Equity Research

Research Reports

Each month, the William Blair & Company Equity Research Department spotlights a new research report. These reports are made available to the public, for a limited time, on our Web site. You can register to receive these reports from the Business News section of the company home page, or from here. Please see below for the reports that are currently available:
 

Research Report Available Online: FTI Consulting, Inc.

July 28, 2008 - William Blair & Company recently initiated research coverage of FTI Consulting, Inc. FTI Consulting provides restructuring, corporate finance consulting, litigation and forensic consulting, economic consulting, strategic and financial communications consulting, and technology consulting services. Below are analyst Timothy McHugh’s report highlights.

Favorable secular trends and international expansion should drive solid growth. Demand for corporate restructuring services is increasing and will likely continue to do so during the next few years. The burgeoning electronic discovery market is also projected to grow quickly during the next few years. Lastly, the level of litigation and regulatory activity continues to grow steadily, particularly as it relates to issues in the credit markets. FTI Consulting is one of the leading service providers in each of these end-markets, so we expect demand for the company’s services to remain strong. We also believe the company has a significant opportunity to expand its services outside the United States during the next few years.

FTI Consulting is led by an experienced and deep management team. Executive Chairman Dennis Shaughnessy and President and Chief Executive Officer Jack Dunn have led the company since 1992 and are supported by a deep management team with significant industry experience. Management has proved adept at driving both organic and acquired growth during the past few years. The company recently raised additional capital through a secondary stock offering, so we believe that FTI Consulting will remain acquisitive.

FTI Consulting is well diversified, but its acquisitive history increases the company’s risk profile. Management has gradually diversified the business and signed its key consultants to long-term retention agreements, but the company’s own history demonstrates the risk of acquisitions.

To read more about FTI Consulting, Inc., register to receive a complimentary copy of the report in its entirety: register for report.

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Research Report Available Online: The Scotts Miracle-Gro Company

May 27, 2008 - William Blair & Company recently initiated research coverage of The Scotts Miracle-Gro Company with an Outperform rating. The Scotts Miracle-Gro Company is the largest manufacturer and marketer of do-it-yourself lawn and garden care products in the world. Below are highlights of analyst Jon Andersen’s Basic Report.

Large Market Underpinned by Favorable Demographics. Lawn and garden care products are a $5 billion market in the United States, with midsingle-digit industry growth expected. Gardening is a top leisure activity, participation is positively correlated with age, and warmer-weather states are experiencing strong population gains.

Clear Category Leader With Growing Share. Scotts owns more than a 50% share in its core North American lawn and garden categories, and its brands are often synonymous with the categories in which they compete. Furthermore, Scotts appears well positioned to further capitalize on recent retrenchment by competitors.

Sustainable Competitive Advantages. Scotts is an industry leader in research and development (long-term target of $200 million in annual sales from new products), brand support (advertising spending is twice the rest of the industry combined), and in-store execution (2,000 merchandisers and in-store counselors interacting with consumers).

Lawn Care Services Should Be a Growth Driver. Scotts has made significant progress—and is now the No. 2 player—in the do-it-for-me segment. Still, with less than a 5% share of the growing and highly fragmented $5 billion domestic lawn care services market, Scotts LawnService has ample room for growth.

Solid Long-Term Growth Outlook. We encourage longer-term investors to take advantage of near-term uncertainties related to 1) the consumer environment, 2) a slow start to the lawn and garden season, and 3) incremental 2008 investment to enhance future growth and profitability.

Risks. Risks include the seasonal, weather-dependent nature of demand and input cost inflation. Sales could be affected by macro conditions; however, we believe the industry should prove resilient given relatively modest price points, low purchase frequency, and gardening’s position as a top leisure activity.

To read more about The Scotts Miracle-Gro Company, register to receive a complimentary copy of the report in its entirety: register for report.

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