private contractors and successfully sold all available space for cargo to be delivered to the Moon on the second IM-2 mission. Intuitive Machines is planning two flights to the Moon in 2025. If these are successful, the company's market capitalisation could increase significantly.

What's the idea? HealthEquity Inc. is the largest provider of HSAs in the US, managing approximately 9.4 million HSAs with $29.5 billion in assets, as of July 2024, alongside 6.9 million other CDB accounts. The US HSA market has grown substantially, with total assets increasing from $65.9 billion in 2019 to $123.3 billion in 2023, reflecting a compound annual growth rate (CAGR) of 17%. Projections suggest HSA assets could reach $168.3 billion by 2026, indicating further market expansion. To fuel future growth, HealthEquity has implemented several strategic initiatives, including strong sales efforts, a new mobile app, and AI-powered claims processing. The company has also enhanced its partnerships within the health benefits ecosystem and recently launched HPAs in collaboration with Paytient, offering employees an interest-free way to manage healthcare costs.

What's the idea? The consumer food service market in China is huge and estimated to equal about US$650 billion. Despite slowing growth rates, witnessed over the last couple of years, the market is highly fragmented and Yum China can increase its market share. Yum China plans to expand its restaurant network from current 15,000 to 20,000 units by 2026. It will allocate from $2.3 to $3.0 billion of capital expenditure to reach this goal. Moreover, the company will continue to experiment with menu items and store formats to drive net sales. Development of the digital ecosystem is another pillar of the company's strategy. Yum China constantly improves its technologies to increase operational efficiency of supply chains and inventory management as well as boost digital orders, which positively impacts both margins and revenue. Yum China is a growth company so its current cash returns to shareholders are relatively modest. However, the management demonstrates commitment to return excess cash to shareholders, increasing returns in the future, which is a positive signal for long-term investors.

What's the idea? Full Truck Alliance operates in the Full Truck Load (FTL) and Less Truck Load (LTL) markets, which are projected to grow at a compound annual growth rate (CAGR) of 5.9% and 6.9%, respectively, between 2024 and 2030. Weak digitalization of the Chinese market: Full Truck Alliance has an opportunity to scale the business by replacing offline players in the Chinese logistics market. A good time to enter: heavy rains in China caused Full Truck Alliance's capitalization to drop 25% from summer peaks, but the weather had only a limited impact on the company's business. In Q2 2024, the number of active average monthly shippers rose to a record 2.7 million (+32.8% y/y). Revenue from the company's relatively new transactional business increased 63.3% to nearly ¥1 billion by the end of the reporting period. In March 2024, Full Truck Alliance adopted a share buyback program with an authorized amount equivalent to $3.55% of the company's market capitalisation.