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Here's Why I'm Holding Onto Cintas

Nov. 10, 2015 11:51 PM ETCintas Corporation (CTAS)
William Bias profile picture
William Bias


  • Cintas provides services that add brand value to its clients.
  • Cintas’s employee retention and training attitude translated into excellent fundamentals for the company.
  • Cintas reduced long-term debt so far in FY 2015.

Investors become co-owners of dynamic businesses when they buy shares of a publicly traded company. With that said, it is important for investors to understand the businesses in which they are investing. Publicly traded business owners should want their enterprises to sell highly wanted or needed products. It's also good for your business to sit behind high barriers to entry against competitors. Cintas (NASDAQ: NASDAQ:CTAS) represents an example of a company that provides a highly needed service. Let's examine.

What does Cintas do?

Cintas is in the business of selling and renting uniforms and accessories, cleaning supplies and janitorial services, and safety supplies and services. Cintas helps improve the brand of its business clients by keeping their environment clean and professional looking for their customers. Company names on client uniforms helps market the brand of Cintas' clients.

Barriers to entry?

Due to the service nature of the business Cintas' barriers to entry from competitors remain relatively low. Technically, anyone with some financial backing can design a cool company logo, solicit clients and begin selling and renting uniforms and safety supplies and services. However, personal experience has taught me that the need to build solid business relationships and a lack of experience in the business could provide significant hurdles to competitors. Any experienced salesman has heard a prospective client say, "I already have someone for that and I like him/her very well." Unless the competitor can offer a great deal more for each dollar spent, people will generally continue to do business with those who they trust and, quite frankly, like on a personal level.

On that note, Cintas' management asserts that one of the key drivers of sales growth resides in the "increased tenure and improved training" of its sales force. Salespeople who have worked for Cintas over a large number of years better understand

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 am/we are long CTAS. 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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