July 02, 2016
"My life is for itself and not for a spectacle." Qualitative small-cap value investor.
Franklin Covey: A Compelling High-Return, Low-Risk Pitch… And I’m Swinging
Summary: the "All Access Pass," a new go-to-market offering for performance-improvement company Franklin Covey, which is the equivalent of a season pass at Six Flags, is resulting in the company lowering reported guidance. On the other hand, economic fundamentals of the business have never been stronger. All Access Pass represents a tremendous value proposition for clients.
While shares are illiquid, smaller funds (and/or PAs) have the opportunity to purchase a high-quality, cash-generative business at a significantly below-market multiple with significantly above-market growth potential. High-integrity management strikes the perfect balance between devoting free cash flow to accretively repurchasing shares while not taking on any balance sheet risk.
On reasonably conservative assumptions, I believe shares will be worth $25+ three years from today, offering investors the opportunity for low-risk compounding at 20% or greater. Please see attached PDF for more detailed analysis.
While shares are illiquid, smaller funds (and/or PAs) have the opportunity to purchase a high-quality, cash-generative business at a significantly below-market multiple with significantly above-market growth potential. High-integrity management strikes the perfect balance between devoting free cash flow to accretively repurchasing shares while not taking on any balance sheet risk.
On reasonably conservative assumptions, I believe shares will be worth $25+ three years from today, offering investors the opportunity for low-risk compounding at 20% or greater. Please see attached PDF for more detailed analysis.
Loading PDF
More from Samir Patel
The most important insight of the day
Get the Harvest Daily Digest newsletter.