Apr 9, 2021Liked by Ayesha Tariq

Looking at the the stock repurchase program in the context of this being a company focused on growth, their FCF vs. contractual obligations, and their history of acquisitions, is that something you'd like to see continue or do you think that money would be more beneficial to the company long-term spent elsewhere?

I'm typically a fan of buyback news but looking at the big picture, this is one along with my MercadoLibre that I'd prefer them to deploy elsewhere. It's not an excessive buyback or anything given where their revenues are and their debt is financed at fairly low rates-- not enough to strongly sway me but something I'd probably vote against if given the option.

I like to see where their R&D spend is at. This certainly isn't the type of company that should be resting on its laurels, and with their large patent base and diverse list of customers already on the books, this is the best route to increasing their margins and recurring revenue to my eyes. Talking about creating synergies within a company from past acquisitions that haven't quite been integrated is almost an investing cliche at this point ha, but coupled with their R&D spend it's reasonable to expect to see some of that in practice here. If that R&D spend ends up helping margins to expand and adds a new meaningful revenue stream or two, Trimble could end up looking relatively cheap in comparison to its peers.

Expand full comment