Posts In: Premium Articles-01

Geoff Gannon October 10, 2018 Premium Articles-01

How Much is Too Much to Pay for a Great Business?

A Focused Compounding member sent me this email:   “I’ve just become a FC member and I’ve been listening to the very interesting podcasts from day one. Really enjoying them. Those have convinced me to purchase a membership of 1 year (for now).   I have a question that has been spinning my head for a while now.   Everybody is looking for this gem of a company with a sustainable competitive advantage and consequently… a high sustainable ROIC or ROIIC.   But when you...

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Geoff Gannon October 5, 2018 Premium Articles-01

How Big Can Amazon Get?

(Note to Focused Compounding Members: Geoff here. This is one of my general investing posts – not a specific stock write-up. The first half of this post was made available free for everyone at “Gannon On Investing”. The second half of this article is exclusive for members like you. My actual stock write-ups are always exclusive to Focused Compounding. The first half of my general investing articles are available free at “Gannon On Investing”; you get the whole article here because you’re a member.) Someone...

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Geoff Gannon October 3, 2018 Premium Articles-01, Stock Ideas

Resideo: Honeywell’s Boring, No-Growth Spin-off Might Manage to Actually Grow EPS for 3-5 Years

Yesterday, Honeywell set the distribution date for the spin-off of its home comfort and security business “Resideo”. So, I thought now would be a good time to do an “initial interest post” on Resideo. In this article, I’ll give my first impressions of the stock and then I’ll conclude by giving you an idea of how interested I am in following up with this stock idea. As always, I’ll grade the idea on a scale ranging from of 0% interest to 100% interest. To give...

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Geoff Gannon October 3, 2018 Premium Articles-01, Stock Ideas

Homasote (HMTC): A Perfect “Cocaine Brain” Candidate

Member Write-up By Luke Elliott Quote: $10.58      Shares Outstanding: 360,219     Market Cap: $3.81M USD Before getting started, read Geoff’s latest memo “Cocaine Brain,” if you haven’t already. https://focusedcompounding.com/wp-content/uploads/2017/06/2018_09_23_Sunday_Morning_Memo_Cocaine_Brain.pdf Homasote is a well-known brand name associated with the product generically known as cellulose-based fiber wall board. The material is 98% recycled paper fiber and 2% environmentally-friendly materials. The company has two divisions and claims to be America’s oldest green building products manufacturer. The millboard division makes sound insulation and concrete joint filler and their...

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Geoff Gannon September 22, 2018 Premium Articles-01, Stock Ideas

Geoff’s SEC Filing Notes for: Resideo (a Planned Honeywell Spin-off)

Notes on Honeywell’s planned spin-off of Resideo Technologies I’m trying something new here. A lot of you want to see more “initial interest” write-ups from me. But, those write-ups are actually step two of my investment process. I first read a 10-K (or, in this case, a spin-off document) on EGDAR and mark-up that SEC filing. I make my notes directly on the 10-K through a combination of highlights and questions, comments, etc. in the margin and at the bottom of the page. I never...

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Geoff Gannon September 18, 2018 Premium Articles-01, Stock Ideas

Standard Diversified (SDI / SDOIB): Get a Solid Tobacco Brand and a Solid Marijuana Brand at a 33% Discount to Their Market Value

Member Write-up by André Kostolany Geoff’s Note: Standard Diversified also has extremely illiquid super voting shares that trade under the ticker SDOIB. SDOIB shares are sometimes available at a discount to SDI shares (for example: last week, 400 SDOIB shares changed hands at something like 30% less than the then current price of SDI). SDOIB shares have 10 times the votes of SDI shares and can be converted into SDI shares. Buying Turning Point Brands (TPB) directly is usually the most expensive way to get exposure to Turning Point Brands stock, buying SDI is often the...

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Andrew Kuhn August 24, 2018 Premium Articles-01, Stock Ideas

BUKS follow-up: A catalyst could emerge within a month

Member write-up by VETLE FORSLAND I wrote up BUKS on the website earlier this month. After discussions with Geoff, we agreed that a follow-up article was relevant, as there were important parts of the thesis that I left out in the original write-up (which you can read here if you missed it). https://focusedcompounding.com/butler-national-corp-buks-an-illiquid-ben-graham-style-mini-conglomerate-in-aerospace-and-casinos/ This article will focus on a real estate deal that could act as a drastic catalyst for the stock, which is desperately needed. BUKS’ real estate deal, and why it’s a bargain...

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Geoff Gannon August 7, 2018 Premium Articles-01, Stock Ideas

Northfield Precision Instruments Corporation (NFPC) – A Dark, Illiquid Nanocap at an Unlevered P/E of 6

Member write-up by LUKE ELLIOTT Northfield Precision Instruments (OTC: NFPC) Quote: $15.00 Let’s go ahead and get one thing out of the way. When I say nanocap and illiquid, I really mean it. Northfield has a market cap of 3.6 Million USD (234,237 shares x $15/share) and its 10/90 day volumes are 0 and 102 respectively. This is a tiny company and the largest daily volume (by far) of shares trading over the last year was 6,400 (around $95,000 USD). For some of you it...

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Geoff Gannon August 6, 2018 Premium Articles-01, Stock Ideas

Butler National Corp. (BUKS) : An Illiquid Ben Graham Style Mini-Conglomerate in Aerospace and Casinos

Member write-up by VETLE FORSLAND   Butler National Corp (BUKS) is a $14 million OTC stock that operates in the Aerospace Products industry and manages two casinos. The two unrelated businesses split revenues 40/60, respectively. It trades at an EV/EBITDA of 2.30 (while peers trade at around 10 times) and the company has net cash. While all this sounds attractive, it only gets better; a simple sum-of-the-parts calculation shows that the stock is trading at 29% of its intrinsic value.   The stock trades around...

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Geoff Gannon July 26, 2018 Premium Articles-01, Stock Ideas

Kaanapali Land (KANP): A Super Illiquid Speculation on Hawaiian Land

Member write-up by DAVE ROTTMAN   Overview Kaanapali Land LLC (KANP) is a business that owns land on Maui, one of the major Hawaiian Islands. Because Kaanapali is the name of the region of Maui that Kaanapali Land LLC owns land in, this report will refer to the business as KANP. The island of Maui was formed by two volcanos that grew next to and eventually into each other. This is referred to as a volcanic doublet. The western part of the doublet is mostly...

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