Forum Topics PWR
Duffshot38
2 years ago

Another impressive set of results from PWR. This is one of those companies I hold that I can never fully justify the current share price but it has always been like this and probably always will while they continue to perform like they do. If you want to get a good insight into how they are successful, I think the PWR DNA (see here) is a great place to start. The organisation is incredibly well run and I love their attitude / culture as described in the DNA.

As for valuation - I have resigned myself to the fact they are a well run and incredibly successful business that has a great future and I should ignore the current valuation and just hold hold hold until I sense anything different. Nothing in their current results has me thinking we are anywhere close. I was concerned that the push into Defence / Aerospace was going to be more hype than anything real but even that is going well.

Am keen to hear how other Strawpeoples feel about this one but I aint selling mine.

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BoredSaint
2 years ago

This is one my favourite companies that I own. Mostly cause I have a keen interest in the F1 and motorsports in general.

I also find the current valuation a bit stretched at over 50x earnings and haven’t added to my current position for a while.

My only concern is that given this is a manufacturing business primarily, it doesn’t scale as nicely as compared to for example, a software company which can just send over software over the cloud to a new customer. PWR would need to hire more staff (which they have) and build out new facilities in order to increase productivity.

in the latest presentation, they are in the running for a 500,000 vehicle project to provide their cooling systems. I can’t see how they would be able to cope with the workload without hiring a lot more staff and building new facilities. And this would come with risks as well.

Nonetheless I’m a happy shareholder currently and will wait and see how they scale in the coming few years. But lots of exciting projects in the pipeline!

Disc: Held IRL and on Strawman

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Duffshot38
2 years ago

Yes the F1 link is what got me interested initially too. I was concerned the new F1 budget caps would have a significant impact on the motorsport arm but does not appear too. Probably gone are the days where they would be using new design heat exchangers for every race to maximise the downforce requirements for each track but they are clearly still using plenty of PWR products.

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BoredSaint
2 years ago

Given that overheating is such a major reason for the cars failing (just look at Ferrari! Ok maybe they also have poor strategy…) I can’t see how the teams would reduce their budget on the radiators. They would probably try and squeeze out budget in other areas of the car.

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Duffshot38
2 years ago

They used to modify them every race for the variation in downforce the heat exchanger (tip - never call them a radiator to a PWR employee as I made that mistake once...) produced more than the heat transfer which blew my mind that even the radiator duh heat exchangers are being used for downforce. They will always be spending money on them I agree but they may be forced to compromise by the budget cap to one of 4 or 5 designs rather than a new one specifc to every track

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AUROPAL
2 years ago

Even with more electric power useage cooling is still really necessary as the batteries get quite hot charging and discharging so much power so quickly.

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