This week we briefly go over this morning’s Facebook drop in the market, before we dive right into Blue Apron’s evaluation. You won’t want to miss this episode if you want a step by step guide for looking into a company of interest.
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In Episode 154 You’ll Learn:
- Build Your Investing Story & Facebook’s Drop
- Your story needs a moat, and a good one.
- Make sure you understand the company and its value to you, ask yourself the 4 M’s (download the guide here).
- Make a plan for things to go wrong (management to change, a market drop, new technology, competitors etc.), and establish your margin of safety.
- Blue Apron (APRN)
- Only one 10k out since 2017 (including some previous year’s data).
- All the numbers are negative, but people are looking for what the future will bring.
- What is their industry?
- “Food & Drug Stores”
- What is keeping you “locked in”?
- They think you are benefitting from their algorithm knowing your preferences the best.
- There is no “switch” moat, it is too easy to switch to another brand instantly.
- Blue Apron has 40% of the market but does not retain customers at a high rate.
- Dual-Class Company Structure – Founders/Management are still the primary decision makers within the business.
- Return on Equity: -454% (equity in the business divided by the earnings)
- Debt: Using the Balance Sheet (looking at long-term debt) – $195 million in debt.
- Net Income is Negative – “DONE.”
- Red Flag: 300 million dollars came out of the bank last year.
- What Danielle Does When Looking at a Company
- Keeps a Template of an “Investing Story”
- Copy and Paste the Template into a New Note
- Fill in the Blanks
- Put the date so you know when you researched the company last.
- Ask yourself, what made me interested in the company to start with?
- Next Week’s Podcast: Facebook Live – Next Wednesday the 28th
- Why? Because our book launches next Tuesday, March 27th!
- Pre-Order it Now
- Watch on Facebook Here
- Preorder Danielle & Phil’s New Book Invested – Out March 2018!
- Rule #1 Toolbox for Investing Numbers & Data