Quadrants are a really effective tool for categorising companies

Long_Equity
04-28

Quadrants are a really effective tool for categorising companies.

The below quadrant compares market share and market growth. I look to invest in the top row, ideally the top right corner.

What companies would you add that have the market share of a growing market?

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Pricing power is essential for long term compounding.

I look for 3 things:

1. High margins - is the company adding a large up to what they sell?

2. Market share - if the company has the market share, then there’s no alternatives for customers to pick from.

3. Their customer’s income statement - if the product or service is a low expense for the customer, then they’re unlikely to cut back on buying it during a downturn.

What would you add?

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