I’ve been reading Hermann Simon’s excellent “Hidden Champions of the 21st Century” recently. In the book, Simon examines the characteristics and strategies of the world’s “unknown” small and mid-cap market leaders. In order to qualify as a hidden champion, the company must satisfy the following 3 criteria:
- No. 1, 2, or 3 in the global market, or no. 1 in its continent;
- Revenue below $4 million; and
- Low level of public awareness.
While the book is primarily aimed at business managers (i.e. potential clients of Simon’s consulting firm), it contains a wealth of business insights for investors. It’s also decent source of potential investment ideas. In Chapter 1, Simon lists 53 random hidden champions from across a wide range of industries. I decided to find out which of them are publicly traded or owned by a publicly traded parent. The answer: 25. There is a link at the end of this post to a excel list of the 25 companies together with some very rough/basic notes.
Some of these hidden champions aren’t really hidden anymore (Zimmer, DePuy, Stryker). Others aren’t really champions anymore (De La Rue). But there’s plenty of interesting companies that I’ve never heard of that are going on my watchlist. And I’ve only looked at 53 names of the 2,000 total hidden champions on Simon’s list. Plus there’s another 150 hidden champions in Peter McKiernan’s version of the book which focuses on Central and Eastern Europe.
Shoot me an email at streetsofvalue@gmail.com if you have a view on any of these companies or if you’ve carried out a similar exercise.
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