Barron's: Dan Chung Profile

death experience. It has one of the most advanced pumps, and while they may look simple, they are pretty complicated. So Tandem faced delays and questions about competitiveness, and when it might run out of cash. The pump is now approved, is working quite well, and has been well received. Tandem got its products sorted out; it got its finances sorted out, and it is benefiting also from Roche Holding [ROG.Switzerland] and Johnson & John- son [JNJ] exiting the U.S. pump market. Tandem does have to prove it can be prof- itable, but our experience has shown that in small-caps, it is much more important that a company be in a healthy, growing market. Not to sound like a broken record, but what does that have to do with the internet? Tandem has a partnership with Dex- Com [DXCM], a company we also are

invested in, which makes a continuous glucose monitor. It measures levels con- tinuously and signals to Tandem when it’s time to do an automatic insulin dosage. The device’s alerts don’t have to be just for the user; they can be for doctors, so hopefully all of that data will provide even better ways for managing diabetes, a huge problem in the U.S. and in the world. A Tandem device looks kind of like an iPod, compared with a CD player from the big competitor in this field, Medtronic [MDT], which has around 70% of the market. Tan- dem’s pump is 40% smaller and lighter, and its software and connectivity is a meaningful advantage. This is another ex- ample of how internet, mobile, and data are changing health care. And it’s changing how retail brands reach their customers, too, isn’t it? Puma [PUM.Germany] hasn’t been cool

for a long time, and it struggled when it was part of luxury retailer Kering [KER. France]. Kering spun out Puma, and that will free up management to really inno- vate and invest in the business. Puma has an innovative marketing thread focusing also on what is really happening with sneakers, and it uses social-media celeb- rity influencers to boost its products, an approach that is actually fairly new. Nike [NKE] signs up big athletes and pays them a lot of money, but on social media it is a little bit behind. Puma’s not going to pay a lot of money to try to get a big sports star. Its margins had gotten down to 2.8% in 2015, but it’s targeting 10% by 2022. We see an opportunity here for 10% top-line growth and earnings growth of over 20%. Thanks, Dan. n

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