Edward H. Heller, the famed venture capitalist of the early 20th century, had a knack for spotting small-cap stocks that would make their investors a lot of money as they grew to become mid-cap stocks. Heller said that he invested in companies that could be described as “vivid spirits”, which he further defined as companies focused on maintaining low costs with robust product improvement lines and an insatiable appetite for gaining market leadership.
If Heller were around today, I suspect he would put serious money into WD-40 Company (WDFC), the San-Diego based company known for its eponymous oil-based spray cans.
It is the largest distributor of canned sprays direct to consumers, and elects to charge a slight premium compared to generic Sam’s Club / Wal-Mart / Target brands. When the product was first sold in its familiar packaging to consumers in 1969, the profit margins were only 4.5% (with the … Read the rest of this article!