Core Viewpoint - Badger Meter Inc (NYSE:BMI) is highlighted as a promising small-cap stock, benefiting from the growth in water utility infrastructure and technological advancements in flow measurement solutions [1][2] Company Overview - Badger Meter Inc specializes in flow measurement, quality, and control solutions, primarily for water utilities [1] - The company has a strong balance sheet with $295 million in cash and no debt, indicating financial stability [2] Growth Metrics - Badger Meter has achieved a compound annual growth rate (CAGR) of 14% in revenue over the last five years, significantly outpacing the industry average growth of single digits [2] - The company generated $827 million in revenue in 2024 and operates in a total addressable market estimated to be around $20 billion [2] Technological Advancements - The company enhances traditional monitoring systems by integrating advanced technology, improving the accuracy and capabilities of its meters [2] - Badger Meter's technology includes optimized data transmission from meters, sensors for monitoring water pressure, leak detection, and in-line water quality testing [2] Market Position - Badger Meter is well-positioned in the market due to the ongoing replacement of aging conventional meters in water system infrastructure [2]

Core Insights - Badger Meter (BMI) specializes in flow measurement, water quality, and control technologies, benefiting from advanced technology adoption in recent years [1] Group 1: Company Overview - Badger Meter has a strong business foundation and has seen growth due to the integration of advanced technologies [1] Group 2: Investment Strategy - Narweena, led by Richard Durant, focuses on identifying market dislocations caused by misunderstandings of long-term business prospects, aiming for excess risk-adjusted returns [1] - The investment approach emphasizes company and industry fundamentals to uncover unique insights, with a preference for smaller cap stocks and markets with less obvious competitive advantages [1] - The firm operates with a high risk appetite and a long-term investment horizon, targeting deeply undervalued stocks [1] Group 3: Market Trends - An aging population with low growth and stagnating productivity is expected to create new investment opportunities, differing from past trends [1] - Many industries may experience stagnation or secular decline, which could paradoxically enhance business performance due to reduced competition [1] - Conversely, some businesses may face rising costs and diseconomies of scale, while asset-light businesses are becoming more dominant, leading to a decline in infrastructure investment needs [1] - A significant amount of capital is pursuing a limited number of investment opportunities, resulting in increased asset prices and compressed risk premia over time [1]