Stockchase InsightsVertiv HoldingsVRTPARTIAL BUYOct 23, 2024

They have a great order book. If you believe in the data centre build, believe in VRT. Buy it when it's down. Is not a spec.

GE Vernova had taken off last year, so the nuclear energy stocks would be a flavour for the next 12 months. He didn't buy GE, so he bought this. It's performed very well due to strong revenue growth, $3 billion cash and exposed to AI infrastucture. You can buy it here, more at $240, then a final third at $225.

Leader in liquid cooling. AI trade has shifted from big data centre spending to more distributive architecture that accommodates AI agents. So the need is different, with servers looking more like traditional ones. Will do well, but better returns elsewhere.

Cooling for data centres. A picks-and-shovels play. Earnings up 51% in recent quarter. Company predicts Q2 growth of 24% YOY and 18% organic growth. Margins were 22+%. Raised guidance materially. FCF up 234%. Balance sheet in great shape.

Building data centres, so it doesn't matter who wins the chip wars. Reasonable 22x PE, 33% growth. Very high expectations on the stock. Margins could moderate. Very cyclical. Yield is 0.10%.

They will have a good year. Their order book is solid.

Still likes it. Pullback provides an opportunity for new entrants. Starting to move back up above 200-day MA. Higher-beta name (1.9x the S&P), so expect volatility. No surprise that some people have been taking profits. Valuation's still very good. Seeing ~33-35% earnings growth, and only 37x forward PE. PEG is near 1.0.

Are doing great cost cuts and have pricing power. Shares were down, because they grew organically 18% vs. the expected 24%. They raised organic growth for the end of the year. Great managers.

Is -27% in three months. It's still expensive at 34x PE.

It plunged 17% today. It reported weak earnings today at 18% organic sales growth vs. the expected 23%. Management said sales were delayed in the second half. They delivered a 10 cent earnings beat, margins were excellent, and they raised their full-year forecast. The stock is unfairly punished.

Primarily in thermal cooling of data centres, whose capacity will continue to explode over the next 4-5 years. Still likes it. Higher beta at close to 1.9x, so know that you'll get some volatility. Very strong growth rate of ~33+%.

Technical structure looks very, very strong -- higher highs and highs lows. Bit of profit-taking in last 3-4 weeks. At the 100-day MA at the moment, so it might be an opportunity for you to layer in. In the AI data centre infrastructure space. RSI is getting close to oversold, but it's a high-beta stock (1.8-1.9x the S&P). Earnings growth of 33-35%, ~40x forward PE.

Good runway to price target. Buy in thirds here, ~$270, and ~$260.

They had an amazing quarter, and the best backlog of any data centre stock, but their 52x PE is too high.

They have an investor meeting on Tuesday, but share are up huge, so it might not matter. 

Liquid cooling solutions for data centres, benefits from AI buildout. This type of picks-and-shovels business is outperforming the data centres themselves.

He's not super-enthusiastic about many of these AI-adjacent companies. They're not super-sophisticated tech that nobody else can do. In the end, there are only 4-5 customers and they have the scale to push prices down. Not interested in adding at current levels.