--- name: stock-industry-review description: Review a US-listed company's industry position and competitive moat for an equity-research workup. Covers Porter Five Forces scan, market-share trend (absolute and relative to industry growth), TAM size and trajectory, unit economics where disclosed (LTV/CAC, unit gross margin), moat classification (network / brand / scale-cost / switching-cost / patent / regulatory / proprietary-data), substitute threats, new-entrant threats, pricing-power evidence, supplier/channel concentration risk, and regulatory exposure. Trigger when analyzing competitive position at L6 of the seven-layer X-ray framework. Dispatched by stock-analysis-lead; at Lite depth runs in Lite-Industry mode (moat type + share trend only, no full Porter scan). allowed-tools: Read, Grep, Glob, WebSearch, WebFetch, Bash --- # Stock Industry Review ## Purpose Read 10-K "Competition" sections, MD&A market commentary, and external industry-size data with the eye of a strategy analyst. The financial statements tell you what the company *did*; this skill tells you what the industry will *let it keep doing*. Surface moat type and durability, market-share trajectory relative to industry, pricing power evidence, and structural threats. Output Findings that the orchestrator uses to model Bull/Base/Bear scenarios — moat strength caps the multiple expansion, and competitive pressure determines margin sustainability. ## When To Use - Orchestrator dispatches industry review (always-on at all depths; Lite runs the lighter moat-type + share-trend pass only — no full Porter scan). - User asks "what's the moat", "is losing share", "who are the competitors", "what's the TAM". ## When NOT To Use - Business model classification → `stock-business-review` - Margin trends → `stock-earnings-quality-review` - Management quality → `stock-management-review` ## Mandatory Gates ### 1) Execution Integrity Gate Read 10-K Item 1 "Competition" section AND at least one external source (analyst report, industry association, or comparable peer's 10-K) for triangulation. The company's own description of competition is self-serving. ### 2) Quantification Gate "Strong competitive position" is not a Finding. Quantify: market share %, share trend, TAM $, growth rate. If you cannot quantify, suppress. ### 3) Moat-Type Gate Generic "competitive advantages" is not a moat. Classify into one of seven types: network effects, brand, scale-cost advantage, switching cost, patent/IP, regulatory, proprietary data. If you cannot fit it into a named type, flag "no identifiable moat". ### 4) Cyclicality Gate Pricing-power evidence in a bull market is not pricing power. Look for margin stability across a downturn (2020 or 2022 depending on sector). ## Workflow 1. Read 10-K "Competition" subsection + Risk Factors related to competition. 2. Pull at least one peer 10-K for triangulation (peer list from manifest). 3. Estimate market-share trend using revenue YoY vs industry growth (from external source). 4. Classify moat into named type(s); test moat durability. 5. Emit Findings. ## Filing-Pattern-Gated Execution Protocol ### Execution Order 1. Locate the 10-K Competition section, Risk Factors, segment-level revenue, and peer 10-K for context. 2. For each checklist item, locate evidence. 3. **HIT** → quantify + classify. 4. **MISS** → mark NOT FOUND. 5. Report only Findings with named, quantified evidence. 6. Include `Filing pre-scan: X/Y items hit, Z confirmed`. ## Industry Checklist (10 Items) | ID | Item | Source | Trigger | |---|---|---|---| | IND-01 | Porter Five Forces quick scan | 10-K Competition + Risk Factors | Flag if any one force is "high" without compensating moat | | IND-02 | Market-share trend (relative growth) | Company revenue YoY vs industry growth | Flag if company growth < industry growth (losing share) | | IND-03 | TAM size + 5-year growth trajectory | Investor presentation / industry research | Flag if TAM growth < 5% (mature market — multiple compression risk) | | IND-04 | Unit economics (LTV/CAC, unit GM) | Investor presentations + 10-K segment | Flag if LTV/CAC < 3 in subscription business | | IND-05 | Moat classification (named type) | Multi-source synthesis | Flag "no clear moat" if no named type applies | | IND-06 | Substitute threat (named adjacent products) | 10-K Risk Factors + external scan | Flag if substitute growing > 20% annually | | IND-07 | New-entrant threat (capital + regulatory barriers) | 10-K Risk Factors | Flag if barriers low AND TAM attractive | | IND-08 | Pricing-power evidence (cross-cycle margin stability) | 5-year gross margin through last downturn | Flag if gross margin compressed > 5pp in last downturn | | IND-09 | Supplier/channel concentration risk | 10-K Risk Factors | Flag if > 30% of supply from single vendor (e.g., TSMC dependency) | | IND-10 | Regulatory exposure (sector-specific) | 10-K Item 1 "Regulation" + Risk Factors | Flag if pending regulation could compress margin or restrict TAM | ### Severity Rubric - **High**: Threatens the long-term thesis. E.g., losing share for 3 consecutive years; no identifiable moat in a competitive market; key regulatory action pending. - **Medium**: Caps Bull-scenario probability. E.g., moat is real but narrow (switching cost ~6 months only); supplier concentration material but second-sourcing in progress. - **Low**: Context for valuation. E.g., TAM growing 8% (not great, not terrible); regulatory exposure passive. ## Evidence Rules - Market share must cite a number AND the source (whose definition of the market?). - Moat classification must name the type explicitly; don't write "they have a strong moat". - TAM citations must include the source (research firm + year) since TAM estimates vary widely. - Pricing power must reference a specific downturn period. ## Output Format ### Findings #### [High|Medium|Low] Short Title - **ID**: `IND-NN` - **Citation**: 10-K section + peer or external source - **Evidence**: quantified data + named moat type - **Implication**: what this means for the multiple / margin sustainability ### Suppressed Items ### Execution Status ``` Filings reviewed: 10-K (FY2024) Item 1 + Item 1A, peer 10-K () External sources: Filing pre-scan: 10/10 items hit, 4 confirmed as findings ``` ### Venture Priors (option-dominated names only — when the orchestrator's dispatch says Optionality Overlay) When the company is option-dominated (Tesla, pre-profit narrative names), the orchestrator values the unproven engines with a sum-of-the-parts whose `option` legs need priors you are best placed to supply. For **each** value-driving venture (e.g. robotaxi, humanoid robots, an AI/software stream), emit a structured prior — and express every uncertain field as a **range with a source tag**, never a point (a point would be false precision the orchestrator's SOTP engine rejects): ``` Venture: - TAM at maturity: $–$B () — source: [estimate] - Company addressable share: –% — basis: [estimate] - Take-rate / revenue capture: –% [assumption — state the network/pricing logic] - Plausible steady-state operating margin: <%> — analog: [assumption] - Independent of the company's other ventures? ← feeds the venture probability tree ``` Do NOT assign `P(success)` or a dollar value — that is the orchestrator's synthesis. Your job is the falsifiable, sourced, ranged inputs. If you cannot source even a range for a field, say so; a missing prior is better than a fabricated one. ### Summary One line: `N High / M Medium / K Low — most material: `. ## No-Finding Case ``` No industry-position findings — moat real and named, gaining share, pricing power demonstrated through last cycle. Notable positives: Network-effect moat; share grew from 24% to 31% in 5 years. ``` ## Load References Selectively - `references/moat-typology.md` — load when classifying moat type or stress-testing moat durability; contains the 7-type taxonomy with named exemplars (Visa network, Costco scale, SAP switching, etc.), and the cyclicality test for pricing power. ## Review Discipline Industry analysis is where retail investors most often hand-wave ("they have AI, they'll win"). Discipline: name the moat type. Quantify the share trend. Cite the TAM source. If you can't, suppress — orchestrator handles a missing IND finding better than a hand-wavy one.