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OneWater Run Down

Mar. 20, 2021 10:59 AM ETOneWater Marine Inc. (ONEW)
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Seeking Alpha Analyst Since 2019


  • has a small moat.
  • size is on there side.
  • management needs work.

About the Company:

Incorporated in 2019, OneWater Marine Inc. (OneWater) is a holding company with its sole material asset being an equity interest in One Water Marine Holdings LLC (OneWater LLC). In 2014, OneWater LLC was founded through the merger of boater dealers, Singleton Assets & Operations Marine LLC and Legendary Marine LLC. Headquartered in Buford, GA, OneWater is one of the largest and fastest-growing premium recreational boat retailers in the United States. OneWater operates through its 63 stores across 11 states and employs 1,102 individuals. The company generates its revenue through a broad range of products and services, including new and pre-owned boat sales, finance and insurance products, repair and maintenance services and marine parts and accessories.

The good and the bad

good customer captivity: 

Due to the nature of the business and how Onewater goes about its acquisitions Onewater’s distributors nurture and maintain strong customer relationships. This can be shown by a staggering 40% of sales in 2019 coming from pre-existing customers. from the customer’s point of view, these mature relationships with their local boat store provide substantial switching costs ultimately resulting in customer captivity.

- Healthy supplier relationships: 

Onewaters marine is the second-largest player in the highly fragmented Boat Dealership and Repair industry in the US with a 4.1% overall grasp of the total market. Onewaters strong and unique dealer acquisition strategy combined with their diverse supplier agreements means that with every fragmented acquisition their buyer power increases, and the acquired dealers benefit greatly from supplier synergies, without being over-exposed to just one supplier.

- Management: 

Insiders hold only around 13% of total shares but active management does not hold the majority portion of this percentage meaning they don’t really have substantial skin in the game. executives don’t seem to be well incentivized to make high-quality officiant acquisitions. This shows in the company’s high goodwill, this is especially bad because the market they operate in is very mature and fragmented where new acquisitions is really the only way to grow.

-Final thoughts

It’s a good business but they really need to be more stringent with their acquisitions and ensure they are purchasing businesses that can actually create substantial value at attractive prices.

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

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