Posts In: Premium Articles-01

Geoff Gannon February 11, 2018

Babcock & Wilcox Enterprises (BW): A Risky Stock Getting Activist Attention

I’m trying something different this week. In an effort to share more ideas with members, I’ve decided I’ll write about whatever stock I’m looking at – even if I don’t like what I see. This will give you some insight into my stock selection process at the earliest stages. It will also let me give you more regular, stock-specific content. The downside, of course, is that it’s risky. I’m risking getting you interested in a stock you shouldn’t be interested in. So, I’ll rate the...

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Geoff Gannon February 1, 2018

NIC (EGOV): Loses Its Biggest Customer (Texas) – Stock Drops 20% Instantly

As I write this, NIC (EGOV) stock is down 20% for the day. For potential buyers of the stock, there have been two developments in the last 24 hours. One, EGOV announced it lost the Texas dot org portal. It is still in the running for payment processing on behalf of the state. Texas, as a whole, accounted for 20% of EGOV’s revenue. It may have accounted for even more than 20% of the company’s profits. Two, shares of EGOV are now down 20% in...

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Geoff Gannon January 21, 2018

Carrols Restaurant Group (TAST): America’s Biggest Burger King Franchisee Comes with “Rights of First Refusal”

Guest write-up by Vetle Forsland   Overview   Carrols Restaurant Group (TAST) is the largest Burger King franchisee in the US. They are currently operating 753 Burger King restaurants on the east coast of North America, in 16 different states. That accounts for about 10.2 % of all Burger King locations in the USA.   Carrols was founded in 1960. At the time, they were operating an independent burger chain. In 1976, they started converting those stores to Burger King locations, and they became a...

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Geoff Gannon January 15, 2018

Dunkin’ Brands (DNKN): A 100% Franchised Business Built on a “Morning Ritual”

Guest Write-up by Jayden Preston   Overview Dunkin’ Brands owns two well-known quick service restaurant (QSR) brands, i.e. Dunkin’ Donuts that sell coffee and baked goods, and Baskin Robbins, selling hard serve ice cream. Dunkin’ Brands is now purely a brand owner, as they currently employ a 100% franchised business model, with over 20,000 points of distribution in more than 60 countries worldwide.   They organize their business into four segments: Dunkin’ Donuts U.S. (DDUS), Dunkin’ Donuts International (DDI), Baskin-Robbins International (BRI) and Baskin-Robbins U.S....

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Geoff Gannon January 15, 2018

NIC (EGOV): A Far Above Average Business at an Utterly Average Price

NIC (EGOV) is a company that’s – as the ticker suggests – focused on eGovernment. In particular, NIC is focused on providing internet based interactions with state governments in the United States. This is not a truly huge market. EGOV is by far the market leader and yet it only has $331 million in revenue, $78 million in pre-tax profit, and $59 million in after-tax free cash flow. The company is valued at $1 billion (the market cap is greater, but the company has net...

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Geoff Gannon December 24, 2017

Cars.com (CARS): A Cheap Enough Stock with a Clear Catalyst and Tons of Rivals

About a week ago, Starboard Value disclosed a 9.9% position in Cars.com (CARS). Starboard Value is an activist hedge fund. It is probably best known for its 294-page presentation on Darden Restaurants (DRI) back in 2014. You can read that presentation here (PDF). Cars.com is a 2017 spin-off from Tegna (TGNA). Tegna is the rump of the old Gannett. It consists mostly of local TV stations. The public company now called Gannett (GCI) was spun-off from Tegna (then known as Gannett) in 2016. It consists...

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Geoff Gannon December 8, 2017

The Cheesecake Factory (CAKE): A Second Opinion

Guest write-up by Vetle Forsland             Introduction   The Cheesecake Factory operates 208 restaurants primarily in the US. Of these locations, 194 of them are The Cheesecake Factory-restaurants, 13 are under the Grand Lux Café-brand, and one under the RockSugar Southeast Asian Kitchen mark. Additionally, they have 15 Cheesecake-branded restaurants in other parts of the world. These are all upscale casual dining restaurants. The customer eats freshly prepared food in the restaurant while a waiter provides table service. On average,...

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Geoff Gannon December 6, 2017

The Cheesecake Factory (CAKE)

 Guest write-up by Jayden Preston   Fellow Focused Compounding member Kevin Wilde has written two posts on The Cheesecake Factory (over at the “Idea Exchange”). I suggest you read his posts first to get a better glimpse at the company’s financials. This article is intended to be a more qualitative one.     Overview   Originated in 1972, the predecessor of The Cheesecake Factory was a bakery operation founded by the parents of Chairman David Overton in Los Angeles. In 1978, David Overton led the...

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Geoff Gannon November 29, 2017

Zooplus

Zooplus Guest write-up by Vetle Forsland   Introduction   Zooplus is the leading online pet food retailer in Europe. It has on average grown sales 38% annually since 2006 (IPO in 2008) and annualized sales growth since 2010 is a 31%. In 2016 sales grew by 28%, to 908 million EUR, and there is room for additional expansion. Generally, the retailer with lowest prices and best customer service will come out as the industry leader. I believe this will be Zooplus. Lower prices and good...

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Andrew Kuhn November 27, 2017

Quick Summary of 2 Businesses I’ve Studied Recently

  CARS- Cars.com recently completed the spinoff from their parent company Tegna Inc, and started trading as its own publicly traded company on June 1st. Geoff and I did some research on the company a little over a month ago and we have been watching from the sidelines ever since. Cars.com is a very capital-light, cash flow generative company with a solid brand and one I would say is not going to “go-away” within the next 10 years. This all being said, they operate and...

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