Ken Fisher (Trades, Portfolio) is the Chief Executive Officer and Chief Investment Officer of Fisher Investments. He designed the firm with one vision in mind: putting clients at the forefront and building an investment management firm to support long-term investment objectives.
Last quarter, Fisher Investments sold out its stake in Outerwall Inc (OUTR) that 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.
Q1 2015Â was a very strong quarter for them with record revenue and solid bottom line growth. The results show their ability to focus on managing expenses, while continuing to allocate capital to the initiatives.
One of the highlights this quarter was the announcement of the signature of a new two-year content agreement with Time Warner (TWX), which allows them to continue to add value to both their customers and the content creators.
They delivered 21.7% growth in core adjusted EBITDA from continuing operations and generated free cash flow had an increase of 26.2% year-over-year. For Q1 2015, they generated consolidated revenue which was the highest quarterly revenue in the company's history and diluted EPS from continuing operations had an increase of 102.1%.
Also reflecting the benefit from the price increase taken in December, Redbox revenue was up 1.3% despite a 29.3% year-over-year decline in box office for the quarter.
They will continue to be focused on optimizing Redbox and Coinstar and scaling ecoATM for profitable growth and they believe that improving all the operational efficiencies across the company will produce the highest returns, including disciplined investments in the business, repurchasing shares and paying dividends.
OUTR is trading with a P/E of 13.51. Over the past five years, the price rose by 86% while book value dropped by 2.10%, revenue grew by 25.50% , EBITDA by 26.40% and EPS grew by 37.20.
Analysts seem to be positive about the company’s prospects and have an average target price of $94 on the stock. According to GuruFocus' DCF calculator, the company has a business predictability ratio of 4.5 stars and has a margin of safety of 14%, which seems undervalued.
In 2015 Q1, the stock was sold by 4 gurus. Ken Fisher (Trades, Portfolio) sold 28% of his stake, Mario Gabelli (Trades, Portfolio) sold 38%, Joel Greenblatt (Trades, Portfolio) reduced his stake by 1.67%, while David Dreman (Trades, Portfolio) sold out his small stake.
Based on the market cap, the main competitor of OUTR is Five Below Inc. (FIVE). OUTR is trading with a very cheap P/E of 13.51 when FIVE’s P/E ratio is 42.
Both companies have almost the same operating margin but FIVE has a great 1-year earnings growth rate of 47% while OUTR is negative at -12.30%.
