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PRO Top Ideas
Top Ideas are high-conviction long or short ideas focused on market mispricings with asymmetric risk/reward profiles.
Marchex: Another Bubble Basket Stock
- Marchex is a low margin business with poor returns on capital trading for a staggering ~49x EBITDA.
- The Company is heavily reliant on search engines such as Google and Yahoo combined with a concentrated customer base.
- The bull thesis overlooks the Management team's poor capital allocation skills, numerous business flip-flops and finally insider sales.
Papa Murphy's Holdings Inc: Another Gift From The JOBS Act
- Papa Murphy's is a recent JOBS Act IPO and a compelling short at the current price.
- The Company is priced for perfection, as the business operates in a low barriers to entry environment combined with a over-levered balance sheet.
- Further headwinds include franchisee issues, potential upcoming exit of the Company's financial sponsor, reduction in SNAP benefits and the closure of a sales tax loophole.
- Digital Cinema Destinations: Investing In A Middle-Market Roll-Up Without The Private Equity Fees
- Franklin Financial: Thrift Shopping Among Community Banks
- Charter Financial: Post-Second Step Convert Trading Below Its Tangible Book Value
- Lumber Liquidators: Unsustainable Valuation For A No-Moat Business
- Chico's FAS: A Growth Story At A Value Price
- American Eagle Outfitters Offers Investors Multiple Ways To Win
- Lexmark: Strong Free Cash Flow Generator With Catalysts In Place
- Paradise, Inc.: A Net-Net That Is Ripe For A Buy-Out
- Murphy USA: Follow The Spin-Offs
- Ascena Retail Group: Leading Market Share And Aligned Management Below Its Private Market Value
- Janus: Abnormally High Returns On Invested Capital At A Low Multiple Of Free Cash Flow
- Cowen Group: Trading Below Liquid Assets With An Asset Manager Thrown In For Free
- Tellabs: Discounted Assets With A Catalyst