Some companies to sink your teeth into

Reading recent posts on this sub is like analyzing companies. Most are a bag of sh\*t*, some interesting, few incredible. So to have some fun I’ll share a list I’ve been pondering the past few days to see if any tickle your fancy. Let me know if any are interesting / if this post is also a steaming pile of sh\*t.* **Copart** \- you crash car, insurance totals cars, they sell through copart. Copart has buyers using site as parts, fix and sell, or junk. Sellers are mainly insurance companies >80%. The moat are the facilities they have across the US and several other countries which collect, store, prepare, and sell the cars. Increasing tech added to cars has been a boon as % of totals has increased - lower rate of accidents however any accident is more expensive to fix = more auction volume for copart / competitors. Largest competitor RB Global, claims about 35% market share vs copart. Main risk to copart is competitor driving prices lower or decrease in number of accidents from autonomous driving. Now listed as 20PE as it’s come off 52 week low. **HG -** Hamilton Insurance group. Small specialty insurer growing strong. The catch or potential upside is about 30% of assets are invested with two sigma which has performed well however likely will keep there valuation depressed given management fees and earnings vol of hedge funds. Also certain risk around what specific risks they hold and what kind of tail risk they are exposed to. Growth has been high but industry is cyclical so risk is certainly there. **TROW** \- asset manager which I assume mostly boomers or very wealthy use to loose a few % a year on fees. There AUM has been declining due to there lack of ETF’s & the push towards lower cost passive investing. The structural risk of there business which is yet to be answered is “why would I pay 1% a year for active management if the S&P returns 10%+ for free”. If they can actually push into ETF’s it may stop the bleeding on AUM. **BIRK -** anecdotally I can’t walk a single block without seeing a pair of these (or there knockoffs). Valuation is a little rich but it’s a clean business which has been growing well. As with any direct consumer facing apparel brand these can turn fast (Nike / LULU) so beware as some of these are quite pricey compared to what I imagine the amazon version costs. This one is a compounder while trend holds but would keep close tabs on it. **VICI -** definitely not your average value investment, and guarantee it will not double in the short term. But it holds a large number of the real estate in Vegas and some other interesting properties focusing on experiences (golf, arcades, ect.). For the decent dividend you are taking the risk that Vegas comes back to life and overall the average consumer continues to consume. **LVMUY -** can’t say I’ll ever be a customer of most of this brands products but for whatever reason people like to dress themselves in expensive clothing and I’m happy to oblige. Valuation for this is also relatively high at around 20PE and you’ll be directly exposed to not a local consumer but broadly across the world. Short term the stock price reflects consumer sentiment but assuming people keep buying luxury (and fakes don’t engulf sales) this has been well run for a very long time. **SAM -** we know the kids no longer drink but the company has zero debt and is at least attempting to pivot away from strictly beer. There Truly pivot has not turned very well but the hope for this is some life to come back into sales and the company to pivot further into the zero alcohol/ alternative beverage lane. Given the drink markets saturation and lack of any moat this is a risky sight for those who think drinking may turn / SAM is the best horse in the race. **ZM** \- the app you use for all your meetings (even when you’re already in the office). Stock has been flying so is no longer free. Given most of there customers are companies the chance of switching may be lower than if it were lots of individuals however growth from core business will not exceed single digits unless they expand. With almost $8b in cash and securities and almost $2b mainly from investment in Anthropic the real problem is management having nothing to do with all the cash. Even as management has just stacked cash the street is now re-rating the valuation. If management can deploy into something with actual growth or just return it through a special dividend owners will be overjoyed. **SFM** \- also no longer at a scintillating valuation however the business continues to grow strongly and expand. Obvious top line risk is the business being a grocery store so is directly exposed to consumer and there continued weakness. However compared to the giants of WMT / COST / TGT revenue, net margins, store growth, ROIC have all grown / remained in line with peers. This certainly may change if consumer weakness continues / recession comes. Given this is a speciality store with over 30% of locations within California, that may have helped shield them so far from the “trade down” towards lower priced foods. However if there core customers stick around and they can continue growing into new states it looks decent. **MMS** \- Maximus exists to perform functions governments either don’t want or can’t easily do. Balance sheet is certainly not the cleanest and results have been weakening due to some reduction in contracts related to DOGE / shifts. However I don’t think the trend of less government appears likely in the next 20 years (assuming we are still around by then). Thus I’ll happily pick this up on a discount and keep a close eye on any new contracts being bid & won and for any new budgets being released by the main orgs contracting to MMS. **LEN** \- homebuilder with a decent balance sheet and coverage across home buyers. Has recently dipped compared to peers. Structurally this is a bet at least in the short term on rates and increasing volume of home sales. However if rates keep chugging higher it may present an even cleaner entry - of course with a ceiling above which the company and our countries survival will be in question. Thus the pick is on a good operator within a decent industry currently experiencing struggles. **UBER** \- certainly not the typical value stock as the price has jumped over the past month. Company went from being the joke of Wall Street to a decently solid company. Again this has dreaded exposure to consumers, because if no one has money to order food or take a taxi this company dies. But they survived covid and what many believed was a trend of delivery has since become typical. Risk & potential reward is from self driving / autonomous if another company makes it there screwed but if they get it they may print without having to pay all those pesky drivers livable wages. **YELP** \- people love reviews and businesses like to advertise. Enter Yelp which sells ads space to businesses and gets consumers with reviews. Obviously main risk is people shifting towards AI for suggestions. Also exposed to consumer / business as businesses may cut advertising during a downturn / if ROI of there spend is not meaningful/ measurable. Balance sheet and valuation are both decent and the stock will behave based on whether management can keep consumers & businesses within there platform.