# Exponent, Inc. (EXPO)



## MrBlackhill (Jun 10, 2020)

Anyone holding this US stock?

This stock amazes me. I've never found a stock growing at that pace while being extremely stable.

From 2000 to 2020 :

It grew at a rate of *25%* CAGR
Its average rolling returns for 3, 5, 7, 10 and 15 years is between 22% and 24% CAGR.
_Yes! Pick any window and you'll make money!_
Its lowest 3-year return? 12% CAGR
Its lowest 5-year return? 15% CAGR
Its lowest 7-year return? 18% CAGR
Its lowest 10-year return? 19% CAGR
Its lowest 15-year return? 22% CAGR

It had a max drawdown of -33% in 2008, which was 2 years 7 months underwater. (And that was worse than its 2000 drawdown, ha!)
Should I recall you that SPY had a -50% drawdown in 2008, which was more than 4 years underwater?
Or that SPY had a -45% drawdown in 2000, which was more than 6 years underwater?
Or that XIU had drawdowns of -45% in 2000 and 2008, which were more than 5 years underwater?

Interestingly, it's an engineering and scientific consulting firm. I don't know what they're doing, but they're doing it right!

_By the way, the stock is older than that and wasn't always that steady. It started its journey in 1990 and had almost immediately a huge -85% drawdown that bottomed in 1995. Things improved from 1995 to 2000, then from 2000 until now, it's been amazingly stable. Yes, people who bought that stock in 1991 had to wait 13 years to break even. From a recurring cash flow perspective, they started making money in 1995 after 4 years of bearish sentiment for the stock._


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## MrBlackhill (Jun 10, 2020)

I was looking back at some stocks on my watchlist and this stock continues to amaze me. On a logarithmic scale, it's a straight line since 1999. That means that its share price return is very, very steady.

When I posted this thread a year ago, Portfolio Visualizer was still doing rolling returns on a yearly roll, now it's monthly so it's more precise and accurate.

Can't you just appreciate that for over 20 years, this stock always had positive returns for any 3-year window? That's very unusual.

This science & engineering stock looks like it's... engineered to return a steady 23% CAGR. 

I'm wondering how long this will continue. I guess it'll have to stop at some point because if you look at its historical P/E it was 10 back in 2000 and it's been increasing steadily to a P/E of 50 as of today... But then if their performance is strongly tied to interest rates, well the 10Y rate was at 6.5% back in 2000 and now it's 1.5%... Still, a P/E of 10 is a 10% yield, while a P/E of 50 is a 2% yield. So in all cases those yields are about 50% higher than the respective 10Y rate. Not sure if this analysis makes any sense, but maybe it can justify the steady increase in share price with increasing P/E and decreasing rates.





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Interest Rate Effects on Equities: Valuation Impacts







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