More excerpts from an April interview with the Manual of Ideas.
http://greatinvestors.tv/video/what-makes-cabelas-cab-special-jonathan-heller.html
*The author has a position in AWX. This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only.
2 comments:
Cabelas is a horrible business. Return on capital around 5%. Over last 10 years while the company supposedly "made money hand over fist" they would have made much more money if they had just invested capital they put into stores into 10year treasury bonds. Horrible capital allocators (but getting better now that they aren't building mega stores). It's not a good business if they pour in huge amounts of capital to eke out small profits. They finally figured this out! The "museums" don't cover their cost of capital!
You do realize AWX is a classic value trap. They have done nothing but destroy shareholder value for years. The CEO holds control through a separate class of stock. Gas or no gas this thing stinks... Love the blog, but not AWX. The CEO is just milking the company for personal gain and does NOT care about shareholders. How do you expect to get any sort of return from something like this? Sure it is under book, but there are lots of companies under book that are profitable and serve shareholders. Seems to me this CEO just wants to play golf on a course he owns and screw over shareholders. Love to hear your thoughts on this.
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