Portfolio Insights: Alger Weatherbie Specialized Growth Strategy


I had a meeting with Siteone recently and what they're seeing is they're actually benefiting from the technology applications that you can do as a larger corporation, even in an industry like this. For example, they rolled out Siteone.com, which is a website but also an app that landscapers can, the night before they go onsite the next day, order all their materials. They can literally have all the materials they need for the next day delivered right to the site. It's an incredibly powerful tool that saves you time or if you want to pick it up yourself, it's already on a pallet and ready to go. I'm sure there are some people who would find reasons to complain about a company like Siteone. Inevitably it's going to become a bit more corporate. They don't buy the loser in the region. They buy the best players in the region. They keep those people on. Those people keep those relationships with the local contractors. And it's an incredibly strong model. I think there's a lot more upside when Siteone corporation moves in and kind of professionalizes a market like they do. Speaker Question : I'd like to know if the team is looking at any artificial intelligence (AI) companies and if so, what are your top few picks? Thanks. Josh Bennett : We are absolutely investing in AI. The application of AI is interweaved into many of the companies that we're looking at. We're always keeping an eye open for companies that are specific or exclusive to AI. What we're noticing is that AI is a tool that's being integrated into the business model of many of our companies. For example, XPO Logistics on the transportation and logistics side. They're using artificial intelligence machine learning on a very active basis to look at their labor staffing program for example. Inevitably transportation has seen some pressure and needs to quickly adjust staff. They can do that by looking at the time of day, the time of the year, the month the data that are coming in about new orders coming in that needs it then quickly be turned around. Their labor staffing tool is using AI and machine learning in a way that is much more powerful than just the paper format that people used to use in scheduling workers. You can schedule

workers literally throughout the day to come and go as they're needed and effectively leverage the labor since labor is in short supply.

Similarly, XPO Logistics also has a warehousing operation. They're using artificial intelligence to help them decide where in a warehouse you would put certain types of products and certain freight. They're possibly using the application of artificial intelligence to optimize their system, to optimize their network from a labor perspective, from even an asset placement perspective at a warehouse. I could go on and on about other examples of AI, but I would say that as I look at our portfolio of 50 companies, we're seeing the application of AI throughout many, many of our companies. I would say that the vast majority of our companies are using AI in one form or another. Speaker Question : A question on a couple of names in the portfolio that have been impacted by the current environment. One being Planet Fitness. I know a couple fitness chains have gone bankrupt. Curious as far as the current environment, how they're going to come out of that. And also Wayfair. You had some concerns about the supply chain not too long ago. Why don't we get your thoughts on those two? Thanks. Josh Bennett : Sure. Thanks. And again, thank you for being a long time partner with Weatherbie Capital. We really appreciate your business. Let's talk about Planet Fitness and then Wayfair. We would put Planet Fitness in the bucket of a pretty severe impact in the near term from the stay at home mandate and essentially gyms being forced to close, but we believe they’re squarely in that bucket of companies that are going to benefit in a tremendous way when they come out the other side.

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