Preferred Shares Podcast

Welcome to Episode 31 of the Preferred Shares Podcast.In this episode, we continue our short series on Nestlé. We brought back our guest Mark Purdy (whom we interviewed about Lindt & Sprüngli) to chat about the company’s more recent history and its current set of challenges and opportunities. Mark is a veteran investment analyst with 40 years of experience with a particular focus on consumer brands. He’s now retired from full-time research and portfolio management, and he has set up Calabria Park Advisors, a boutique consultancy.In This Episode* Setting the Stage: Consumer Staples Under Pressure — Mark frames the last six years for the sector, covering the COVID distortion between in-home and out-of-home consumption, and the wave of inflation that followed.* Nestle’s Perfect Storm: Cocoa & Coffee Costs — Commodity prices hit Nestlé especially hard, with cocoa at one point nearly 5x its pre-spike level, squeezing margins.* CEO Carousel: Three Leaders in 18 Months — The show examines the transition from Paul Bulcke to Mark Schneider to Laurent Freixe and now Philippe Navratil, and how leadership instability can create internal distraction even at a resilient company.* The Case for Insider CEOs in Consumer Staples — Mark argues that the long-cycle nature of brand stewardship favors internal promotions, and why Navratil’s 20-year tenure and track record make him a credible candidate.* Brand Portfolio Sprawl — A discussion of how consumer goods giants naturally accumulate thousands of brands despite every CEO promising “fewer, bigger, better,” and what Nestlé should actually do about it.* M&A Winners and Losers: Ralston Purina vs. Health Science — Mark contrasts Nestlé’s successful acquisitions (Purina, the Starbucks licensing deal) against its costly failures in vitamins, wellness, and Jenny Craig, and explains why working capital mismatches can doom category expansions.* The KitKat Exception and Confectionery Regrets — Despite owning iconic Rowntree’s brands, Nestlé largely squandered its confectionery position — with KitKat the lone standout — while watching Lindt thrive on its doorstep.* Capital Allocation Priorities: Dividends, Debt, and RIG — Mark digs into Nestlé’s current financial constraints, a stretched ~70% dividend payout ratio, rising net debt, and why CEO Navratil’s new focus on Real Internal Growth (RIG) — a metric Nestlé itself invented — is the only viable path forward.* The L’Oreal Stake: Financial Asset or Get-Out-of-Jail Card? — Mark walks through the 50-year history of Nestlé’s ~20% stake in L’Oreal and the logic (and politics) of gradually selling it down.* Closing Advice to the Board — Mark’s prescription: Nestlé must recognize its genuine strengths (emerging market reach, scale, R&D); stop chasing growth through ill-fitting acquisitions; and be patient. A steady 3% real sales growth rate has historically been more than enough to create a very attractive shareholder return.[Charts and Pictures]The two charts below show the total increase decrease of Nestlé’s seven product categories over the last ten years. The two growth categories have been Powdered and Liquid Beverages and PetCare, while the others have been down or flat. The result has been total sales not increasing by much for Nestlé over the prior decade.Additional Reading & ListeningCurious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:* Douglas Ott (Andvari Associates and @yesandnotyes)* 📖 An AI Skeptic’s Primer* 📖 Tyler Technologies Investment Report* Lawrence Hamtil (Fortune Financial and @lhamtil)* 📖 The Traits of an Ideal Industry* Devin LaSarre (Invariant and @DevinLaSarre)* 📖 Edgar M. Cullman’s Brilliance* 📖 Edgar M. Cullman’s Brilliance, Part TwoEnjoy this episode? Share it with someone who loves business history as much as you do!You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.DisclaimerAll opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.preferredsharespodcast.com

Welcome to Episode 30 of the Preferred Shares Podcast.In this episode, we discussed the history and founding of Nestlé.* Origins of the company in 1867* The strategic 1905 merger with Anglo-Swiss Condensed Milk Company* Nestlé’s exceptional resilience and growing scale* Nestlé’s global dominance in the coffee market* The success of its Maggi brand* The organic and inorganic growth behind its Health Science and Medical Nutrition segmentAdditional Reading & ListeningCurious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:* Douglas Ott (Andvari Associates and @yesandnotyes)* 📖 An AI Skeptic’s Primer* 📖 Tyler Technologies Investment Report* Lawrence Hamtil (Fortune Financial and @lhamtil)* 📖 The Traits of an Ideal Industry* Devin LaSarre (Invariant and @DevinLaSarre)* 📖 Edgar M. Cullman’s Brilliance* 📖 Edgar M. Cullman’s Brilliance, Part TwoEnjoy this episode? Share it with someone who loves business history as much as you do!You can also follow Preferred Shares, Devin, Doug, and Lawrence on X.DisclaimerAll opinions expressed by Preferred Shares Hosts and guests are solely their own opinions and do not reflect the opinions of their current or former employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.Clients of Andvari Associates and Fortune Financial may maintain positions in the securities discussed in this podcast. As of the date of this podcast, Andvari and Fortune Financial clients owned shares of Nestle. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.preferredsharespodcast.com

Welcome to Episode 29 of the Preferred Shares Podcast.In this episode, we interviewed Clifford Thompson of Thompson Traders, a family-owned business founded in 2002. Since then, Thompson Traders has carved out a niche in the high-end home fixture market with a focus on luxury copper and brass sinks, range hoods, innovative designs, and strong customer relationships.We discussed a variety of topics:* Cliff shares his journey in founding Thompson Traders;* The importance of cash flow in small businesses;* Thompson Traders evolving from importing to designing their own products;* The intricacies of product design;* The impact material choices have on customer preferences and product durability;* How customer relationships are key to business success;* How Thompson Traders has navigated a competitive marketplace; and* The WSJ article in which Thompson Traders was featured and how tariffs have impacted small businesses like Thompson.To see Thompson Trader’s products in all their glory, please take a look at their most recent “Look Books” for 2025:Thompson Traders PhotosAdditional Reading & ListeningCurious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:* Douglas Ott (Andvari Associates and @yesandnotyes)* 📖 Cranberries & Ocean Spray: Part I* 📖 Constellation Software: A People Business* Devin LaSarre (Invariant and @DevinLaSarre)* 📖 2026 Nicotine Basket Snapshot* Lawrence Hamtil (Fortune Financial and @lhamtil)* 📖 Aerospace: After A Century of Growth; A Bright Future AheadEnjoy this episode? Share it with someone who loves business history as much as you do!You can also follow Preferred Shares, Devin, Doug, and Lawrence on X.DisclaimerAll opinions expressed by Preferred Shares Hosts and guests are solely their own opinions and do not reflect the opinions of their current or former employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.Clients of Andvari Associates and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.preferredsharespodcast.com

Welcome to Episode 28 of the Preferred Shares Podcast.In this episode, we interview David Gearhart, CEO and Chairman of Wilmington Holdings Corporation, a private holding company of several insurance businesses. David tells the story of how he decided to try to find and acquire a small insurance business. In 2017, he successfully acquired Wilmington Insurance Company. After eight years of growth, both organic and by acquisition, Wilmington Holdings now controls about $50 million of annual premiums and has $100 million of assets on its balance sheet.We discussed a variety of topics: * David Gearhart’s background and how the business bug bit him;* What the process was like to search for and acquire a private insurance company;* David’s search criteria;* The importance of disciplined underwriting and staying within their circle of competence;* The importance of people in the insurance business;* How David thinks about the trade-offs between investing in Wilmington’s insurance businesses versus investing the insurance float;* Key lessons David learned when he studied the history of National Indemnity Company;* David shared one of the mistakes he made and his takeaway;* David’s goals for Wilmington going forward.Enjoy this episode? Share it with someone who loves business history as much as you do!You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.Other SourcesDavid Gearhart also did an interview with At Home With Roby which was released on October 6, 2024.Additional Reading & ListeningCurious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:* Douglas Ott (Andvari Associates and @yesandnotyes)* 📖 Cranberries & Ocean Spray: Part I* 📖 Constellation Software: A People Business* Devin LaSarre (Invariant and @DevinLaSarre)* 📖 Nicotine Certainty* 📖 Philip Morris International: ZYNsn’t It?* Lawrence Hamtil (Fortune Financial and @lhamtil)* 📖 Aerospace: After A Century of Growth; A Bright Future AheadEnjoy this episode? Share it with someone who loves business history as much as you do!You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.DisclaimerAll opinions expressed by Preferred Shares Hosts and guests are solely their own opinions and do not reflect the opinions of their current or former employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.Clients of Andvari Associates and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.preferredsharespodcast.com

In this engaging discussion, Nick Longhurst, a portfolio manager at Marathon Asset Management with over 30 years in fund management, dives into the fascinating world of salmon farming. He explains why salmon stands out among fish, highlighting its high value and farming efficiency. Nick also details the industry’s history and the challenges faced by new entrants due to strict regulations and market consolidation. He compares major players like Mowi and SalMar while addressing risks and technological threats, providing a comprehensive overview of this unique sector.

Welcome to Episode 26 of the Preferred Shares Podcast.Fewer people have flown the Northrop Grumman B-2 stealth bomber than have traveled to space, which is why it was a great honor for Preferred Shares to interview Lt. Col. Todd Moenster, USAF, Retired, a former B-2 pilot.We discussed a variety of topics: * Why Todd became interested in becoming a pilot;* Air Force pilot selection and the training program;* Bomber aircraft characteristics and how the bomber training program differed from the programs for other aircraft;* The challenges of long missions and managing fatigue and discomfort;* Todd’s personal stories of operational incidents and the importance of technical redundancy; and* Todd’s transition to the private sector and his role as a leader in Garmin’s Government and Defense Aviation Business Development.Additional Reading & ListeningCurious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:* Devin LaSarre (Invariant and @DevinLaSarre)* 📖 Nicotine Certainty* 📖 Philip Morris International: ZYNsn’t It?* Douglas Ott (Andvari Associates and @yesandnotyes)* 📖 The Story of Amphenol: 1987-1992* 📖 Constellation Software: A People Business* Lawrence Hamtil (Fortune Financial and @lhamtil)* 📖 Aerospace: After A Century of Growth; A Bright Future AheadEnjoy this episode? Share it with someone who loves business history as much as you do!You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.DisclaimerAll opinions expressed by Preferred Shares Hosts and guests are solely their own opinions and do not reflect the opinions of their current or former employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.Clients of Andvari Associates and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.preferredsharespodcast.com

Welcome to Episode 25 of the Preferred Shares Podcast.In this episode of the Preferred Shares podcast, Doug provides a brief history of Pool Corp. and an overview of the current business. The co-hosts discuss the pros and cons of the business and why it might be a “high quality cyclical” enterprise.In This Episode[01:11] Early History and Founding[06:22] Current Market Position and Business Model of Pool Corp[10:25] Growth Trends and Market Dynamics[13:39] Financial Performance and Revenue Breakdown[17:46] Management Structure and Company Culture[20:13] Competitive Landscape and Market Challenges[22:20] Investment Considerations and Future Outlook[26:31] Doug Gives His Elevator PitchAdditional Reading & ListeningDid you miss our series on Amphenol? Check it out below.Curious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:* Douglas Ott (Andvari Associates and @yesandnotyes) * Doug provides even more details, anecdotes, and financials on the early history of Amphenol.* 📖 The Story of Amphenol: 1932-1958* 📖 The Story of Amphenol: 1958-1971* 📖 The Story of Amphenol: 1971-1981* Lawrence Hamtil (Fortune Financial and @lhamtil)* 📖 Aerospace: After A Century of Growth; A Bright Future Ahead* Devin LaSarre (Invariant and @DevinLaSarre)* 📖 Per-Pouch Price Premium - Devin writes about the current state of the nicotine pouch market. Enjoy this episode? Share it with someone who loves business history as much as you do!You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.DisclaimerAll opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.preferredsharespodcast.com

In this discussion, Will Kerwin, a Senior Equity Analyst at Morningstar, dives into the fascinating world of Amphenol, a key player in the connector industry. He explores its competitive market landscape and innovative strategies, highlighting growth in sectors like aerospace and defense. Kerwin sheds light on Amphenol's unique corporate culture that thrives on decentralization, and its smart capital allocation for future acquisitions. The conversation also touches on emerging trends, risks, and opportunities that could shape Amphenol’s path forward.

Explore the fascinating history of Amphenol, a connector giant that evolved from military innovations to consumer electronics prominence. Discover its significant role during World War II and the strategic acquisitions that shaped its growth. Learn about the IPO journey and the influence of private equity firm KKR. The discussion also highlights the enduring legacy of founder Arthur J. Schmidt, emphasizing the importance of adaptability and strong corporate culture in driving success.

Welcome to Episode 22 of the Preferred Shares Podcast.In this episode, we explore the evolution of the dry cleaning industry. To guide us, we are joined by Tim Maxwell. Tim is an industry veteran, having started working at his parent’s wholesale suede and leather cleaning business at age twelve and eventually founding a company that would ultimately disrupt the dry cleaning space; GreenEarth Cleaning.In This Episode[02:12] Tim’s background, the family business, education, and partnering[03:05] The idea behind GreenEarth Cleaning[03:45] Exiting the family business to pursue the new opportunity in 1999[08:25] The dynamics of a durable, multi-generation family business[14:40] Changing technologies in the dry cleaning space[19:00] Industry headwinds, trends, and adaptation[27:30] Additional margin pressures[30:40] The rise of green cleaning methods[44:20] Production, logistics, and the idea of being a partner rather than a vendor[52:00] The ultimate winners and losers of industry evolutionBelow, the Maxwell family is featured on the cover of FabricareCanada in 2005 celebrating 30 years of the family’s ownership of SuedeMaster. Tim had already left the family business in 1999 for the GreenEarth Cleaning opportunity.Below is Tim Maxwell (center in green shirt) with a handful of GreenEarth Cleaning teammates.DataSources* GreenEarth Cleaning website* 2025 State of the Dry Cleaning Industry ReportArticles* “Clean and Green”, Washington Post, Nov. 9, 2000.* “Tim Maxwell is GreenEarth's Man in Canada”, Fabricare Canada, Sept/Oct 2000: 24.* “New Formulas and Machines are Sprucing Up Dry Cleaning”, CityBusiness, The Business Journal, February 4, 2002.* “How Kimco is helping dry cleaners replace perc with environmentally safe alternative”, Kimco Blog, April 2012.* “How Well Do You Know Jim Douglas?”, Cleaner and Launderer, July 26, 2019.* GreenEarth co-founder, Jim Douglas, was inducted into the Drycleaning & Laundry Institute Hall of Fame in 2024.Additional Reading & ListeningCurious to see what else we’ve been working on? Check out some of the interesting things we’ve done recently:* Douglas Ott (Andvari Associates and @yesandnotyes)* 📖 The Long Road From Metro-Tel to EVI Industries* Lawrence Hamtil (Fortune Financial and @lhamtil)* 🎙️ The Future of Defense — The History, Advances, And Outlook* Devin LaSarre (Invariant and @DevinLaSarre)* 📖 Nicotine in JapanEnjoy this episode? Share it with someone who loves business history as much as you do!You can also follow Preferred Shares, Devin, Doug, and Lawrence on Twitter.DisclaimerAll opinions expressed by Preferred Shares hosts and guests are solely their own opinions and do not reflect the opinions of their respective employers. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. None of the information contained in the podcast or this web site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person.Clients of Andvari and Fortune Financial may maintain positions in the securities discussed in this podcast. Furthermore, from time to time, the Hosts may hold positions or other interests in securities mentioned in the Podcast and may trade for their own accounts based on the information presented. The Hosts may also take positions inconsistent with the views expressed in its messages on the Podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.preferredsharespodcast.com