This is Matt Reustle and today we are breaking down the home improvement giant, The Home Depot. In the US, The Home Depot is a key ingredient to a nice little Saturday but beyond the power tools and building supplies is an excellent story of business execution. Why has Home Depot been such a strong performer following a housing crash in the e-commerce revolution? I’m joined by Sean Stannard-Stockton of Ensemble Capital to break that down. We cover how Home Depot transitioned their approach to business, from customer focus to capital allocation, and while Home Depot has reported strong earnings growth over the past decade, and beyond that, this isn't a simple story about a growing footprint. Please enjoy this breakdown of The Home Depot.   Don’t miss our first written Breakdown. David Kim from scuttleblurb joined us to break down the best in class trucking business, Old Dominion Freight Line. You can read the interview here.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.   -----   Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.   Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.   Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt   Show Notes [00:03:10] - [First question] - What the customer strategy is for Home Depot and how it differs from Lowe’s [00:05:28] - How the sales process works for a pro versus a DIY builder  [00:07:38] - The size of the addressable market and how much of it Home Depot controls [00:08:47] - Home Depot’s history and its role in developing and growing their industry  [00:11:39] - When Home Depot was founded and their original go-to-market strategy  [00:13:38] - What drove their decision to stop expanding stores and honing their offering [00:14:56] - Their revenue model and growth over time and the correlation between revenue and the housing market  [00:18:10] - How much revenue growth can be traced to in-store traffic and what’s driving it [00:21:55] - Overview of their economic model as a whole [00:23:42] - Their earnings profile and overall leverage compared to Lowe’s  [00:24:54] - How they position themselves for more of their business to be done online and thoughts on their CAPEX budget [00:27:56] - Who Home Depot purchases from and how they navigated the pandemic [00:37:09] - Thoughts about Home Depot’s growth over the next three to five years [00:41:40] - How much historically there has been a growth lag after bubbles and crashes  [00:44:12] - Whether or not new home purchases and refinancing during the pandemic might impact Home Depot’s trajectory [00:47:27] - Thoughts on Amazon potentially becoming a competitive threat [00:49:37] - Other risks that are top of mind when thinking about Home Depot’s future [00:53:51] - Lessons for investors and builders when studying Home Depot’s story

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Archaea Energy. Archaea is one of the largest and fastest growing providers of renewable natural gas in the US. The company uses methane produced by landfills as its feedstock to create renewable electricity and natural gas. To break down Archaea, I’m joined by Chadd Garcia. Chadd is lead portfolio manager of the Ave Maria Focused Fund and co-portfolio manager of the Ave Maria Growth Fund. You may have seen Archaea in the news this week. On Monday morning, BP announced a deal to buy Archaea for $4.1 billion US. We recorded on Friday before this news broke. The bulk of our discussion, therefore, does not touch on BP. It serves as an explanation for what BP has bought and why they found it to be an attractive asset. At the end of our conversation, we asked Chadd for his quick reaction to the news. Please enjoy this business breakdown of Archaea Energy.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.   -----   Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.   Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.   Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt   Show Notes [00:02:59] - [First question] - Defining landfill gas and its historic and current state [00:05:50] - What Archaea is, their business scale, and economic profile [00:07:44] - The waste hauling value chain and how money is made in the ecosystem  [00:11:33] - How Archaea takes something that’s perceived to be worthless and profits from it [00:15:47] - The way the company is organized to capture and capitalize on this opportunity set [00:17:56] - How much visibility they have into their future earnings [00:19:04] - The renewable fuel standard and how revenue is derived from it  [00:20:10] - Explaining how you produce renewable natural gas from a landfill [00:24:52] - The unit economics of a single Archaea landfill to gas site  [00:25:40] - How much capital can be deployed into one of their projects [00:26:45] - What differentiates and makes Archaea defensible from private equity companies  [00:27:51] - The history of the company, how it was founded, and its major players [00:29:57] - Thoughts about the size of the untapped opportunity in this sector [00:31:57] - Where is Europe in doing something comparable to this  [00:32:59] - Free cash flow conversion and financing requirements [00:34:18] - The current state of the competitive landscape    [00:37:37] - The key risks for a business like Archaea [00:40:30] - Lessons learned from studying Archaea from an investor’s and operator’s perspective [00:43:02] - His reaction to the news of Archaea being purchased