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.
Charlie and I have always said we'd rather own a wonderful business at a fair price than a fair business at a wonderful price. Ferguson is that first kind of animal — a genuinely wonderful business, though of a breed that's easy to underestimate. It doesn't make anything. It's a middleman. And most middlemen deserve to be squeezed out of existence. But a handful of distributors — the ones that get so large, so dense, and so embedded in their customers' daily work that scale becomes a compounding advantage — turn into toll roads on essential economic activity. Ferguson is the largest distributor of plumbing, waterworks, and HVAC products in North America, roughly twice the size of its nearest competitor in its core trade, earning better than 30% on equity, in a $340 billion market where it holds only about a 9% share.
Recent filings analysed: 10-Q (2025-12-09), 10-K (2025-09-26), 10-Q (2025-06-03), 10-Q (2025-03-11).
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