Posts In: Idea Exchange

Kevin Wilde November 14, 2017 Idea Exchange

Auto Dealership Groups

Thesis Auto dealership groups with scale are attractive businesses with good profitability and attractive growth opportunities driven by industry consolidation. Dealership franchises are protected from competition by regional exclusivity. They earn high margins on vehicle parts & servicing by acting as the warranty arms and parts distributors for their major automaker partners. Despite similar economics and growth opportunities, U.K. auto dealerships look cheap relative to their global counterparts. Vertu Motors plc (LSE:VTU) looks particularly cheap despite less debt / risk, better past growth, improving margins...

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Geoff Gannon October 18, 2017 Idea Exchange

NACCO (NC): The Stock Geoff Put 50% of His Portfolio Into

On October 2nd, Hamilton Beach Brands (HBB) was spun-off from NACCO Industries (NC). That morning I put about 50% of my portfolio into NACCO at an average cost per share of $32.50. Since that purchase was announced, several members of Focused Compounding have sent in emails asking for a write-up that explains why I made this purchase. Unfortunately, there just isn’t much to say about my NACCO purchase. So, this write-up will be both brief and boring. I bought NACCO, because the stock’s price after...

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Kevin Wilde September 27, 2017 Idea Exchange

Hamilton Beach Brands (NYSE:HBB) – Quick Valuation

I took a quick look at Hamilton Beach Brands after reading about it in some of Geoff’s articles.  In the 10-K, the company segments profits by NACoal, KC, NACCO & Other, and HBB.  So, I’m talking about HBB here and I’m just crunching numbers without doing any sort of qualitative analysis. 5Y median Return on Tangible Capital ~23%. HBB Revenue ~$600MM. 5Y median revenue growth 3.8%, so estimate 3-4% moving forward. 5Y median operating margin ~7%. Normalized operating profit ~$42MM. 5Y median CFFO / operating...

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Kevin Wilde September 18, 2017 Idea Exchange

Cheesecake Factory (NAS:CAKE) Comparative Analysis

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Kevin Wilde September 14, 2017 Idea Exchange

Cheesecake Factory (NAS:CAKE)

The Cheesecake Factory (NAS: CAKE) 14-SEP-2017 (EV $1.82B; Mkt Cap $1.88B; 49.0MM shares outstanding; $40.29/share) STATUS At end of 2016, CAKE had a total of 208 company-owned restaurants (all U.S. based): 194 Cheesecake Factory restaurants 13 Grand Lux 1 Rock Sugar Pan Asian NOTE: Each restaurant has sales of ~ $10.5 annually. Maintenance CapEx over the last 3 years has been between $26MM and $29MM per year.  Bakery & Training center capex has averaged $11MM annually over the last 3 years. 2016 sales of $2.276B....

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Jayden Preston August 7, 2017 Idea Exchange

RLI Corp (NYSE:RLI) – Just Wait for the Price

Introduction   Founded in 1965, RLI Corp. is a specialty insurance company with a niche focus. Initially, the company was called Replacement Lens Inc.*, as the company started out as an insurer for contact lens. They were once the largest insurer of this product in the world. In 1976, RLI expanded beyond contact lens insurance into property and casualty insurance.   Fast forward to the present, they now offer insurance coverages in both the specialty admitted and excess and surplus markets. Through 3 subsidiaries, they...

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Sebastian Schrick July 16, 2017 Idea Exchange

Merkur Bank (XETR: MBK)

Merkur Bank (MBK) is a small regional bank located in Munich, Germany. In 1986, MBK was acquired by a group of private investors led by Mr. Siegfried Lingel. At this time MBK had total assets of €14 million and 7 employees. Mr. Lingel refocused the bank’s business on financing residential real estate developers in Leipzig, Berlin and, to a lesser extent, Munich. In 1995, the bank extended its business to the financing of leasing companies and SMEs. In 1999, MBK went public on the Munich...

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Jayden Preston July 2, 2017 Idea Exchange

Kroger (NYSE:KR): A Little Too Hard

On 16 June 2017, Amazon announced a $13.7 billion acquisition of Whole Foods. The announcement then engendered meaningful declines in stock prices of major grocers/supermarkets, not just in the US but also in Europe. Kroger, in particular, dropped as much as 17% that day. This brings its YTD performance to -31% as of 29th June 2017. Below, we take a brief look at Kroger to see if it is now the right time to consider an investment in it.   Introduction Founded in 1883, Kroger...

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Mister Compounder June 26, 2017 Idea Exchange

Protector Forsikring (OSLO: PRTOCT)

  Ticker:                  PROTCT Country:              Norway Stock price:        71,75 NOK   Summary of the thesis: A fast-growing Norwegian insurer with higher than industry growth in premiums. Historically it has grown premiums at 20 %, achieving 92 in combined ratio and an investment return on the float of 5,5 %. A low-cost focused business model with industry leading expense ratios. Protector is trading at approximately 12x normal earnings, which is in line with what the Norwegian market has been priced at historically. This is...

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Kevin Wilde June 20, 2017 Idea Exchange

Under Armour (NYSE:UA)

UPDATED: 20-JUN-2017 Athletic apparel manufacturers typically develop, market, and distribute their own branded apparel, footwear, and accessories for men, women, and youth.  Products are usually sold worldwide and worn by athletes, as well as by consumers of active lifestyles.  Products are most often marketed at multiple price levels with revenue generated from a combination of wholesale sales to independent and specialty retailers, as well as through direct consumer sales channels that include a company’s own stores and its ecommerce sites. The key players in the...

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