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Last Seen Profiles
The Holy Trinity of Microcap Growth?
$KUT.v 7x FCF 64% TTM growth
$DRX.to 4x FCF 40% TTM growth
$IBT.v 3x FCF 33% TTM growth
All attractive niche businesses with exciting growth prospects.
Canadian microcap is such a weird and wonderful pond to fish in.
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In June 2010, William Brunner sold 5.88 million shares of $XPEL at $0.05 for proceeds of ~$294k.
Today those shares would be worth $419 million.
I often think about this.
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Wasatch Advisors continues to aggressively add to their $XPEL position, now over 10% of the shares.
Wasatch is on a very short list of small cap investors that I've felt worth following over the last 20 years.
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Box office receipt to budget returns:
Paranormal Activity 841x
The Blair Witch Project 829x
Night Of The Living Dead 263x
The Texas Chainsaw Massacre 221x
Much like investing, the best ROIs always seem to be in the horror genre.
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With $DRX.to at $17.70, this is now an 11-bagger from $1.60 back in Oct 2021.
It's slightly amusing to remember that ALL of the feedback I received then was how terrible the investment idea was too.
Dance to the beat of your own drum. Most of the chirping on here is noise IMO.
ADF Group $DRX.to is a leading steel fabricator with a focus on complex projects and is one of the most undervalued $50+ million market cap companies IMO. Trades for 2.9x EV/EBITDA, 4x FCF, 52% of tangible book value.
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The Holy Trinity of Microcap Growth v2
$KUT.v 6x FCF 15% TTM growth
$DRX.to 9x FCF 32% TTM growth
$PHA.v 3x FCF 48% TTM growth
All attractive niche businesses with exciting growth prospects. Canadian microcap is such a weird and wonderful pond to fish in.
The Holy Trinity of Microcap Growth?
$KUT.v 7x FCF 64% TTM growth
$DRX.to 4x FCF 40% TTM growth
$IBT.v 3x FCF 33% TTM growth
All attractive niche businesses with exciting growth prospects.
Canadian microcap is such a weird and wonderful pond to fish in.
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In Apr 2009, $CPRT's CEO Willis Johnson and Pres Jayson Adair each agreed to forgo their next 5 yrs of comp in exchange for 2mm options. A bold proposal to say the least.
3 splits later that $10mm in forgone comp is now 16mm shares valued at over $1.3 billion. Not a bad trade!
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Investment case for $KUT.v in short:
15%+ organic growth
Huge acquisition runway to drive 30%+ rev growth
Highly fragmented market
Highly recurring revs, almost no churn
High barrier to entry from local economies of scale
Recession-resistant
No customer concentration
7.3x P/FCF
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The valuation report in Cipher's $CPH.to tender offer circular is interesting to say the least.
Management is projecting op income increasing 3.5x to $46mm CAD by 2027. Current EV is $57mm.
It's not hard to see why they're trying to buyback their shares so aggressively IMO.
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Looks like $XPEL is finally leveraging their purchasing power to strike a new and improved supply agreement. This at least partially explains why management has been so confident in significant gross margin expansion going forward.
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The money quote on the $XPEL Q3 call:
"Still remain confident that we'll be able to increase gross margins out of our historical 34-35% range by the end of Q4. And then we continue to expect gross margins to go higher next year, and to be approaching 40% by mid-year."
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Redishred $KUT.v just released FY24 targets: $9mm in FCF, up from $7mm last yr.
Current market cap is $52mm, bringing the valuation down to 5.8x FCF.
Strong growth outlook too. 6% shred comps in Q1 + atypically large ~6% pricing increase in Q2 should help drive FY25 FCF.
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Box office receipt to budget returns:
Paranormal Activity 841x
The Blair Witch Project 829x
Night Of The Living Dead 263x
The Texas Chainsaw Massacre 221x
Much like investing, the best ROIs always seem to be in the horror genre.
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Six months ago, $CPH.to gave investors an extremely bullish operating income forecast -- an exciting "what", but no detailed explanation for "why."
On the CC today, management just laid out the "why"
The valuation report in Cipher's $CPH.to tender offer circular is interesting to say the least.
Management is projecting op income increasing 3.5x to $46mm CAD by 2027. Current EV is $57mm.
It's not hard to see why they're trying to buyback their shares so aggressively IMO.
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The Joint Corp has been a massive homerun for Bandera Partners:
Bought $9mm of $JYNT (10% of OS) at ~$7 in 2018.
Bought ~30% more, averaging UP ~$10.
Sold for $125mm+ and counting at $75-100 in 2021.
It's really a thing of beauty. Congrats
@jeff_gramm
!
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Investment case for $DRX.to:
FCF growth: ~50% growth in fabrication hour backlog
FCF growth: New $25mm+ automation line
FCF growth: improved capacity utilization
FCF growth: mgmt forecasts further backlog growth
Downside protection at 53% of TBV
45% insider ownership
4x FCF
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Incredible chart from Cipher $CPH.to.
June 2021 market cap was $32mm (usd)
Mar 2023 cash balance is $33mm (usd)
That's what it looks like when you cash flow your entire EV in only 7 quarters -- less than 2 years!
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“If you find a stock with little or no institutional ownership, you’ve found a potential winner. Find a company that no analyst has ever visited… When I talk to a company that tells me the last analyst showed up three years ago, I can hardly contain my enthusiasm.” - Peter Lynch
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The first big winner from the trio emerges.
$IBT.v to be acquired for $1.45 per share, up around 2.6x in less than a year and a half.
The Holy Trinity of Microcap Growth?
$KUT.v 7x FCF 64% TTM growth
$DRX.to 4x FCF 40% TTM growth
$IBT.v 3x FCF 33% TTM growth
All attractive niche businesses with exciting growth prospects.
Canadian microcap is such a weird and wonderful pond to fish in.
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IBEX Technologies $IBT.v delivers another great quarter with 40% revenue growth. TTM EBITDA is now over $2mm, putting the stock at 2.5x EV/EBITDA. Fairly minimal capex and taxes due to significant NOLs. Very cheap valuation for a high quality business IMO.
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In July 2019, $KUT.v insiders bought over 55,000 shares at $4.75.
Since then EBITDA/share has more than doubled from $0.32 to $0.72, leverage levels are lower, and organic growth is stronger than it's been in 10+ years.
Being the TSXV, of course the share price is down.
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$KUT.v should rebrand itself to investors as a SaaS company: Shredding-as-a-Service. Somehow I doubt it would remain at 7x FCF.
The recurring, subscription-like shred service certainly looks a SaaS model -- except it's extremely profitable and has high barriers to entry.
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This is $KUT.v customer value proposition.
I hope whoever created this chart for the Shred-It prospectus was paid handsomely.
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Donville Kent on $KUT.v
A table earlier in the letter notes they expect 16% revenue growth in 2024 and that they place the 2024 P/E at 3.6x.
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Massive Q3 for $DRX.to with 26% rev growth and EBITDA more than doubling to $17.8mm.
TTM EBITDA growth is now 114% and has grown 50%+ for 8 consecutive qtrs.
Mgmt "confident that we will be able to continue to grow our order backlog"
Stock down to 3x FCF now (next 12 mths)
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Three massive $KUT.v qtrs later -- 70% rev growth, 76% EBITDA growth -- and the market is still asleep. In fact the stock is even cheaper now.
Shares now trade at only 6.7x FCF with the company still poised for 35% rev growth and 45-50% EBITDA growth NTM.
The market is sleeping on $KUT.v right now IMO -- stellar quarterly results + a homerun acq have been ignored.
Shares now trade at only 8.9x FCF with the business poised for 35% rev growth and 45-50% EBITDA growth next year. Extremely mispriced for a high quality growth company.
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Horror movies benefit from:
- Limited competition due to a lack of prestige
- Allowing people to experience terror without actual risk of death
- Low expectations
- A communal experience
So do the best investments.
Box office receipt to budget returns:
Paranormal Activity 841x
The Blair Witch Project 829x
Night Of The Living Dead 263x
The Texas Chainsaw Massacre 221x
Much like investing, the best ROIs always seem to be in the horror genre.
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13
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1) Your liquidity discount is my future returns. Many of my biggest winners have benefited from the dramatic multiple expansion that can occur as the illiquid becomes liquid over time, perhaps none more dramatically than $XPEL over the last 10+ years.
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Update time!
In July 2019, $KUT.v insiders bought over 55,000 shares at $4.75.
Since then EBITDA/share increased 2.6x from $0.32 to $0.84, leverage levels are lower, and organic growth is stronger than it's been in 10+ years.
The stock? Down 18%.
In July 2019, $KUT.v insiders bought over 55,000 shares at $4.75.
Since then EBITDA/share has more than doubled from $0.32 to $0.72, leverage levels are lower, and organic growth is stronger than it's been in 10+ years.
Being the TSXV, of course the share price is down.
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The market is sleeping on $KUT.v right now IMO -- stellar quarterly results + a homerun acq have been ignored.
Shares now trade at only 8.9x FCF with the business poised for 35% rev growth and 45-50% EBITDA growth next year. Extremely mispriced for a high quality growth company.
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@_inpractise
$XPEL
Total stock compensation expense since inception is virtually nil (2 bps relative to the market cap!).
Management's respect for shareholders is almost unprecedented IMO.
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ADF Group $DRX.to is a leading steel fabricator with a focus on complex projects and is one of the most undervalued $50+ million market cap companies IMO. Trades for 2.9x EV/EBITDA, 4x FCF, 52% of tangible book value.
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ADF Group $DRX.to results out on Thu.
I find it particularly interesting that the CEO will be co-hosting the CC.
CEO usually has the CFO host all CCs and only joined for the breakout Q1 CC. Hard to imagine he would go out of his way to host the CC for a disappointing qtr IMO.
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It looks like IBEX Technologies finally wants to take advantage of its cheap stock price. $IBT.v announced a share buyback earlier this month. With the stock trading at 2.7x EV/FCF, I expect any share repurchases will be very value accretive.
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ADF Group director Jean Rochette just disclosed a $21k+ insider purchase at a $4.97 avg price.
This is quite notable, as I believe that it's the first instance of insider buying at $DRX.to in over 13 years!
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It sure didn't take long for $DRX.to mgmt to deliver on the promise of backlog growth.
$234mm in new orders should drive backlog to significantly higher levels and sets the stage for a blockbuster FY25 with continued strong growth in revenues and EBITDA.
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@Invesquotes
Copart management walked-the-walk with their own money. There's a lesson in that. That $10mm in foregone compensation is now worth $1.7 billion.
In Apr 2009, $CPRT's CEO Willis Johnson and Pres Jayson Adair each agreed to forgo their next 5 yrs of comp in exchange for 2mm options. A bold proposal to say the least.
3 splits later that $10mm in forgone comp is now 16mm shares valued at over $1.3 billion. Not a bad trade!
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ADF Group $DRX.to published an excellent mgmt interview in Feb 2024.
The section on margins was particularly bullish IMO, with mgmt stating:
"The margin we've been able to produce... we should be able to keep them in the same range, hopefully increase them in coming quarters"
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From $KUT.v AIF. The 4% Proshred slice was only 2% last year.
Proshred continues to cannibalize the independents, which fell from 38% to 35% share.
Redishred is well positioned to continue these market share gains that have been fueling organic growth for a long time IMO.
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The most impressive highlight from $KUT.v Q2 was +19% shred comps, which were on top of +26% a year prior. You can't ask for organic growth any better than this IMO.
Consistently double digits:
Q2 2022 +19%
Q1 +21%
Q4 2021 +15%
Q3 +13%
Q2 +26%
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Redishred ($KUT.v) is a very high quality business trading at an exceptionally low valuation with strong near-term catalysts. It is one of the best risk/rewards in the market today IMO.
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The returns are even nuttier if you look at $IDT as it existed in 2013. $IDT was a big position for me then, and I remember it had a $230mm market cap with $160mm in cash on the balance sheet.
From a $70mm EV to ~$4.5bn in 8 years.
For those looking at Howard Jonas and wondering what the story is behind $IDT, $RFL, $STRP, $ZDGE, $IDWM, and $GNE, here it is.
$400mn to $5bn in 8 years. Unlevered.
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ADF's $DRX.to CEO joined the CC to curb stomp the bear thesis:
"...we see a lot of work for the next 3 to 5 years. okay? A lot of work, a lot of battery plants, a lot of airports, a lot of bridge. So I would say for the next 3 to 5 years, market is going to be very, very good."
ADF Group $DRX.to results out on Thu.
I find it particularly interesting that the CEO will be co-hosting the CC.
CEO usually has the CFO host all CCs and only joined for the breakout Q1 CC. Hard to imagine he would go out of his way to host the CC for a disappointing qtr IMO.
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@OtterMarket
100% agree. Investors also often forget that the liquidity “issue” disappears completely if you are actually right about the company. And if you’re a good investor, the illiquid winners will pay for the losers that are difficult to exit many, many times over.
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I'm not surprised to see Portillo's soar 50%+ on their IPO pop, but IMO this smells like a disaster in the making. $PTLO is a textbook case of why perhaps the SEC should be requiring some degree of cohort disclosures for restaurant companies. I'll explain below. (1/x)
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Stellar Q4 from $KUT.v with 21% shred comps -- the 7th consecutive quarter with 13%+ SSS growth.
With shares at 6.8x FCF there seems to be a large disconnect between the quality of the business and the current valuation IMO.
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ADF Group $DRX.to is continuing the momentum with another exceptional quarter.
21% rev growth, 153% adj EBITDA growth (ex subsidies).
TTM adj EBITDA growth is now 92% and has grown 50%+ for 7 consecutive qtrs.
Stock remains at 4x FCF (next 12 mths)
Another outstanding qtr for $DRX.to with 70%+ growth in adj EBITDA.
TTM adj EBITDA has now grown 50%+ for five consecutive qtrs.
Stock remains at 4x FCF (next 12 mths) and there was not a single question on the call.
Gotta love microcaps!
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In 2019 Redishred was trading at $1.10 with ~$5mm EBITDA.
$KUT.v is now poised for ~$10mm EBITDA this year and ~$15mm EBITDA next year. Share count is relatively unchanged. Current share price? $0.99.
Covid crushed sentiment and the market has been slow to wake up again IMO.
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Almost 10 years later and $AMZN is up 19x.
If Bruce Greenwald ever decides to write a book on his multi-decade $AMZN bear thesis and where it went wrong, I suspect it would have more educational value than his 6+ books on business/investing combined.
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"It is possible to make money — and a great deal of money — in the stock market. But it can't be done overnight or by haphazard buying and selling. The big profits go to the intelligent, careful and patient investor, not to the reckless and overeager speculator." - J. Paul Getty
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What struck me most, however, was the likely difference in valuation:
In 2006 Chipotle was ~$750mm in revs and IPOed at ~$715mm market cap, valuing $CMG @ <1x revs.
Today Sweetgreen is ~$400mm in revs and last raised at $1.8bil, valuing $SG @ 4.5x revs.
Interesting times!
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Sweetgreen $SG now valued at 13x revenues.
Chipotle $CMG went public in 2006 under 1x revenues.
The markets have sure changed a lot in 15 years.
Growth-at-any-price? Apparently.
What struck me most, however, was the likely difference in valuation:
In 2006 Chipotle was ~$750mm in revs and IPOed at ~$715mm market cap, valuing $CMG @ <1x revs.
Today Sweetgreen is ~$400mm in revs and last raised at $1.8bil, valuing $SG @ 4.5x revs.
Interesting times!
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2) $KUT.v is a high quality organic growth business -- that also has attractive acquisition opportunities that can create incremental value for shareholders. The distinction is actually very important.
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Now I take any five year forecast with a grain of salt, but $DRX.to mgmt made it very clear on the call that in addition to a bullish FY25 forecast, the longer-term outlook looks strong to them as well.
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Another outstanding qtr for $DRX.to with 70%+ growth in adj EBITDA.
TTM adj EBITDA has now grown 50%+ for five consecutive qtrs.
Stock remains at 4x FCF (next 12 mths) and there was not a single question on the call.
Gotta love microcaps!
Investment case for $DRX.to:
FCF growth: ~50% growth in fabrication hour backlog
FCF growth: New $25mm+ automation line
FCF growth: improved capacity utilization
FCF growth: mgmt forecasts further backlog growth
Downside protection at 53% of TBV
45% insider ownership
4x FCF
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With $IBT.v being acquired at a 2.6x premium to when this growth trio was declared, we were left with only two constituents. Let's restore the trinity, there's lots of opportunity out there.
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It's a small business, but $XPEL is very smart to build a bigger presence in bicycles. While bikes don't need a lot of PPF, this market helps to increase brand awareness with consumers to hopefully drive the much larger automotive sales.
.
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ADF Group $DRX.to just posted $7.1mm in adj EBITDA, largest quarter in their history I believe.
Stock is still 4x FCF with margins and profitability set to inflect meaningfully upwards starting next quarter now that their automation line is commissioned.
ADF Group $DRX.to is a leading steel fabricator with a focus on complex projects and is one of the most undervalued $50+ million market cap companies IMO. Trades for 2.9x EV/EBITDA, 4x FCF, 52% of tangible book value.
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@mokapucap
Nope. Information security is actually a growth business. That's why $KUT.v organic growth has been so consistently strong for the last 8 years or so.
It's a common misperception though, which has helped to create this highly attractive investment opportunity IMO.
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Company is extremely underfollowed so I don't think investors have noticed the transformation in the business yet -- they did $6.1 M in EBITDA in Q1, largest quarter in their history I believe, and not a single caller on the conference call.
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$KUT.v Resource Recycling is an invaluable publication for tracking sorted office paper (SOP) prices.
Per Redishred: Q4 $66/t -> Q1 $79/t -> Q2 $108/t
And now in September?
"Sorted office paper (PS 37) is up 6%, now trading at $164 per ton."
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3) Every business has some form of commodity exposure. Directly, or indirectly, every business consumes energy, construction materials, resins, etc. In the case of paper for Redishred, those modest revenues actually serve as a hedge against their fuel cost exposure.
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With Sweetgreen targeting a $24 share price in their IPO, make that valuation $2.3 billion pre-money at the mid-point -- or just under 6x revenues.
Yup, the $SG valuation is literally ~6x what $CMG IPOed at despite having a significantly inferior business. How very 2021.
What struck me most, however, was the likely difference in valuation:
In 2006 Chipotle was ~$750mm in revs and IPOed at ~$715mm market cap, valuing $CMG @ <1x revs.
Today Sweetgreen is ~$400mm in revs and last raised at $1.8bil, valuing $SG @ 4.5x revs.
Interesting times!
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@AlphaVulture
@LockStockBarrl
Interestingly, that’s what everyone told me about $XPEL automotive protection films 9 years ago when I mentioned them.
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@Devon_Toogood
The customer base is SMEs -- not large enterprises like $DBX or $SHOP -- that are significantly less likely to shutter offices. There have been strong WFH trends for 2+ years and $KUT.v has been growing organically double-digits in the face of it. Personally, I'm not concerned.
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ADF Group $DRX.to announced $100mm in new contracts, positioning the company well to maintain $200mm+ revenues into FY23 IMO.
They also disclosed the automation line will be inaugurated this May, which should drive higher margins due to labor savings.
ADF Group $DRX.to is a leading steel fabricator with a focus on complex projects and is one of the most undervalued $50+ million market cap companies IMO. Trades for 2.9x EV/EBITDA, 4x FCF, 52% of tangible book value.
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@DakotasTwits
I wouldn’t be concerned. The majority of the minority provision in Canadian securities law gives minority investors the means to prevent potentially abusive takeovers from management.
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You can listen to the whole interview with $DRX.to here.
The CFO also addresses the growing backlog and capital allocation, among other topics.
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Great to see this $XPEL Mercedes sponsorship include window film, and not just be for PPF and ceramic coating.
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Investors focus on ADF Group $DRX.to backlog, but the most important variable is the fabrication mix -- this is the high margin core business.
Buried in the notes, they just disclosed fabrication mix is now 59%, up from ~35-40% over the last few years.
ADF Group $DRX.to just posted $7.1mm in adj EBITDA, largest quarter in their history I believe.
Stock is still 4x FCF with margins and profitability set to inflect meaningfully upwards starting next quarter now that their automation line is commissioned.
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$KUT.v acquisition strategy is a very underappreciated source of value.
Independents column on the right is $1.0+ billion in revs vs Redishred's ~$30mm.
And they buy these businesses for <4x EBITDA vs the 13-15x EBITDA that scaled platforms (Shred-It, Recall) have transacted.
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Redishred $KUT.v acquiring American Security Shredding Corp -- all cash and only 60% of the consideration upfront (with 40% in an earnout payable over 3 years). Valuation is only 1.9x revenues inclusive of the earnout, which definitely appears cheap IMO.
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Yet another exceptional quarter for Redishred. In Q3 $KUT.v did a record $2.9mm EBITDA despite a meaningful incremental investment in headcount. Now trading < 10x FCF with a 20%+ EBITDA growth profile and massive growth runway (both organically and via high ROI acquisitions).
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In July 2019, $KUT.v insiders bought 278,600 shares at $0.95. Since then normalized EBITDA/share has doubled from $0.055 to $0.11, leverage levels are similar, and EBITDA has actually been temporarily depressed by the pandemic. Being the TSXV, of course the share price is down.
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Great to see $XPEL welcome Shadow Shield and Tint back into the fold last week. I wonder how many remember when Xpel was forced to firesale these businesses back in October 2009 for a measly $880k to keep the company alive. My, how times have changed!
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@Investmentideen
Secondly, it's important to note that the vast majority of revenues are not volume-based. Even if paper usage in the average office theoretically declined by 10% or 15%, those offices still need to pay the same fee to have a truck come by and shred/recycle their paper.
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@tack_cap
@specialsit1
@MaldenDriveCap
@Chapter22BK
@dt8_____
@CamberCapital
@walnutavevalue
With $KUT.v now cashed up from the recent capital raise and in a very strong position to continue driving 25%+ growth rates with a massive runway in a recession resistant, high barrier to entry business, I find the current 9.5x FCF valuation extremely compelling.
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This spring 5 different insiders at Caldwell Partners reported stock purchases at ~15-year highs.
6 mths later $CWL.to is up 70%+ to $2.74.
Heavy insider buying at multi-year highs remains the most reliable buy signal. It may not happen often, but pay attention when it does.
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It's fascinating to see how Berkshire Partners executed the private equity playbook perfectly with Portillo's -- and turned what appears to be a frankly disappointing investment in $PTLO into a financial homerun. I'll walk through how this happened in this thread. (1/x)
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@ChapTwelveCap
@zippy_capital
1) Service fees are 78% of revs and industry pricing is increasing significantly due to inflationary pressures. Price increases are 100% margin and drop straight to EBITDA.
2) Fuel costs are 7-8% of revenues.
3) They are baling 50% of tonnage now which gets $50-60/ton premium.
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$DRX.to director Rochette wasn't done -- he just announced another 3200 shares bought over $5.00 per share.
Total insider buying disclosed today is up to $37k+ at an avg price of $4.99 per share.
ADF Group director Jean Rochette just disclosed a $21k+ insider purchase at a $4.97 avg price.
This is quite notable, as I believe that it's the first instance of insider buying at $DRX.to in over 13 years!
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@Pigeonomics
Ellen Burstyn losing Best Actress that year to Julia Roberts in Erin Brockovich was criminal.
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IBEX Technologies $IBT.v just posted Q3 revenue growth of 51%, increasing TTM EBITDA to $2.3mm. With minimal capex and taxes, the valuation is now down to ~2.4x EV/FCF. Extremely cheap for a high quality business with significant growth potential IMO.
IBEX Technologies $IBT.v EBITDA trajectory:
FY22 TTM $2.0mm
FY21 $1.4mm
FY20 $1.3mm
COVID has pushed hospitals to invest in new efficient blood monitoring devices, so IMO the EBITDA increase will prove to be more sustainable than many investors realize.
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@mtscss
Lots of potential reasons: it's a microcap, it's a "boring" business, no pure comps to make it easier for investors to analyze, there are lots of investor misperceptions, etc. As the business grows, however, so does investor awareness. We might be close to a tipping point IMO.
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@Floebertus
Vended is 50% of the total market. Other 50% is unvended -- companies either just throwing paper in the garbage or shredding internally.
Unvended market transitioning to 3rd party vendors like Proshred is another source of potential organic growth for $KUT.v.
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To explain further, the unlevered return on newer $PTLO units appears to be ~10% (EBITDAR/invested capital incl real estate) but borrowing costs are also 10%. If you borrow at 10% and invest at 10% you don't create any value. And ROIC likely falls as low hanging fruit is picked.
A staggering ~10% differential between legacy unit margins and new-ish ones suggests that the ROIC on new restaurants is likely very poor and probably ill-advised. Your honor, I'd like to report a cohort crime! This is a tale of essentially two different businesses IMO. (5/x)
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$KUT.v Sorted office paper (SOP) prices have increased yet again in October — 10th straight month of the climb according to RISI.
Supply of sorted office paper (SOP) might be down, but pricing continues to rise as demand pushes up pricing to levels seen 2.5 years ago.
SOP pricing, and prices for all deinking grades, increased in October, the 10th consecutive month for price rises.
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@dreaming__man
Definitely. Straight Path Communications was spun from $IDT in 2013 and then acquired for over $3 billion by Verizon in 2017.
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@DakotasTwits
@OutsiderRedmoon
“If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.” -- George Soros
Agreed!
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$KUT.v has now further noted that the acquired business also has above average 32-35% EBITDA margins and should therefore add $2mm+ in EBITDA in 2022.
The acquisition should therefore drive not only 15-20% rev growth, but 15-20% EBITDA growth too.
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On the CC $DRX.to mgmt forecasted continued growth in FY24:
"expects its revenues for the fiscal year ending January 31, 2024, to increase"
"corporation is confident it will remain competitive and will generate higher margins given all the operational improvements implemented"
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A staggering ~10% differential between legacy unit margins and new-ish ones suggests that the ROIC on new restaurants is likely very poor and probably ill-advised. Your honor, I'd like to report a cohort crime! This is a tale of essentially two different businesses IMO. (5/x)
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Portillo's $PTLO -- a regional chain serving "Chicago street food" -- is slated to go public tomorrow.
$8mm AUVs and 28% 4-wall margins are obviously staggering, but with 75% of units in Illinois & Indiana, it seems way too early to extrapolate their success out of the Midwest.
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Reading Sweetgreen's S-1, I had flashbacks of Chipotle's IPO in 2006. Many differences between $SG and $CMG, but much similarity in the key elements: company-owned w/ 40%+ cash-on-cash ROIs, history of 10%+ comps with an on-trend concept, and huge potential runway for new units.
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