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  • March 2019 (Revised May 2019)
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Growth Investing at Totem Point

By: Suraj Srinivasan, Charles C.Y. Wang and Jonah Goldberg
  • Format:Print
  • | Language:English
  • | Pages:21
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Abstract

The case describes the investment of hedge fund, Totem Point Management in Analog Semiconductors (ADI) as a way to discuss forecasting and valuation in growth companies. In June 2016, hedge fund Totem Point invested in ADI at around $55 a share. In general, Totem Point aimed for their investments to yield 50% returns over a two-year time horizon. It was now 2018, and Totem Point was evaluating whether to maintain its position in ADI, expand it, or close it and walk away with its (substantial) winnings from the investment. Though the stock had done well in the prior two years, it had recently seen numerous downgrades by sell-side analysts, as its price slid 15% from a historic high. The question facing Totem Point, was whether it would grow by a further 50% over the next two years. To answer this question, Totem Point considered growth trends in each of ADI’s main end-markets: industrial applications, consumer applications, automotive applications, and telecommunications applications. If these end-markets expanded over the coming two years, ADI would do very well, but if they failed to expand, the stock would stagnate. Totem Point’s task was to figure out which scenario was most likely and what that scenario would mean for the stock’s price.

Keywords

Growth Investing; Investment; Strategy; Forecasting and Prediction; Valuation

Citation

Srinivasan, Suraj, Charles C.Y. Wang, and Jonah Goldberg. "Growth Investing at Totem Point." Harvard Business School Case 119-091, March 2019. (Revised May 2019.)
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About The Authors

Suraj Srinivasan

Accounting and Management
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Charles C.Y. Wang

Accounting and Management
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Related Work

    • March 2019 (Revised May 2019)
    • Faculty Research

    Growth Investing at Totem Point

    By: Suraj Srinivasan, Charles C.Y. Wang and Jonah Goldberg
    • June 2021
    • Faculty Research

    Growth Investing at Totem Point

    By: Suraj Srinivasan and Charles C.Y. Wang
Related Work
  • Growth Investing at Totem Point By: Suraj Srinivasan, Charles C.Y. Wang and Jonah Goldberg
  • Growth Investing at Totem Point By: Suraj Srinivasan and Charles C.Y. Wang
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