Investment Idea: Knowles Corporation (KN)
Knowles Corporation (KN): Investment Idea
Date: October 26, 2023 Analyst: Bard AI Industry: Communication Equipment Price: $22.39 Market Cap: $1.9B
1. Executive Summary
Knowles Corporation presents an attractive investment opportunity driven by its diversified exposure to growing markets like True Wireless Stereo (TWS), hearing health, electric vehicles, and medtech. The company's differentiated technology in micro-acoustic microphones, balanced armature speakers, and high-performance capacitors positions it well to capitalize on increasing demand for miniaturized and high-performance components.
2. Investment Thesis (Bull Case)
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Diversified Growth Catalysts: Knowles benefits from multiple secular growth trends. The increasing adoption of TWS earbuds fuels demand for its microphones and speakers. The aging global population and advancements in hearing aid technology drive growth in the hearing health market, where Knowles is a key supplier. Expansion of electric vehicle charging infrastructure increases demand for high-performance capacitors, especially within the Precision Devices (PD) segment. Medical device advancements, specifically in implantable devices, offer another avenue for capacitor growth.
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Technology Leadership: Knowles' focus on miniaturization and high performance creates a competitive advantage. The company's balanced armature speakers offer superior audio quality compared to traditional dynamic drivers, making them attractive for premium audio applications. Its micro-acoustic microphones provide high sensitivity and low power consumption, critical for portable devices. The PD segment's high-performance capacitors are essential in applications requiring high reliability and efficiency.
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Increasing Content per Device: Knowles' ability to increase the number of components it supplies per device (e.g., more microphones per TWS earbud or more capacitors in an EV charging station) is a key growth driver. The demand for improved audio quality and enhanced functionality creates opportunities for Knowles to expand its footprint within existing applications.