FIX - Up 100% In 4 Months - Building Data Centers As Fast As They Can!

Summary

The video script discusses two companies, Modine and Comfort Systems USA (Fix), that are capitalizing on the immense demand from tech giants like Google, Amazon, and Microsoft to build massive data centers for their AI and computing initiatives. The demand is so high that these construction firms can barely keep up, leading them to acquire other companies and charge premium prices. The narrator enthusiastically examines their financials, growth prospects, and stock performance, positioning them as compelling investment opportunities to ride this AI-driven construction boom.

Takeaways

• 😄 Modine and Comfort Systems USA (ticker: FIX) are benefiting from a surge in demand for data center construction driven by tech giants like Google, Amazon, Microsoft, and Meta.
• 🏗️ These companies are involved in constructing massive data centers required to support the computing power of AI systems like Jensen's GPUs and Cerebras' supercomputers.
• 📈 Modine's stock is up 100% over the last 4 months, while FIX has gained 107% in the past year, largely since October 2023.
• 💰 FIX's revenues grew 26% year-over-year, and its backlog of orders increased by $1 billion (20%) to $5.2 billion, with some customers paying upfront.
• 🌐 The demand for data center construction is so high that these companies are being selective about clients and acquiring other firms to meet the unprecedented demand.
• 💥 The speaker believes this is an extraordinary opportunity fueled by tech giants' willingness to spend heavily to enable transformative technologies like AI.
• 📊 FIX's earnings are expected to grow 26% in 2024 and 13.6% in 2025, reflecting the sustained demand for their services.
• 🕵️ The speaker researched FIX by analyzing its earnings reports, CEO commentary, stock charts, and technical indicators to identify potential buy-in opportunities.
• 💎 The speaker suggests investors should strategically position themselves to capitalize on this once-in-a-lifetime opportunity by investing in companies like Modine and FIX.
• 🔍 Further analysis is required to determine the optimal buy-in prices for these stocks based on technical indicators and potential market corrections.

Q & A

What companies are discussed in the script?

The main companies discussed are Modine, a company in the air conditioning business, and Comfort Systems USA (ticker symbol FIX), a building contractor company.

What is the reason behind the growth of these companies?

The growth is driven by the demand from big tech companies like Google, Amazon, Microsoft, and Meta to build and revamp massive data centers to handle the accelerated compute capacity required for advancements like Jensen's GPUs and Char's supercomputers.

How are these companies meeting the high demand?

Both Modine and Comfort Systems USA are going out and acquiring other companies to increase their capacity and meet the demand. They are also being paid upfront by clients to prioritize their projects.

What is the significance of the positive cash flow being greater than revenue for Comfort Systems USA?

It highlights the high demand and the clients' willingness to pay upfront to secure their projects, showing the favorable position the company is in.

What is the process followed by the speaker to research Comfort Systems USA?

The speaker looks at Seeking Alpha for stock performance and earnings estimates, listens to the company's earnings call, analyzes the CEO's comments, and evaluates technical indicators like moving averages and Fibonacci retracements.

What is the significance of the growth in the backlog for Comfort Systems USA?

The increase in backlog by $1 billion (20%) from the previous year indicates a strong pipeline of future work and revenue for the company.

How does the speaker view the future potential of these companies?

The speaker believes that the demand for building data centers will continue for at least five years or more, presenting a significant opportunity for companies like Modine and Comfort Systems USA.

What is the next step mentioned by the speaker?

The next step is to determine the optimal buying price or entry point for the stocks of Modine and Comfort Systems USA, considering technical indicators and potential dips or corrections.

What is the speaker's overall assessment of the situation?

The speaker views this as an opportunity of a lifetime, driven by the massive investments and demand from big tech companies to build the infrastructure required for their future advancements and offerings.

What is the speaker's call to action at the end of the script?

The speaker encourages listeners to sign up for their Platinum program, which is currently on sale, to get insights on determining the buying opportunities for Modine and Comfort Systems USA stocks.