This business holds a 5% market share but has been growing its total revenues at a CAGR of 22.32% since 2014, achieving a cumulative growth of over 1,200% during the same period.
Great write-up and nice company. I bought MEDP in 2022 in the 140s when the CEO purchased a lot of shares. Got out last year but watching it again in weakness.
I typically invest with a long-term horizon, but this turned into a shorter holding period due to its extraordinary performance. When the stock reached $400/share last year, I felt less confident that it could continue to meet my personal hurdle rate of 12-15% CAGR over the next few years. As a result, I decided to take profits and wait for weaker price action before reconsidering.
While I generally prefer not to sell stocks with solid fundamentals, I make exceptions when a position runs up too far, too quickly.
To be honest, I hadn't come across the company culture concerns a couple of years ago and haven’t revisited the company in-depth recently. It’s possible those issues were present then as well. Great point about the employment culture—it's definitely something to consider going forward.
Fantastic deep dive.. I am happy to have subscribed to your substack, brother.. I bought medpace last year at 380$, currently at a loss 🥲 due to the impact fuelled by book-bill ratio.
Also, would be great if we can have a whatsapp chat or some other social group for interacting with you brother. Keep up the good content..thank you!
Also, would be great if you could help with a deep dive of $MCK, once you get time. Cheers!
Thank you. I genuinely do appreciate it! If Medpace keeps rolling the way it does now (slightly improve their culture), I have no doubt you'll be in drawdown much longer, haha.
Great, detailed review. I have followed the business results over the last few quarters and was considering adding with recent depressed prices. I was shocked by what you found about the culture. Very disappointing but good to know. Thanks for sharing your excellent work.
I’m equally surprised by Medpace’s culture—it’s one of the most concerning aspects I’ve come across in a long time. Fundamentally, everything else seems to be heading in the right direction for Medpace. If company culture isn’t a dealbreaker for you, its current valuation could make it a compelling addition to your portfolio.
I was also surprised about the culture. I thought it might be really good if you take a look at the time Managers are working there. Most are there for 20 years.
The tenure of management is excellent. Most of them have been active with Medpace for an extended period, which is good. But, the culture lingering around at Medpace, according to (ex) employees, worries me. Ideally, both management and employees have long tenure with the company. However, if either management or employees have short-lived careers at a company, something isn't adding up.
you're right. that worries me too. the question is why they still perform so well and are so successful. after all, a bad culture and dissatisfaction always lead to failure. btw: I own shares for years now.
Medpace Investors L.L.C. is an LLC set up by Medpace Holdings, as reported on its SEC Form 4. This type of LLC allows management or other insiders to retain a controlling interest, offers heaps of tax benefits, allows flexibility in managing voting rights and profit distribution, and offers a legal shield, liability protection for the owners.
(In the case of Medpace, this LLC might be tied to the company's founders, executives, or early private equity investors who retained equity after the IPO)
Great write-up and nice company. I bought MEDP in 2022 in the 140s when the CEO purchased a lot of shares. Got out last year but watching it again in weakness.
Why did you go out of Medpace, did your thesis change? And did it change again since you’re considering investing again?
I typically invest with a long-term horizon, but this turned into a shorter holding period due to its extraordinary performance. When the stock reached $400/share last year, I felt less confident that it could continue to meet my personal hurdle rate of 12-15% CAGR over the next few years. As a result, I decided to take profits and wait for weaker price action before reconsidering.
While I generally prefer not to sell stocks with solid fundamentals, I make exceptions when a position runs up too far, too quickly.
To be honest, I hadn't come across the company culture concerns a couple of years ago and haven’t revisited the company in-depth recently. It’s possible those issues were present then as well. Great point about the employment culture—it's definitely something to consider going forward.
Fantastic deep dive.. I am happy to have subscribed to your substack, brother.. I bought medpace last year at 380$, currently at a loss 🥲 due to the impact fuelled by book-bill ratio.
Also, would be great if we can have a whatsapp chat or some other social group for interacting with you brother. Keep up the good content..thank you!
Also, would be great if you could help with a deep dive of $MCK, once you get time. Cheers!
Thank you. I genuinely do appreciate it! If Medpace keeps rolling the way it does now (slightly improve their culture), I have no doubt you'll be in drawdown much longer, haha.
And we have a subscriber chat. You can join via the link: https://substack.com/chat/2394905.
I'll add McKesson Corp. to the list, brother! I'll see you in the chat. 😎
Great, detailed review. I have followed the business results over the last few quarters and was considering adding with recent depressed prices. I was shocked by what you found about the culture. Very disappointing but good to know. Thanks for sharing your excellent work.
I’m equally surprised by Medpace’s culture—it’s one of the most concerning aspects I’ve come across in a long time. Fundamentally, everything else seems to be heading in the right direction for Medpace. If company culture isn’t a dealbreaker for you, its current valuation could make it a compelling addition to your portfolio.
I was also surprised about the culture. I thought it might be really good if you take a look at the time Managers are working there. Most are there for 20 years.
The tenure of management is excellent. Most of them have been active with Medpace for an extended period, which is good. But, the culture lingering around at Medpace, according to (ex) employees, worries me. Ideally, both management and employees have long tenure with the company. However, if either management or employees have short-lived careers at a company, something isn't adding up.
you're right. that worries me too. the question is why they still perform so well and are so successful. after all, a bad culture and dissatisfaction always lead to failure. btw: I own shares for years now.
As long as the fundamentals aren't suffering, investors will not mind. The fundamentals are excellent despite the awful culture.
Thank you for the article.
On insider ownership and skin in the game:
yahoo finance is showing 17% insider ownership
tikr shows 14M shares (15% outstanding) held by "Medpace Investors L.L.C"
any idea what this is?
Thank you, Joe!
Medpace Investors L.L.C. is an LLC set up by Medpace Holdings, as reported on its SEC Form 4. This type of LLC allows management or other insiders to retain a controlling interest, offers heaps of tax benefits, allows flexibility in managing voting rights and profit distribution, and offers a legal shield, liability protection for the owners.
(In the case of Medpace, this LLC might be tied to the company's founders, executives, or early private equity investors who retained equity after the IPO)
I see. So why would that portion be excluded from your "insiders ownership" ?
It didn't cross my eyes when I looked into this, or I missed it. I'm looking into adding this a.s.a.p.
oh okay cool.
thanks for the response.
and thanks again for the article
:D
My pleasure, Joe! Thank you for the tip on Medpace’s inside ownership (!!)
Great deep dive!
Thank you, Steven! I truly do appreciate it. 😁