Proto Labs: Low-Quality Growth Remains An Issue

Group 1 - Proto Labs (PRLB) reported solid results in Q3, but the post-earnings share price decline indicates investor disappointment, likely due to low-quality growth in Network and CNC machining affecting margins [1] - The surge in CNC revenue in the first quarter has not sustained, contributing to the overall margin pressure faced by the company [1] Group 2 - Narweena, an asset manager led by Richard Durant, focuses on identifying market dislocations caused by misunderstandings of long-term business prospects, aiming for excess risk-adjusted returns through secular growth opportunities [1] - The research process at Narweena emphasizes company and industry fundamentals to uncover unique insights, with a high risk appetite and a long-term investment horizon targeting deeply undervalued stocks [1] - The investment strategy is influenced by demographic trends, such as an aging population and low population growth, which may create new opportunities in markets facing stagnation or secular decline [1] - The economic landscape is shifting towards asset-light businesses, leading to a decline in infrastructure investment needs, resulting in a large pool of capital chasing limited investment opportunities, thus driving up asset prices and compressing risk premia [1]