Halma: High quality compounder in safety, health and environmental technologies

A sustainable compounding champion, offering a resilient and diversified growth profile coupled with high margins, ROIC and exceptional execution

Welcome to the 13th investment case and 12th resilience and 4th AI & data center idea on Crack the Market (and the most comprehensive Halma investment case you will find online)! Join me as I dissect one of my favorite compounders out there, with a balanced growth profile (by geographies, end markets and organic/inorganic), a business at the cross section of many structural megatrends (urbanization, demographics, resource constraints) and a phenomenal track record with 22 consecutive years of record profits.

Twice a week, I will release deep dives into stocks and sectors that fit into the three themes that I see winning in this age of tariffs and deglobalization: resilience, sovereignty & reshoring, China. I will then deep dive into the opportunities in the AI data center value chain.

Take advantage of this once in a generation opportunity to build long term wealth by investing in great stocks that will deliver returns for your portfolio for years to come.

You can already read my first 12 deep dives, all of which I see as winners in this new world of tariffs and deglobalization:

• ASML (reshoring & China idea): The most innovative company in the world will 2.5x its EPS by 2030.

• LKQ (resilience idea): The most defensive business in the auto industry is a tariff winner and could become a compounder.

• Atlas Copco (resilience, reshoring & China idea): The best industrials business in the world is on sale, extremely resilient and will benefit from US reshoring.

• Badger Meter (resilience idea): The perfect business in the perfect end market, water meters are the definition of resilience.

• Knorr Bremse (resilience idea): Who knew making brakes was this lucrative? Rerating with self help story and upside from German infra plan.

• Flex (reshoring idea): The electronics manufacturing giant building Nvidia’s servers and enabling reshoring is becoming a better business.

• Itron (resilience & reshoring idea): Riding the grid investment super cycle and enabling smart grids.

• Roper (resilience idea): A resilient cashflow compounder in the software space with inflecting growth.

• RELX (resilience idea): The company to own forever – one of the very best businesses on Earth.

• CPKC (resilience & reshoring idea): The rail connecting Canada/US/Mexico and benefiting from reshoring.

• Novo Nordisk (resilience idea): The most exciting pharma company in the world is misunderstood and its growth engine is ready to roar back to life.

• Kurita (resilience, reshoring & China idea): Water services expert with improving margins and benefiting from reshoring of semiconductor production.

After reading this article, you will understand why this company is so special thanks to its proven decentralized governance model, what it does, why it is so defensive thanks to leadership positions in non discretionary niche markets, why its inorganic growth could be at an inflection point and why it remains one of the best businesses to own for the next decade.

In this article I go through:

1. Halma’s business and how it dominates critical and resilient niches in the safety, environmental and healthcare space.

2. The exceptional track record of this compounder over the last decade+.

3. How the company is positioned to continue to deliver HSD/DD growth for the next decades thanks to its large portfolio at the cross section of many megatrends.

4. Why its decentralized governance model and sustainable growth model (with a two pronged organic and M&A engine) make it a defensive capital compounder.

5. Why the market underestimates its growth (with the inorganic growth possibly at an inflection point) and how Halma is a beneficiary of the AI data center infrastructure buildup.

Halma Investment Case