Teledyne: The picks and shovels play for the future of everything?
Has anyone looked into this company, I'm starting a deep dive on them because amost every time I read some think tank or trade journal report projecting where the world is going and what we will need, Teledyne is involved.
Some key examples
HVDC cables:
Europe identified defense of deep sea cables as its number one security threat. Deep sea HVDC cables installation is also going to grow at a huge cagr. The ocean is too big to realistically patrol with manned vehicles, so autonomous vehicles seem like a likely part of the solution. Teledyne makes both AUVs and sells components for them. Sensing components for smart cables could also be key. The market for AUVs is projected to grow at a 10-20% cagr, but I would bet it's going to be more like 15-30%.
Physical AI:
Supposed to grow at a very high cagr as well. Humanoid robots at scale are a bit of a pipe dream for the next 5 years, but robotic automation in warehouses is already here. These machines need to see where they are going and what they are doing, Teledyne is a leader in optical sensing.
Data centers and optical switching:
Teledyne makes micromirrors for optical switching systems.
Drones:
They also need to see where they are going, Teledyne supplies vision for drones as well as make the only reliable nano drone outside of China.
Anti drones:
My bet for the fastest growing anti drone technology is going to be electronic warfare. Kinetic solutions are expensive, and likely less effective against swarms. Regular old jamming likely won't be effective against autonomous drones. RTX's new coyote system though can take out multiple drones in a single shot, regardless of if they are resistant to normal jamming, and the payload it uses to do so is reusable.
Space/golden dome: Teledyne sensors will be vital and they are already winning the contracts from primes.
Their recent growth has been somewhat modest, but their CEO has shown a consistent pattern of identifying trends before they blow up, and positioning the company to meet that need.
The bear case is that some of what they do will be commoditized by China. If you need a sensor to only be 75% as good as what Teledyne provides, and you want it on the cheap, you may take your business to China. But, Teledyne enjoys a regulatory moat over China when it comes to defense systems for the U.S. and NATO.
My confidence in all of this is not high though. I'm a complete layperson when it comes to technology and this is not a high conviction pick of mine. Their growth lately has also been modest, not explosive, but I see them as well positioned for the future.