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I Am Adding Monro Muffler Brake To My Watch List, Here's Why

Sep. 04, 2015 4:14 AM ETMonro, Inc. (MNRO)4 Comments
William Bias profile picture
William Bias


  • Monro Muffler Brake needs to bring more customers into its established stores.
  • The company has expanded heavily via store openings and acquisitions.
  • It possesses relatively low amounts of long-term debt.

It's important for long-term investors to develop a guide for doing their investment research. Over the years, I have developed questions to guide me in my thinking when researching the publicly traded universe. This represents a good starting point before doing more in-depth research. Right now, let's talk about Monro Muffler Brake (NASDAQ: NASDAQ:MNRO).

1.) What does the company do?

When you buy shares in a company, you effectively become part owner of that company. Therefore, it's important for an investor to understand what a company sells. Monro Muffler Brake operates and franchises a chain of car repair and tire service locations in the United States. It operates under many different names, including Tread Quarters Discount Tires, Autotire, Tire Barn and Car-X, to name a few.

2.) What do the fundamentals look like?

Investors should also look for companies that grow revenue and free cash flow over the long term, retaining some of that cash for reinvestment back into the business and for economic hard times. Excellent revenue and free cash flow growth serve as catalysts for superior long-term gains. Monro Muffler Brake expanded its revenue, net income and free cash flow 47%, 58% and 43%, respectively, over the past five years (see chart below). Over the past five years, acquisitions and the opening of new stores have served as catalysts for expanding fundamentals. However, it hasn't seen any growth at its established stores since FY 2012. While opening and acquiring new stores are nice, I like to see companies grow revenue at established locations as well.

MNRO Revenue (<a href=

MNRO Revenue (TTM) data by YCharts

The pattern for Monro Muffler Brake continues to a degree so far this year. In the most recent quarter, the company saw its revenue and net income increase 9% and 11%, respectively, year over year. Its free cash flow declined 12% year over year. Newly

This article was written by

William Bias profile picture
I have been analyzing stocks since 1992 and a freelance writer since 2012.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (4)

30372955 profile picture

Thanks for your article on Monroe Muffler and Brake. I like to learn about anything that has to do with automotive.
William Bias profile picture
I appreciate your readership!

gonji profile picture
04 Sep. 2015
Thanks for highlighting companies that are honestly not on my radar. I too place a high emphasis on very low long term debt.
William Bias profile picture
Hi gonji,

Thanks for reading.

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