I am hoping you are not pulling a fast one, on me . Great past track record, great chemistry skills, low cost production, and low valuation is all you need for a long-term investment decision? Taking cues from past track record, and everything else as a given - is a typical System1 Response call - which is probably adequate for very smart folks - its never been that simple for me.
Only when one believes Competitive Strategy/Position and Value are joined at the hip, will someone see value in Competitive Analysis. I am a bit surprised - are we saying Porter’s Competitive Analysis framework is useless in Business Analysis- we should only do broad-strokes investing? Doesn’t matter (even) for someone considering a concentrated portfolio bet with upwards of 10% allocation??
If you are a HM Bhakt, and He says in the essence Risk Control of the Portfolio comes from only one thing - Gap between Value and Price. He further elaborates, for that you need to KNOW Dependability and Stability of Value. Anyone will agree, dependability and stability of Value comes from the dependability and stability of future Cash Flows. And if you take this one step further - what does dependability of future cash flows depend on??
Only one answer - depends primarily on Stability of the Industry, and dependability and stability of the Competitive Position of the Business in its Industry. Today’s competitive position is a derivative of the competitive strategies deployed by the Management - which in turn is a derivative of the conscious choices made by the Management - Product segment, Market Sizes & Volumes, n stage chemistry, capacities vis-a-vis what the competition is doing (based on their unique strengths). I am hardly the person to explain the linkages with any lucidity, but those genuinely curious (unfamiliar) - can refer to excellent literature that exists, on topic.
It will be good to understand the competitive strategy (if we can) deployed by Divis - the how’s and the why’s - of the conscious product choices made -high volume, high sustainable market share/but low growth with the mix of faster growth, higher competition new segments. We don’t know what this might or might not reveal, but we sure do have an open mind about following due process of business analysis. At the least, the exercise will lead to better understanding of the business, product choices, competitive landscape, and hopefully reveal some insights on strategies deployed by the management - useful for any long-term holder of the business.
Frankly I am a bit annoyed now at persistent attempts - to stymie - a closer look at the business and management. Those who do not see value in the exercise - for the umpteenth time - can they just humour those who want to go-ahead and complete the exercise, please. Its always good to have an open mind, even when you might be convinced about the futility of an exercise. Who knows what the exercise reveals - let’s enjoy the process of discovery.
Please refrain from a rejoinder - please DO NOT clutter up a potentially good business analysis - that is impartial to any views held on either side - it is all about knowing more about the business - a focus on putting ALL the FACTS on the TABLE.