TIP857: S&P Global, Novo, Deckers Brands w/ Stig Brodersen, Tobias Carlisle, & Hari Ramachandra

S&P Global

• Stig Brodersen · The Investor's Podcast NetworkBullish

  S&P's ratings business is a protected oligopoly with no real substitutes, so the moat is wide.

  Ratings are about half of S&P Global's operating income. Brodersen estimates S&P at about 45% share of the ratings market, Moody's about 40%, and Fitch a distant third. Unlike substitute products, ratings complement each other: a bond issuer needs both an S&P and a Moody's rating. Regulation mandates ratings from the major agencies for many issuers, and lacking one raises borrowing costs through adverse selection. Ratings also earn recurring surveillance fees as they are updated. He says he sees no major risks in the ratings and index businesses, and his main worry is overpaying for such a high-quality, stable business. He took a 1% position at about $399 just before recording.

  “If you don't buy Boeing, you're probably buying Airbus. That's not how the ratings business work. They complement each other.”at 33:10

• Stig Brodersen · The Investor's Podcast NetworkBullish

  S&P's index business is a high-margin, high-profit segment, even with tiny per-dollar fees.

  Indices are about 10% of S&P Global's revenue but about 20% of operating profit, with segment margins near 69%. Pricing is tiered by scale, so Vanguard pays less than smaller users. Brodersen estimates the largest providers pay under one basis point, probably around half a basis point. Because the fees apply to trillions of dollars in tracked assets, they still add up to a significant profit stream.

  “Then another business segment they have are the indices. It's only 10% of revenue, but it's 20% of their operating profit.”at 34:21

• Stig Brodersen · The Investor's Podcast NetworkBullish

  S&P Global depends on continued debt growth; bigger risk is debt creation stopping, not rate rises.

  Stig argues the bigger risk to S&P Global is not a sharp rise in interest rates but debt growth stopping. In a fiat-currency system he sees debt creation as a secular trend that won't suddenly stop. If debt stops growing, S&P would be in trouble across both ratings and indices. He says that if you truly believe less debt creation is coming, don't buy S&P Global. He is bullish on the thesis that debt keeps growing. He also says private credit could erode a small part of the business, but the largest issuers still go to public markets, so the threat is limited.

  “I think the way I would probably more looking at this is if debt stops growing, then S and P is in a world of trouble, not just with ratings but also with indices.”at 37:38

• Tobias Carlisle · Acquirers Funds / The Acquirers PodcastBullish

  S&P Global is one of the world's great businesses; five flat years reflect price, not business quality.

  Tobias calls S&P Global one of the world's great companies. It has high, incremental returns on invested capital, strong moats, and a more than 100-year history. The stock has gone sideways for five years because of its price, not because of the business. He thinks it is a good bet that the world will keep issuing debt, which is what makes the thesis work. He wants to know where the valuation and returns look from here.

  “The stock chart going sideways for five years isn't anything to do with the quality of the business, it's wholly to do with the price.”at 40:16

• Stig Brodersen · The Investor's Podcast NetworkBullish

  S&P Global looks undervalued: 10-15% annual returns, intrinsic value $450-500, stock doubling in five years.

  Stig's pick is S&P Global, and he expects 10-15% annual returns. The stock has gone sideways for about five years even though the cash generation is strong. Earnings have grown and the P/E has fallen from about 40 in 2021 to about 23. He models intrinsic value at roughly $450-500 and says he could see the stock double over five years, which would give about 15% a year. He sees downside protection on the lower end. He bought a 1% starter position below $400. He expects shareholder returns from buybacks, though he thinks the buyback pace should be modelled at about 2% a year because some of the current yield is debt-funded. He also likes the mobility spin-off and the possible Capital IQ spin-off as signs of shareholder-friendly management.

  “I'd probably say anywhere between 10% to 15%. ... Whenever I try to model the intrinsic value, I'm probably around $450 to $500 if you put me on a spot.”at 43:53

• Hari Ramachandra · SalesforceBullish

  S&P Global's credit ratings business is robust and safe; the moat is structural.

  Hari calls the ratings business the safe part of S&P Global. He compares it to Buffett's comment that people would not chew anything other than Wrigley's gum. Anyone who wants to get debt or equity rated goes to S&P or Moody's, because otherwise investors would not trust or accept the rating. He sees the ratings extension into credit risk workflows as the least worrying segment. He says he is still buying the company at a P/E he would have paid before, so the business is a great franchise.

  “Anybody who wants to get their debt or equity rated, would go to S and P or Moody's. Otherwise, nobody would trust them or many wouldn't even accept.”at 47:48

• Hari Ramachandra · SalesforceBearish

  S&P Global's market intelligence faces AI-driven share loss and seat reduction; the market is discounting it heavily.

  Hari says the market intelligence segment generates about $5B in revenue, roughly as much as the ratings business. The P/E has fallen to about 23 from about 39-40. Removing about 80% of market intelligence revenue from the earnings base would leave a P/E of about 38-39, so he thinks the market is discounting this segment heavily. Two reasons: the desktop terminal is under attack from fast-growing startups. Alphasense hit about $600M in revenue and Rogo has about $50M ARR, and both are funded by S&P's own customers such as JPMorgan, Goldman Sachs and Wells Fargo. AI is also moving users from terminals to insights, so firms may need fewer analysts and fewer seats. He says he is not getting a bargain on the segment and his expected returns are the same as if he had bought at 38-39 because of the headwind.

  “you will no longer need that many analysts so that number of seats might reduce.”at 49:46

• Stig Brodersen · The Investor's Podcast NetworkBullish

  AI is not a near-term cliff for S&P Global's market intelligence; growth flat to mid-single digits.

  Stig says the market is right to worry about AI disruption, since the market may see S&P as a data company and market intelligence is about 6-8% of market cap. He thinks it is unlikely to be the most severe risk, and he is not too worried right now about AI tools like Claude disrupting it. Customers need fast, reliable, proprietary data, and about 88% of market intelligence data is proprietary. Switching is hard because teams are trained on existing platforms and the people who use the tools often don't pay for them. He concedes the segment is commoditised and under pricing pressure, and that competitors are ripe for disruption. He still thinks the business is mostly subscription revenue. He would underwrite flat growth for the segment, and pricing pressure is not material to the business.

  “I'm not too worried at least right now whenever it comes to Claude coming in and disrupting them.”at 51:28

Deckers Outdoor

Across the shows: 1 speaker in other episodes, 0 bullish and 1 bearish calls, past 30 days

• Tobias Carlisle · Acquirers Funds / The Acquirers PodcastBullish

  Deckers is priced as if it has no growth at P/E 11 with $1.6B net cash; a takeover-style value buy.

  Tobias owns Deckers in the funds he manages and sees it as a potential takeout candidate that trades cheaply. At $77 the market value is about $10.6B with a P/E of about 11. Enterprise value is about $9.7B after $1.6B of net cash and no debt, or about 7x EV operating profit. Revenue to March 2026 was $5.5B, up 10%. HOKA grew 15.9% but slowed to 7.7% in the latest quarter. UGG grew 8.2% to $2.74B. The business is clean, with independent directors and an experienced CEO. Buybacks take about 80% of free cash flow and the share count fell 7% year over year. The $4.7B authorisation is over 40% of market value, and Tobias thinks buying back stock from cash flow is value-accretive. He values the business at about $72 with no growth, but he says that assumption is unreasonable because the business is still growing faster than inflation. The stock was over $200 before the April tariffs hit and fell sharply.

  “At $77 this is being priced as if it has no growth.”at 1:03:11

• Hari Ramachandra · SalesforceBullish

  Deckers is an asset-light, high-ROIC business; slowing HOKA growth is the main concern.

  Ramachandra says Deckers does not own its production facilities. It outsources to partners or vendors in Vietnam and elsewhere, so manufacturing is cost-effective and no capex sits on the balance sheet, which shows in its ROIC. He calls it an amazing business and finds it hard to find excuses not to buy. His concern is growth: HOKA has slowed from about 24% to 16%, and UGG is a maturing brand growing in the low-to-mid single digits. He asks whether the base case is already in the fair value range and whether the stock would still be a good investment if growth keeps slowing and matures.

  “It's a very asset light business. They don't own their production facilities.”at 1:12:43

• Hari Ramachandra · SalesforceBullish

  Deckers' management is buying back more stock and its long-tenured CEO has grown the brands well.

  Ramachandra notes that management is buying back more stock now than before, which he reads as a good sign. He praises the long-tenured CEO, who grew HOKA from the beginning and has shepherded the company. He contrasts this with Nike, which made brand-positioning missteps, including pulling back from suppliers and retailers to push direct sales. He sees none of those missteps under the current CEO.

  “So that's a good sign as well. And the CEO is also pretty good.”at 1:13:27

• Tobias Carlisle · Acquirers Funds / The Acquirers PodcastBullish

  Deckers is undervalued; scenario analysis gives roughly $113 base-case fair value versus a $72 downside.

  Carlisle values Deckers through three scenarios. Bear case: HOKA stalls and UGG becomes a fashion downturn, with 2% growth and an 8x terminal multiple, giving $72 against a $77 share price. Base case: management's numbers trimmed, with 3% growth and an 11x multiple, giving about $113 fair value. Bull case: consumer squeeze eases and growth returns to about 4% with a 14x multiple, giving about $160. He assigns 20% to bear, 20% to bull and 60% to base, for a midpoint of roughly $110-115 against $72 downside and $161 upside. He calls it a clean balance sheet and says purely on its financials it is too cheap. He notes it is a one- or two-brand business, not a multi-business like SPGI or Novo, so the deeper discount is compensation for fragility and some discount is not strictly needed.

  “My base case, this is just taking management's numbers and just trimming them a little bit. In that instance, I say 3% growth and an 11 times multiple and that gets me to about $113 as fair value.”at 1:15:57

• Tobias Carlisle · Acquirers Funds / The Acquirers PodcastBullish

  Deckers' buybacks at depressed prices limit downside and concentrate value for remaining shareholders.

  Management is buying back large amounts of stock while the shares are undervalued and has the free cash flow to do so. Carlisle argues this limits downside because each buyback concentrates value in the shares that remain, as with AutoNation and O'Reilly, which have effectively bought themselves out over time. He says that even without a private equity takeover this creates a bid under the stock, and that if growth resumes the shares should run.

  “With management buying back stock, one of the things I really like is when management does take advantage of these undervaluation and they have the cash flow there to do that, that really limits your downside”at 1:17:34

• Stig Brodersen · The Investor's Podcast NetworkUncertain

  Reaccelerating growth after a decline is very hard for footwear brands, so skepticism is warranted.

  Brodersen is puzzled that the stock trades at a 52-week low when its fundamentals look healthy. He thinks part of the reason is base-rate skepticism: he cites Crocs, Under Armour, Skechers, Vans and Lululemon, and says reaccelerating growth after a first decline is very tricky and is simply the nature of the business. He says some of this may already be priced in, and he notes the risk of fashion shifts. He still says the valuation looks hard to see going wrong, so the view is cautious rather than negative.

  “it's very tricky to reaccelerate growth whenever you first see a decline. That's just the nature of the business.”at 1:19:24

• Stig Brodersen · The Investor's Podcast NetworkBullish

  Deckers' capital allocation is excellent; the HOKA acquisition was nearly free and is now a $2.6B brand.

  Brodersen says he absolutely loves Deckers' capital allocation. He points to the HOKA acquisition in 2013, which was almost free and is now generating about $2.6 billion in sales. He admits some of the success needed heavy marketing spend. He asks whether the company should keep this strategy, since its third brand, Teva, is only about 4% of sales. He also says he would like to see management buy shares in the open market.

  “I absolutely love their capital allocation. ... whenever they acquired HOKA, for example, in 2013, it was almost free and now it's doing 2,600,000,000 in sales.”at 1:22:37

• Tobias Carlisle · Acquirers Funds / The Acquirers PodcastBearish

  Real rivals like On and Nike will cap how much Deckers can charge for its running shoes.

  Carlisle says that On is a real competitor and that this will cap how much Deckers can charge for its shoes. He describes the running shoe market as niche and enthusiast-driven, with Deckers effectively a one- or two-brand business facing big competitors such as Nike. He thinks Nike, hurt by its large share price fall, will retool and come back as a stronger competitor. This is a pricing-power risk that he weighs against the buyback support and the valuation discount.

  “Having said that, there are real competitors out there. ON is a real competitor. And so that's gonna cap how much they can charge for these shoes.”at 1:25:48

Novo Nordisk A/S

Across the shows: 1 speaker in other episodes, 1 bullish and 0 bearish calls, past 30 days

• Hari Ramachandra · SalesforceBearish

  Semaglutide generics abroad and Medicare negotiated prices will pressure Novo's margins in the near term.

  Medicare negotiated prices take effect next year and may squeeze margins. Semaglutide patents have expired in India, China, Canada, Brazil and other countries, so generics are expected soon, adding another near-term margin headwind. Ramachandra treats these as the near-term risks that the market is pricing in alongside Lilly's share gains.

  “they all expired in India, China, Canada, [Brazil], and other countries. So you can expect that generics will show up soon.”at 7:08

• Hari Ramachandra · SalesforceBullish

  Novo's amycretin and oral obesity pipeline could drive large upside if it succeeds, which the price ignores.

  Novo's oral obesity pill is already picking up sales, with an annualized run-rate estimate near $2 billion. Its next-generation drug amycretin is in phase three and could launch by 2028. Ramachandra argues the market prices Novo as a permanent number-two player, so success with amycretin or other drugs would change the valuation and drive returns of roughly 18-22%. He admits that figure is hard to model and says this is not a double-next-year pitch.

  “I'll be watching out for that because that will change the equation. If it is successful, that upside is not at all baked in.”at 10:58

• Hari Ramachandra · SalesforceBearish

  Eli Lilly's tirzepatide has the efficacy edge and about 60% share, so Novo faces real share risk.

  Lilly's tirzepatide works better for weight loss than Novo's drugs, including the next-generation Kagrisema, and Lilly now holds about 60% of the market while Novo is a close second. Novo is positioning itself as the cheaper alternative with slightly lower efficacy, and it ignored the approach Lilly took. Ramachandra thinks the market is big enough and patients respond differently to each drug, so the market is not winner-take-all. Still, he calls Lilly's edge a real risk that investors must factor in.

  “Eli has definitely an edge over them, and they have 60% market share today.”at 15:13

• Hari Ramachandra · SalesforceBullish

  Novo's bad news is priced in at about 12x forward earnings, so base-case returns are a modest 8-10%.

  Novo trades about 40% below its 52-week high at roughly 12x forward earnings, versus about 24x for Eli Lilly, and only Pfizer is in a similar range. The market prices Novo as a mediocre company that stays number two in obesity and diabetes and competes on price. Ramachandra's base case is mid-single-digit earnings growth, a 4.5% dividend yield and a 50% payout ratio, giving roughly 8-10% total returns over five years. He flags risks: free cash flow fell below net income last year because of factory capex, so the payout is not fully covered; a new CEO is restructuring; and the 2030-2032 patent cliff looms. He still argues the downside is protected because most bad news is already in the price.

  “So my thesis here is most of the bad news is baked in.”at 21:32

Nike

Across the shows: 5 speakers in other episodes, 4 bullish and 3 bearish calls, past 30 days

• Tobias Carlisle · Acquirers Funds / The Acquirers PodcastNeutral

  Nike's collapse is a broader market issue, not Nike-specific; not interesting to him at current levels.

  Tobias says Nike is about 80% off its peak. Its decline may reflect tariffs, marketing missteps, or simply being too big. He thinks the sell-off is a broader market and cyclical issue rather than a Nike-specific one. He has checked the chart periodically but says Nike is not interesting to him at these levels. He compares it with Deckers, which he prefers on net cash and margins.

  “I think it's a broader market thing rather than necessarily a Nike specific issue.”at 1:07:25

US consumer

• Tobias Carlisle · Acquirers Funds / The Acquirers Podcast

  US consumer squeezed by higher rates, energy and diesel prices, and student loan repayments, hitting discretionary spend.

  Tobias explains Deckers' growth slowdown with macro factors. He says consumer-facing businesses are seeing a real squeeze. Interest rates are up, which hurts consumers. Energy prices are up, and diesel is very expensive, which filters into other prices. Student loan repayments have restarted, which squeezes discretionary spending that would otherwise go to products like Deckers' shoes. He sees these headwinds as cyclical, so consumer slumps create buying opportunities.

  “I think there's a real squeeze on consumers. Interest rates are up, that hurts consumers. Energy prices are up, that hurts consumers.”at 1:09:20

• Stig Brodersen · The Investor's Podcast Network

  Tariffs, diesel prices and inflation make $200 shoes a tricky, discretionary price point.

  Brodersen says a price point around $200 is tricky for shoes. Tariffs, the price of diesel and general inflation are pressuring consumers, and products in this range are highly discretionary. Buyers may skip the purchase or wait six months. He draws a parallel with LVMH, which has been flat despite the idea that wealthy customers always spend. He suggests loyal buyers may say they are loyal but will switch when prices are high enough.

  “There's a lot of pressures from whether it's tariffs or price of diesel and just general inflation. It's tricky for a lot of brands that are in that range where it is pretty discretionary”at 1:20:11

• Tobias Carlisle · Acquirers Funds / The Acquirers Podcast

  US consumers are squeezed on many fronts, hurting discretionary brands now but recovery should come.

  Carlisle argues consumers are squeezed by student loan repayments, grocery costs and gasoline prices, so they delay buying shoes and other discretionary goods. He says this is why discretionary consumer brands are suffering. He compares it with 2021, when stimulus checks produced a huge amount of discretionary spending, and says the cycle will turn so that squeezed consumers have more room to spend and these stocks re-rate higher. He does not give a timeframe.

  “The consumer goes from being squeezed to having better time. I think we saw a huge amount of discretionary money around when everybody got their stimulus checks in 2021. And now we're in the other side where everybody's getting squeezed.”at 1:26:29

US stock market outlook

• Tobias Carlisle · Acquirers Funds / The Acquirers Podcast

  US market is concentrated in AI hyperscalers while most other quality stocks sit in a bear market.

  Tobias says the market has become very concentrated in a handful of AI beneficiaries, the hyperscalers. Everything outside those businesses is in a bear market. He gives examples of previously high-quality companies that sold off hugely, such as Nike, which is about 80% below its peak. He says Deckers' drop also reflects this split, so cheap quality stocks outside the AI trade are being left behind.

  “the market's become very concentrated in a handful of the AI beneficiaries, the hyperscalers. And everything else basically outside of those businesses is in a little bit of a bear market.”at 1:04:03

• Tobias Carlisle · Acquirers Funds / The Acquirers Podcast

  Small cap value's poor run versus large growth is cyclical; its uncorrelated returns are a feature.

  Carlisle manages mid-cap and small-cap US equity funds, with the small-cap fund in value. He says the market has been very bifurcated, with large growth doing very well and small cap value doing very poorly. He argues these things cycle, and that a portfolio with allocations to gold, dominant franchises and small cap value will always have something working and something not. Small cap value is uncorrelated with the rest of the book and often does well when the rest of the market is soft, so he expects better times ahead.

  “It's been a very bifurcated market where large growth has done very well and small cap value has done very poorly. That's not the way that it always is these things cycle.”at 1:28:35

AI regulation & safety

• Hari Ramachandra · Salesforce

  OpenAI and Anthropic's push for regulation is likely regulatory capture that would hurt startups and open source.

  Ramachandra argues that frontier labs' calls for regulation are a strong case of regulatory capture at an early stage. He says the real risk falls on startups and the open-source community, not on big incumbents like Google, Microsoft or Meta. He cites the pharma model, with years of FDA approval, lawyer teams and big-pharma dominance, as the outcome the AI industry fears. Lab leaders use pharma as their example, which he thinks shows how the industry sees the risk.

  “yeah, there is a risk of regulatory capture and especially in this early stage of the game. And I think the risk is not for other big companies like Google or Microsoft or Meta. The risk is for a lot of startups and the open source community.”at 26:32

Tariffs & trade policy

• Tobias Carlisle · Acquirers Funds / The Acquirers Podcast

  US push to reshore manufacturing from China is a durable policy that will persist beyond any government change.

  Carlisle says the administration is trying to re-industrialise America and move manufacturing away from China. He doubts this changes with a change of government, so he sees it as a longer-term focus. He expects a lot of volatility while policy is worked out, but thinks the intention will not change over time. This is the main policy risk to Deckers, which is a one- or two-brand company that outsources production.

  “The administration is really looking to re industrialise America. I don't know if that policy changes with a change of government, but probably not.”at 1:27:00