JDG
🇬🇧 Judges Scientific, a UK firm acquiring scientific equipment makers, exports over 85% of its products, with the US being a key market, potentially exposing it to tariffs.
🔬 Despite tariff risks, its specialized products (spectrometers, microscopes) have high switching costs for clients like universities, offering resilience.
📈 The company shows historical resilience with minimal organic decline and could leverage market downturns to acquire smaller competitors at lower valuations.
@adriarivero:
“Let’s go with the first one, which is Judges Scientific. It’s a British company that buys and manages small companies that manufacture scientific and laboratory equipment for research, especially for universities. A company that has done very well in the stock market with very high sales growth. Some examples of its products are spectrometers, advanced microscopes, equipment for materials analysis, etc. Now, importantly, where does Judges sell its products? Although it’s a UK company, more than 85% of its income is exported, meaning from abroad. The United States is one of its main markets. Okay, first of all, Judges is a crisis-resistant company. Very few times has it had negative organic growth; just look at this table and in 2008. Now, can a trade war affect it? Yes, potentially yes, due to tariffs on its exports and sales to the United States. Tariffs on products from the United Kingdom make Judges’ equipment more expensive in its key market, which could cause them to lose sales to local competitors or force them to reduce margins if they absorb that cost. Now, they also stand to benefit indirectly if other countries suffer, and suffer more. For example, if the United States imposes strong tariffs on China, Judges could gain relative competitiveness or in comparison in markets where it competes with Chinese companies. Furthermore, most of Judges’ products are technically complex and highly integrated into research processes. Clients often cannot simply switch suppliers. If you’ve been using a spectrometer for 5 years and your entire team is trained on it, you don’t change it for a new one because there’s a 10% price increase. And then there’s a possibility of seizing opportunities. In crisis or trade war scenarios, many valuations drop, as we are seeing in the markets. Judges could buy small scientific companies cheaper and expand its product portfolio. As Leandro says in one of his publications, we can apply a fairly high and resistant rating to Judges in terms of resilience against a recession and a trade war.”
Watch the exact part of the video where @adriarivero talks about Judges Scientific here:
Watch the video on YouTube
Read more articles analyzing Judges Scientific (JDG) at the following link. JDG stock.
