Munger Mode rating: 4 out of 5 — Buy. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
We have spent our lives looking for businesses where the customer keeps coming back out of habit, necessity, or lock-in, and where demographics do the heavy lifting that management otherwise would have to do. Alcon is such a business. It is the world's largest pure-play eye care company: the number-one franchise in cataract surgery — the most commonly performed surgical procedure on earth — and the number-two franchise in contact lenses, wrapped around an aging global population that grows more presbyopic, more myopic, and more cataract-ridden every year, entirely regardless of what the Federal Reserve does. It is not a perfect business. Reported returns on capital are muddied by an enormous carve-out balance sheet, capital allocation has had two visible stumbles in the past twelve months, and the contact lens side faces genuinely capable competitors.
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