Yesterday there was a big drop for a stock into my watching list.
It happened to Outerwall Inc (OUTR).
The Company is a provider of automated retail solutions offering convenient products and services that benefit consumers and drive incremental retail traffic and revenue for retailers. The Company's automated retail includes its redbox segment where consumers can rent or purchase movies from self-service kiosks and its Coin segment where consumers can convert their coin to cash or stored value products at coin-counting self-service kiosks.
The price dropped -20% from the previous close and from its 52Weeks High after a rally of +50% started on October 2014.
Two main news caused this drop :
1) Its CEO J. Scott Di Valerio (58,097 Shares, 0,31% of Outstanding Shares) resigned after less than two years of work. The Company did not give any reason other then it was the “right time for a leadership change" and named Nora Denzel, a board member as interim CEO, waiting to designate a permanent successor.
2) The company ,based on its reports, narrowed its revenue forecast of 598 mln $ / 602mln $ to 598 mln $. Despite these bad news, the company expects EPS for this quarter of $2.40 to $2.52, while prior news were expecting a range of 1.85$-2.15$.
Outerwall has a ROE of 31.16% and a ROC of 47%, topping the Global Specialty Retail sector as well as the company history. Price and Valuation. Shares left 15.72$ or 20.21% to 62.05$ (61.99$ in After Hours) The Peter Lynch Value gives a price of 112.75$ and the Earnings Line is at 131.6$ The DCF gives a fair value of 66$.
Technically these news and the today trend cannot have any impact on the value of the company. We can just take care of the entry price, and the today drop of 20% is a good starting point.
Growth.
Despite today news, revenue of the last 3Y grew at an average rate of 22% and even here is the best performance of its sector. On the last 5 years Revenue grew of 24%, EBITDA of 27% and the Book Value of 11.90%
It happened to Outerwall Inc (OUTR).
The Company is a provider of automated retail solutions offering convenient products and services that benefit consumers and drive incremental retail traffic and revenue for retailers. The Company's automated retail includes its redbox segment where consumers can rent or purchase movies from self-service kiosks and its Coin segment where consumers can convert their coin to cash or stored value products at coin-counting self-service kiosks.
The price dropped -20% from the previous close and from its 52Weeks High after a rally of +50% started on October 2014.
Two main news caused this drop :
1) Its CEO J. Scott Di Valerio (58,097 Shares, 0,31% of Outstanding Shares) resigned after less than two years of work. The Company did not give any reason other then it was the “right time for a leadership change" and named Nora Denzel, a board member as interim CEO, waiting to designate a permanent successor.
2) The company ,based on its reports, narrowed its revenue forecast of 598 mln $ / 602mln $ to 598 mln $. Despite these bad news, the company expects EPS for this quarter of $2.40 to $2.52, while prior news were expecting a range of 1.85$-2.15$.
Outerwall has a ROE of 31.16% and a ROC of 47%, topping the Global Specialty Retail sector as well as the company history. Price and Valuation. Shares left 15.72$ or 20.21% to 62.05$ (61.99$ in After Hours) The Peter Lynch Value gives a price of 112.75$ and the Earnings Line is at 131.6$ The DCF gives a fair value of 66$.
Technically these news and the today trend cannot have any impact on the value of the company. We can just take care of the entry price, and the today drop of 20% is a good starting point.
Growth.
Despite today news, revenue of the last 3Y grew at an average rate of 22% and even here is the best performance of its sector. On the last 5 years Revenue grew of 24%, EBITDA of 27% and the Book Value of 11.90%
Conclusions.
Value investor that already hold this company on their portfoios will not take care of this news, because the company is growing, and every drop related to a bad news will not affect the 360° analysis of the stock.
The company is growing steadily and I suggest to wait for the next days to see if Mr. Market wants to give us an even cheaper entry price.
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