And speaking of automobiles, another interesting company is O’Reilly Automotive (ORLY), a US auto parts retailer serving auto service professionals and advanced DIYers with an established supply chain and a best-in-class inventory.
Looking beyond automobile-related opportunities, Graco (GGG) is another company we’ve researched. This manufacturer of fluid-handling systems and products spends 3x as much as its peer group on product development. It has highly engineered products for niche applications with limited direct competition and sells its wares through a network of authorized distributors and retailers.
Rockwell Automation (ROK) is laser-focused on industrial automation which has made it a best-in-class industrial automation company. They must be doing something right since within the past two years, the company has received two publicly disclosed buyout offers. ROK is strong in all areas of industrial automation and Industrial automation is an extremely attractive market with strong global growth potential. And it’s totally removed from the FAANG orbit.
It’s important for advisors to remember that as big and powerful as the FAANG companies are, they represent only a small fraction of the investible universe and there are other great companies in representing different segments of the market. Companies like MasterCard and Visa may not be growing as fast as the FAANGs, but they are well-positioned to deliver good shareholder value over the next decade. For investors like ourselves who focus on growth at a reasonable price that’s where we find companies worth sinking our teeth into.
Brian Milligan, CFA, is the lead manager of the Ave Maria Growth Fund (AVEGX) and is a research analyst responsible for equity research functions for Schwartz Investment Counsel with a focus on growth companies.