Stock Spotlight: Techtronic

Hello, I'm professional stock picker Tye Bousada and this is why I'm invested in Techtronic on behalf of the Alliance Witan portfolio.

Techtronic makes tools that people use to build things like data centres, power generation facilities or homes.

Skilled labour is harder and harder to find, and they make tools that help the skilled labour be more efficient and safer. In fact, they're the biggest and the best at it in the world.

There's a positive industry change going on that benefits them. On the efficiency side, it starts with things as basic as the world is moving away from corded tools to cordless tools. Techtronic is the number one cordless power tool company in the world for professional contractors.

But beyond the basics of cordless, they extend into speciality areas like tools for electricians working on a solar panel farm or at data centres. If you can improve the productivity of an electrician by 10%, then that tool is not only in high demand, but the maker of that tool can charge a lot given the savings that it delivers.

Their total addressable market is ten times their revenue. The addressable market keeps growing and they're taking share in that market.

Then there's some positive company changes on the safety front. For example, let me give you two specific cases.

When you're doing construction on a road and you dig up the road, you could come across powered lines. You could call the electricity provider and ask them to shut off that lines, but you don't know for certain they're shut off, as opposed to have a human cut through those lines.

What they've come up with is a remote control tool that the human can stand far away from and cut through those lines. For those rare occasions that the lines are still electrified, it saves lives.

Another example would be 14 people died of heat stroke in Texas alone in 2025, while on construction sites. Techtronic came up with self-cooling safety helmets that helped fewer people die. The actual job inspectors who go to inspect safety on these job sites today are actually wearing Techtronic helmets.

The big question is, is how do these positive industry and business specific changes give us the opportunity to buy growth for free?

Well, the market is worried about the stagnant home construction market today that has led to Techtronic trading below their historical valuation levels.

In spite of these new home construction headwinds, we believe that Techtronic is going to grow their earnings in the mid teens rates per year over the next 3 to 5 years.

This growth comes from the positive industry and company changes that we just spoke about. We think that today's valuation is giving us the opportunity to buy tomorrow's growth for free.