Conflict And Stagnation Cost Millions In Rocky Mountain Chocolate Factory

Quipus Capital
1.56K Followers

Summary

  • RMCF is a chocolate, confectionery, and ice cream manufacturer and franchisor with a long-term shrinking market.
  • The company is losing franchises in the US and is battling its online retail partner in the US and its franchise partner in Canada.
  • A proxy battle between management and a group of shareholders cost the company $3.6 million in 2021 alone.
  • The company is selling at attractive ratios to historic earnings.
  • However, heightened conflict, long-term decay, and lack of a clear growth strategy deter from investing.

Estación de esquí de estilo suizo en Vail, Colorado con Rocky Mountain Chocolate Factory shop restaurant

ablokhin/iStock Editorial via Getty Images

Rocky Mountain Chocolate Factory (NASDAQ:RMCF) is a chocolate, confectionery and ice cream manufacturer and franchisor based in Colorado.

The company was able to pull $40 million in revenues and $4.5 million in net income in 2016, with 600 stores across the US and

This article was written by

1.56K Followers
Long-only investment, evaluating companies from an operational, buy-and-hold perspective.Quipus Capital does not focus on market-driven dynamics and future price action. Instead, our articles focus on operational aspects, understanding the long-term earnings power of companies, the competitive dynamics of the industries where they participate, and buying companies that we would like to hold independently of how the price moves in the future. Most QC calls will be holds, and that is by design. Only a very small fraction of companies should be a buy at any point in time. However, hold articles provide important information for future investors and a healthy dose of skepticism to a relatively bullish-biased market.Disclaimer: All of the author's articles are written on an "as is" basis and without warranty. They represent the author's opinion only and in no way constitute professional investment advice. It is the responsibility of the reader to conduct their due diligence and seek investment advice from a licensed professional before making any investment decisions. The author disclaims all liability for any actions taken based on the information contained in any articles published.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such 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.

Recommended For You

About RMCF Stock

SymbolLast Price% Chg
Market Cap
PE
Yield
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on RMCF

Related Stocks

SymbolLast Price% Chg
RMCF
--