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  "docSlug": "1c836eeb374c",
  "documentTitle": "Monolithic Power Systems (MPWR)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-10-09 00:00:00",
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  "notes": "The slide uses a table to highlight a specific inflection point in raw material inventory metrics.",
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      "kind": "callout",
      "text": "“We purchase inventory in advance based on expected demand for our products, and if demand is not as expected, we may have insufficient or excess inventory, which could adversely impact our financial position.” “Our manufacturing lead times are generally 8 to 16 weeks and we often build inventory in advance of customer orders based on our forecast of future customer orders”",
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      "kind": "callout",
      "text": "We find that raw materials to total inventory peaked in Q4 2018. Raw material growth is slowing, and turned negative in Q2 2019.",
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      "text": "Raw material growth: -2.0%",
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      "text": "We believe MPWR's inventory accounts are signaling a sharp slow down in demand. Per MPWR's disclosures, it builds inventory in advance of expected demand for its products. As a result, raw material inventory growth should be a leading indicator for future performance. We find that raw materials to total inventory peaked in Q4 2018. Raw material growth is slowing, and turned negative in Q2 2019.",
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      "text": "We purchase inventory in advance based on expected demand for our products, and if demand is not as expected, we may have insufficient or excess inventory, which could adversely impact our financial position. Our manufacturing lead times are generally 8 to 16 weeks and we often build inventory in advance of customer orders based on our forecast of future customer orders — MPWR Annual Report",
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      "text": "Source: MPWR's SEC filings",
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      "text": "Inventory data table showing Raw materials, WIP, Finished Goods, Total Inventory, and Raw Material Analysis metrics from 2014 to Q2 2019.",
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      "kind": "title",
      "text": "Evidence of Weakening Growth Signaled Through Inventory Accounts",
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