Coherent Corp. was our most technical site visit yet, but it was nearly my favorite (I don’t think I should put anything above Vina Capital). Coherent manufactures laser technology, lithography machinery components for indispensable companies like ASML, and semiconductor technologies. Basically, Coherent produces equipment that makes powering AI possible. Coherent’s products are also in your phone powering its FaceID. Coherent’s lasers are used to produce advanced products from medical equipment to cars. It’s a whole lot of moving parts and unimaginable precision, but it comes together in a lucrative business model which intrigued me most.

Coherent is expanding massively. They’re based in PA, but they’re also building tons of production facilities in Vietnam as they transition out of China. For much of the laser technologies, they manufacture in the U.S. because they’re implemented in weapons systems. Given their diversification in production locations, it seemed to me like they were very well positioned as the tariffs hit. They’re on top of their game when it comes to pivoting out of China. This should help their margins a lot in the coming years.

When I asked David (Head Engineer of Coherent in VN) when Coherent is expected to switch to profitability (EPS: -0.22), he said that they are quite profitable in reality; the investment in their expansion projects has resulted in lower earnings in the short term. They’re also paying their CEO $101.5M this year, making him the highest paid CEO in the world. His compensation package is 99.4% stock options, but this massive price tag is due to his proven success in the industry. Overall, Coherent looks to be extremely well managed with good growth prospects.

We played soccer against the UEF soccer team after our site visit. It was so hot on the court but it was really fun. I’m pretty sure the boys ended up tying or beating the UEF boys team, but they probably weren’t trying very hard. The girls didn’t have quite our luck but it was still a great time.