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Gregory Vousvounis
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I am a full time investor mainly focused on US equities. I consider my self a value investor, committed to the Buffett & Munger way of thought. That means I like companies that are simple to understand, have a strong competitve advantage and are of course... extremely cheap. If I can't find... More
My blog:
Moat Investing
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  • Wesco Aircraft: How To Turn Nuts & Bolts Into A Wide-Moat Business

    (click to enlarge)


    Wesco Aircraft (NYSE:WAIR) is according to its latest 10-K:

    "…one of the world's largest distributors and providers of comprehensive supply chain management services to the global aerospace industry on an annual sales basis. Our services range from traditional distribution to the management of supplier relationships, quality assurance, kitting, just-in-time, or JIT, delivery and point-of-use inventory management. We supply approximately 525,000 different stock keeping units, or SKUs, including hardware, bearings, tools and more recently, electronic components and machined parts.

    In fiscal 2013, sales of hardware represented 83% of our net sales, with highly engineered fasteners constituting 80% of that amount. We serve our customers under three types of arrangements: JIT contracts, which govern comprehensive outsourced supply chain management services; long term agreements, or LTAs, which set prices for specific parts; and ad hoc sales. JIT contracts and LTAs, which together comprised approximately 60% of our fiscal 2013 net sales, are multi-year arrangements that provide us with significant visibility into our future sales.

    Founded in 1953 by the father of our current Chief Executive Officer, or CEO, Wesco has grown to serve over 7,400 customers in the commercial, military and general aviation sectors, including the leading OEMs and their subcontractors, through which we support nearly all major Western aircraft programs. We have grown our net sales at a 15.6% compound annual growth rate, or CAGR, over the past 20 years to $901.6 million in fiscal 2013. We serve a large and growing global market, and believe that with more than 1,300 employees across 42 locations in 12 countries, we are well positioned to continue our track record of strong long-term growth and profitability."

    In simpler words the company manages its customers' inventory for the following product categories:Product Categories

    Wesco's customer are in the aerospace industry and are major OEMs and their subcontractors:Here are some aircraft types that are serviced by Wesco:

    (click to enlarge)Wesco works essentially as a big "warehouse" that receives parts in a cost-effective manner (big and/or planned orders) from suppliers and provides them in a timely and as-needed basis to its customers. It also performs quality control on behalf of its customers helping their operations to run as smoothly as possible.

    Read the rest of this post at

    Disclosure: The author is long WAIR.

    Aug 03 4:30 PM | Link | 1 Comment
  • Liquidity Services: A Case Of An Illusory Network-Type Moat

    One of the things that are permanently on my to-do list is to constantly look for companies with a durable competitive advantage (aka "moat") to add to my watch-list or even better to my portfolio if I'm lucky and find one on the cheap.

    One company that looked quite promising was Liquidity Services Inc which trades on NASDAQ under the symbol "LQDT". Here what LQDT does as it was reported in its 2013 10-K:

    "We operate leading online auction marketplaces for surplus and salvage assets. We enable buyers and sellers to transact in an efficient, online auction environment offering over 500 product categories. Our marketplaces provide professional buyers access to a global, organized supply of surplus and salvage assets presented with customer focused information including digital images and other relevant product information along with services to efficiently complete the transaction. Additionally, we enable our corporate and government sellers to enhance their financial return on excess assets by providing liquid marketplaces and value-added services that integrate sales and marketing, logistics and transaction settlement into a single offering. We organize our products into categories across major industry verticals such as consumer electronics, general merchandise, apparel, scientific equipment, aerospace parts and equipment, technology hardware, energy equipment, industrial capital assets, fleet and transportation equipment, and specialty equipment. Our online auction marketplaces are,,,,,, and"

    What essentially LQDT does is being a "market maker" in the surplus & salvage assets market. It makes it easy for big companies that neither have nor want to operate a reverse supply chain for their surplus & salvage assets. LQDT does it for them. It picks up the goods, stores them and makes sure to find a willing buyer to sell them to.

    At first glance LQDT seems to benefit from a classic network-type moat. The more asset sellers it serves the more asset buyers it attracts and the more asset buyers it attracts the more asset sellers are attracted to its services. And the virtual cycle goes on and on..

    Read the rest of this post at

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: LQDT
    Jan 28 7:08 PM | Link | 1 Comment
  • FTD Companies: A Fairly Valued Company With A Strong Moat But Low Growth Potential.


    FTD (NASDAQ: FTD) is a floral and gifting company. It connects consumers with local florists and gift shops from all over the world. A typical order for FTD goes like this:

    A customer orders some flowers of his choosing, online or over the phone, to be delivered at a specific address. FTD redirects the order to one of the florists that belong to its network and is closest to the delivery address. The florist prepares the order and delivers it to the specified address either the same day or the day that the customer specified.

    From this transaction FTD gains two-fold. It receives a part of the order as a fee for connecting the customer and the florist, and it receives an annual subscription fee from the florist in order to include his business in its network.

    (click to enlarge)

    FTD's Brands

    FTD is a recent spinoff from United Online (NASDAQ: UNTD) and is again a public company since November 1, 2013. I say "again" because FTD has entered and exited the stock market many times over the last 14 years, as you can see below.

    (click to enlarge)

    A slide with FTD's history as shown in its investor presentation on December 3, 2013.


    This company is interesting because it seems to have a very wide moat. The moat is its network of 40,000 floral shops worldwide, which is a huge network if we consider that the US floral market consists of approximately 15,000 retail florists. In the floral network business the more locations a network covers the more orders it gets, and the more orders it gets the more florists want to join in adding new locations.

    Read the rest of this post at

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: FTD
    Dec 12 11:01 AM | Link | Comment!
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