Misfit Alpha

Misfit Alpha

Share this post

Misfit Alpha
Misfit Alpha
The Misfits: SEI Investments Company (SEIC)
Copy link
Facebook
Email
Notes
More

The Misfits: SEI Investments Company (SEIC)

A lesson in finding the balance between returns and growth and the pitfalls of high insider ownership.

Misfit Alpha's avatar
Misfit Alpha
Sep 28, 2024
∙ Paid
3

Share this post

Misfit Alpha
Misfit Alpha
The Misfits: SEI Investments Company (SEIC)
Copy link
Facebook
Email
Notes
More
1
Share
The Banker’s Table, William Hartnet, 1877, oil on canvas (Metropolitan Museum of Art)

A reader (thanks, Muzamel!) followed up on my inaugural mailbag. He asked about the limits and downsides to incentivizing management on a per-share and rates of returns, past management teams on the board and their “independence”, returns on incremental invested capital, and several other topics. I won’t be able to get to all of them, I have a great company through which we can examine these questions.

SEI Investments Company (NASDAQ: SEIC).

Since going public in 1981, SEI has delivered a 35,000% return, putting it in the upper echelon of returns over the past 40 years. The company has many of the qualities investors would want to see: a sticky relationship with its clients, a decent margin profile, a solid balance sheet, rates of return well above its cost of capital, high insider ownership from founders and early employees, and a seemingly reasonable valuation. It checks so many “quality stocks” boxes that I’m surprised this company isn’t frequently discussed at value investing conferences.

That said, the company’s results over the past 5, 10, and 20 years probably has some investors wanting more.

chart

SEI’s story touches on many of Muzamel’s questions and presents an additional question. Can SEI get back to its market-beating ways?

Let’s dig in…


Shoutout to Koyfin for their data and charts. Koyfin has become an integral part of how I screen for, track, and analyze companies. Thanks to having a decade of data at my fingertips instead of manually going through stacks of quarterly and annual filings, the analysis process has become more thorough and much faster.

Up your analysis process by Signing up for Koyfin. Click on the link below and receive 10% off your annual subscription.

Claim my 10% off Koyfin now!

Disclaimer: I have an affiliate partnership with Koyfin and receive compensation if you sign up via the link above. It helps me fund this endeavor. I would still recommend using it even if I didn’t have this partnership because it’s an awesome product, but I’d be stupid to turn down a revenue opportunity. You get a discount, Koyfin gets new business, and I get a commission. Win-win-win).

Keep reading with a 7-day free trial

Subscribe to Misfit Alpha to keep reading this post and get 7 days of free access to the full post archives.

Already a paid subscriber? Sign in
© 2025 Misfit Alpha
Privacy ∙ Terms ∙ Collection notice
Start writingGet the app
Substack is the home for great culture

Share

Copy link
Facebook
Email
Notes
More