3/08/2015

Institutional Negative Sentiment, Two Contrarian Thoughts


Travelzoo Inc. (TZOO): Price = $9.77

“Travelzoo Inc. is an Internet media company, which informs over 27 million subscribers, as well as millions of Web site users, about the travel and entertainment deals available from thousands of Companies.” Morningstar


Summary Thesis
The annihilated stock price creates a margin of safety with cheap strong valuation versus its industry and history. 

Down -59.16% over the past 52 weeks, Revenue growth for 10 years was 17.20%, Revenue growth for 5 years 11.70%, Book value 5 year growth was 3.60%.

Valuable website properties should entice a strategic buyer. Fly.com (a flight search engine), SuperSearch (travelzoo.com/supersearch/ for flights, hotels, vacations and car rentals. 


Founder Bartel Ralph owns 51%.




















Note the growing tangible book value per share, historically cheap EV/Revenue, current enterprise value of 89.10M versus 639.02M EV(2010),353.28M EV (2011), 253.36M EV (2011). 


Market Cap:  143.91M , Enterprise Value:  89.10M
Price/Sales (ttm): 1.04 , Price/Book (mrq):   3.71
Enterprise Value/EBITDA (ttm): 5.62
Profit Margin (ttm):  11.51% , Operating Margin (ttm): 9.48%
Return on Assets (ttm): 8.20% , Return on Equity (ttm): 45.97%
Revenue (ttm):  142.08M , Revenue Per Share (ttm):     9.62
Qtrly Revenue Growth (yoy):   -15.90%
Gross Profit (ttm):  124.17M , EBITDA (ttm):  15.87M
Total Cash (mrq): 54.81M , Total Cash Per Share (mrq):     3.72
Current Ratio (mrq):2.13 , Book Value Per Share (mrq):2.70
52-Week Change:    -59.16%
52-Week High(Mar 10, 2014):24.11 , 52-Week Low)(02/10/15): 8.45
Shares Outstanding: 14.73M , Float: 6.06M
% Held by Insiders:  52.32% , % Held by Institutions:  38.10%
Short % of Float :5.40%



Five Star Quality Care Inc. (FVE):Price = $3.56

“Five Star Quality Care Inc a healthcare and senior living provider. It is engaged in operating senior living communities, including independent living or congregate care communities, assisted living communities and skilled nursing facilities.” Morningstar

Summary Thesis
Mean reversion candidate within a demographically favorable industry, Long-Term Care Facilities.

60.22% off 5 year high, and 41.54% off 52 week high, 5 year range 2.15 to 8.95.

Price and valuation are near 2 year low.

IMPROVING valuations such as tangible book value per share, revenue per share, EV to revenue per share.

Own or lease 211 senior living communities





















Market Cap:  173.23M , Enterprise Value: 210.31M
Price/Sales (ttm):   0.16 , EV/Revenue (ttm):    0.19,  Price/Book (mrq):  0.59
Enterprise Value/EBITDA (ttm): 10.40
Revenue (ttm):  1.10B , Revenue Per Share (ttm):    22.94
Qtrly Revenue Growth (yoy):   2.80%
Gross Profit (ttm): 1.09B ,EBITDA (ttm):  20.23M
Total Cash (mrq):40.00M , Total Cash Per Share (mrq):     0.82
Total Debt (mrq):77.07M , Total Debt/Equity (mrq):  25.71
Current Ratio (mrq): 0.69 , Book Value Per Share (mrq):6.16
Operating Cash Flow (ttm): 30.32M 
52-Week Change:    -40.27%
52-Week High:6.09 , 52-Week Low: 3.23
% Held by Insiders: 17.16% , % Held by Institutions:  60.80%

Short % of Float : 1.70%

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