Lennox International (LII)

Stock's been held back on supply chain issues and regulatory changes. Issues starting to clear, shown convincingly by material spike in price on Q1 earnings last week.

HVAC manufacturer and distributor. Secular advantage from climate change. 75% of sales come from replacement parts, remaining 25% tied to new construction (industrial and residential). Taking share in emergency replacement demand. 

Housing demand has been depressed, so the sector's coming off cycle chop. Sees it reaccelerating back to high-single or low-double digit rate of earnings growth, and the share price should move in tandem. Yield is 0.99%.

HVAC. More into commercial and residential rather than industrial data centres. Stock's been moving sideways. 200-day MA falling slightly in last little while, with the stock price below that. He can't understand why that is. And it's cut its forecast.

Lots of $$ has been flowing into the tech sector. Still long-term secular tailwinds behind HVAC equipment, especially in EMs. A leader. More resilient than other industrial names.

Somewhat vulnerable to shifting winds of tariff and trade policy, but should navigate reasonably well. Technological superiority. Secularly advantaged by climate change. More in the tank for second half of the year as tariff uncertainty gets resolved.

Secularly advantaged by climate change. Manufacture and distribute HVAC equipment (both heating and cooling). Big player in US, a bit up in Canada. Well-articulated plan to improve operating margins over the coming few years.

In US, new environmental regulation came into effect this year that phases out a particular refrigerant. This is positively impacting the business. He sees a good, visible path to high single-digit or low double-digit compounding of earnings in coming years. Yield is 0.91%, which has grown at 12% over the last decade.

HVAC for new and replacement construction. It's a replacement play on aging infrastructure, environmental sensitivity, and increased efficiency. Trending higher since mid-2022. Clear channel of higher highs and higher lows. 14-15% earnings growth rate. Yield is 0.76%.

Likes it and owns it.

Sometimes the simplest businesses can be the best to invest in. HVACR sales to replacement and new construction markets. Replacement sales represent about 75% of sales, 25% for new. Two-thirds from residential. 90% of revenues from US, so not a lot of volatility from foreign markets. Yield is 1%.

Clear channel of higher highs and higher lows. 15-17% EPS growth forecast for the next few years. Extensive brand recognition and distribution networks. Great demand for systems that are efficient and environmentally sensitive. Rising temperatures and increasing urbanization affecting demand positively.

Demand for air conditioning and cooling products continues to increase. Ability to generate profits very strong. Expecting further sales increases going forward. Strong management team that has executed well on capital allocation. Market leader in industrial and consumer segments. Streamlining of European business units will help performance. Green component of company providing eco-friendly options to investors.