ZenaidaMacroura Posted May 1, 2014 Share Posted May 1, 2014 Saw that Vistaprint was trading sharply down today on an earnings/rev miss - I remember it being one of Arlington Value's larger positions. Here's an article a while ago by Gannon waxing poetic about a possible moat at VPRT: http://www.gurufocus.com/news/161898/vistaprint-vprt-the-makings-of-a-moat I figured this might be of interest, Just printed the report and intend to look into it tomorrow. Anyone an owner/have any insight that might help? Link to comment Share on other sites More sharing options...
siddharth18 Posted May 1, 2014 Share Posted May 1, 2014 I was puzzled about that too, today. It is one of Arlington's biggest holdings so either market is missing something bit time, or it's Arlington. Excited to see how this thread develops. Link to comment Share on other sites More sharing options...
ZenaidaMacroura Posted May 1, 2014 Author Share Posted May 1, 2014 Saw this from a buddy who writes some for TMF: Link to comment Share on other sites More sharing options...
APG12 Posted May 1, 2014 Share Posted May 1, 2014 Saw this from a buddy who writes some for TMF: "Is this a total BS number? Maybe. But it's the best I could do in 20 minutes." ;D Link to comment Share on other sites More sharing options...
KCLarkin Posted May 20, 2014 Share Posted May 20, 2014 Allen Mecham at Arlington continues to add to his position. Currently 15.45% (2nd) of his portfolio. http://www.dataroma.com/m/holdings.php?m=AV Glenn Greenberg at Brave Warrior has 6% of his portfolio in VPRT. He has modestly increased his position since the stock cratered after the last earnings report. http://www.dataroma.com/m/holdings.php?m=CCM Eric Khrom, another very successful value investor, has a great write-up on VPRT in his 2012 Q3 letter: http://www.scribd.com/doc/110071973/2012-Q3-Letter-KCM Link to comment Share on other sites More sharing options...
DCG Posted May 20, 2014 Share Posted May 20, 2014 I remember the momentum clowns being all about this 'name' a few years ago. Link to comment Share on other sites More sharing options...
KCLarkin Posted May 20, 2014 Share Posted May 20, 2014 Anyone an owner/have any insight that might help? I own it (3.5% of my portfolio). For me, the key question is whether you believe in their J-curve strategy. If you do, their normalized earnings and FCF are much higher than current earnings. If you believe that current earnings are the new normal, then it is overpriced. Link to comment Share on other sites More sharing options...
Packer16 Posted May 20, 2014 Share Posted May 20, 2014 I think the key metric here is customer return rates. For the last Q that number was 42%. If it does not improve to like over 70% the J curve will never happen. I have valued recurring revenue streams and when the retention rates get below 70% then the value declines quickly. IMO this will require quite a change to occur. Packer Link to comment Share on other sites More sharing options...
KCLarkin Posted May 21, 2014 Share Posted May 21, 2014 I think the key metric here is customer return rates. For the last Q that number was 42%. If it does not improve to like over 70% the J curve will never happen. I have valued recurring revenue streams and when the retention rates get below 70% then the value declines quickly. IMO this will require quite a change to occur. Packer VPRT pays more than $25 to acquire a new customer and the average order value for a new customer is $50. Even with 65% margin, it is safe to say they lose money on any customer who doesn't repeat. Any combination of higher retention or higher average order values will have a dramatic effect on earnings. This is their J-Curve strategy. However, my investment is based on the U-curve not the J-curve. They used to earn $10 for every $100 in sales. That dropped to $2.50 recently. If this is only temporary, then normalized EPS is more like $3.60 and FMV is >$50 per share. With 65% gross margins, they have a lot of levers to boost EPS. Link to comment Share on other sites More sharing options...
ASTA Posted May 27, 2014 Share Posted May 27, 2014 Just a small article on business cards in FT.com Business cards are a ritual that will last http://www.ft.com/intl/cms/s/0/e6b8c130-e1c5-11e3-b7c4-00144feabdc0.html#axzz32uZCc42u Link to comment Share on other sites More sharing options...
ukvalueinvestment Posted May 28, 2014 Share Posted May 28, 2014 Here is some commentary from Arlington's annual letter. I need to get to know this company better. http://www.beyondproxy.com/vistaprint-vprt/?utm_source=rss&utm_medium=rss&utm_campaign=vistaprint-vprt&utm_source=beyondproxy&utm_medium=twitter Link to comment Share on other sites More sharing options...
APG12 Posted May 28, 2014 Share Posted May 28, 2014 In early 2012, management shifted strategies slightly, moving from a deep discount model intended to drive traffic and scale—a sensible “land grab” in the early years—to a heightened focus on quality, service, and the lifetime value of customers. This shift in strategy increased investments, which in turn depressed margins and slowed growth (a deadly combination for the fast-money crowd focused on steady earnings growth), though it hasn’t altered VPRT’s moat. We believe the hiccup to earnings is temporary, and we support management’s decision to sacrifice near-term earnings for greater long-term value. This is the issue I can't seem to get past. If they have a competitive advantage in a specific domain of the customer value proposition (price), why are they no longer focused on competing in the area of their advantage? Link to comment Share on other sites More sharing options...
KCLarkin Posted May 29, 2014 Share Posted May 29, 2014 This is the issue I can't seem to get past. If they have a competitive advantage in a specific domain of the customer value proposition (price), why are they no longer focused on competing in the area of their advantage? Pricing is a marketing tactic not a competitive advantage. Vistaprint is the low cost producer with huge scale advantages. They use that cost advantage to outspend their competitors on "marketing". With their old strategy, those "marketing" dollars were spent on free business card offers, heavy discounts, and aggressive cross-selling. With the new strategy, those marketing dollars are spent on brand advertising, customer service, and product quality. Anyway, I think the strategic risks are a red herring. The real story is the temporary hit to net margins and the resulting bargain stock price. At the end of the day, they still have 65% gross margins in a highly fragmented, 35% gross margin industry. Link to comment Share on other sites More sharing options...
Guest hellsten Posted July 3, 2014 Share Posted July 3, 2014 A short article on how companies have tried to "solve the problem of business cards": http://qz.com/228174/the-company-that-thinks-it-can-finally-solve-the-problem-of-business-cards/ People have been predicting the end of the business card for years. Countless startups have popped up promising to make carrying more than one card, or any at all, obsolete. Many card-scanning companies that relied on consumers have had trouble making money. Hashable shut down in 2012. The once hyped Cardcloud has not tweeted from its official account since 2012 and its website seems to be gone. CardFlick is no longer in the app store. LinkedIn bought CardMunch in 2011 but is shutting it down next month in favor of a partnership with Evernote. Even Bump, a Google-owned system that allowed people to exchange information without business cards just by tapping phones together, shut down earlier this year. Business cards are around 30% of VPRT business. Link to comment Share on other sites More sharing options...
ZenaidaMacroura Posted July 31, 2014 Author Share Posted July 31, 2014 Vistaprint beats by $0.23, beats on revs; guides FY15 EPS above consensus, revs above consensusBriefing.com(Wed, Jul 30) Link to comment Share on other sites More sharing options...
KCLarkin Posted July 31, 2014 Share Posted July 31, 2014 Vistaprint beats by $0.23, beats on revs; guides FY15 EPS above consensus, revs above consensusBriefing.com(Wed, Jul 30) Fiscal year 2014 results: o Revenue grew 9 percent year over year to $1,270.2 million o Revenue grew 4 percent year over year excluding the impact of currency exchange rate fluctuations and revenue from fiscal year 2014 acquisitions o GAAP net income per diluted share increased 51 percent year over year to $1.28 o Non-GAAP adjusted net income per diluted share increased 37 percent year over year to $2.95 Link to comment Share on other sites More sharing options...
widenthemoat Posted September 24, 2014 Share Posted September 24, 2014 Hi guys, New to the forum and am currently trying to reverse engineer the Vistaprint investment. I was reading Allan Mecham's letter and noticed he mentioned the industry having a 35% gross margin but I am not able to find this information anywhere. I tried looking for competitors that have financial statements available but kept ending up at Staples type companies which obviously are not direct competitors. Does anyone have any suggestions on how to find this type of industry/competitor information? VPRT’s dominant market position, being magnitudes larger than local print shops, produces a powerful cost advantage (manifest by 65% gross margins versus 35% for the industry) that’s difficult for competitors to match. Link to comment Share on other sites More sharing options...
KCLarkin Posted September 24, 2014 Share Posted September 24, 2014 Hi guys, New to the forum and am currently trying to reverse engineer the Vistaprint investment. I was reading Allan Mecham's letter and noticed he mentioned the industry having a 35% gross margin but I am not able to find this information anywhere. I tried looking for competitors that have financial statements available but kept ending up at Staples type companies which obviously are not direct competitors. Does anyone have any suggestions on how to find this type of industry/competitor information? VPRT’s dominant market position, being magnitudes larger than local print shops, produces a powerful cost advantage (manifest by 65% gross margins versus 35% for the industry) that’s difficult for competitors to match. There are no public direct competitors (that I know of). Deluxe (DLX) is the closest public competitor I have found. However, there are a few caveats: - Deluxe has small overlap with VPRT in terms of market - DLX charges more (something like 2x VPRT for business cards) - Deluxe has a different go-to-market strategy (mostly indirect) There are many online competitors, but I think these are all private. You could try contacting them. The 35% GM is for local print shops but I assume these are all privately held. You might be able to find industry reports for print shops. Link to comment Share on other sites More sharing options...
KCLarkin Posted October 30, 2014 Share Posted October 30, 2014 Anyone else long VPRT? Is this just a short squeeze? I haven't listened to the earnings call yet and took some profits at $61.50. The numbers looked solid but not enough to justify a 15% move. Link to comment Share on other sites More sharing options...
AccentricInv Posted November 29, 2014 Share Posted November 29, 2014 Curious about this as well. I've been delving deeper into the business and it seems interesting. But any who owns this have any opinion on if the recent move is justified? Link to comment Share on other sites More sharing options...
KCLarkin Posted December 1, 2014 Share Posted December 1, 2014 Curious about this as well. I've been delving deeper into the business and it seems interesting. But any who owns this have any opinion on if the recent move is justified? At $67, you are paying just under 18x 2015 operating earnings or about 15x my estimate of normalized earnings. That's a fair price for a company with a history of growing at 20%/year and a rock solid moat. I suspect you will see some of value investors trimming their stakes this quarter but it is still an attractively priced quality and growth stock. Here is a write-up I did on Vistaprint in August: https://docs.google.com/document/d/1T4l7uJrLm7YchY-jZP6DReFKjM9c0_v9xagdTXNE7QM/edit?usp=sharing This was written when the stock was around $47 so any numbers in the report are obsolete. You should also check out the following: Eric Khrom: http://www.scribd.com/doc/148405390/Eric-Khrom-of-Khrom-Capital-2012-Q3-Letter Mecham: http://www.beyondproxy.com/vistaprint-vprt/ VIC writeups Analyst Day (August 2014): http://ir.vistaprint.com/phoenix.zhtml?c=188894&p=irol-presentations Link to comment Share on other sites More sharing options...
AccentricInv Posted December 4, 2014 Share Posted December 4, 2014 Curious about this as well. I've been delving deeper into the business and it seems interesting. But any who owns this have any opinion on if the recent move is justified? At $67, you are paying just under 18x 2015 operating earnings or about 15x my estimate of normalized earnings. That's a fair price for a company with a history of growing at 20%/year and a rock solid moat. I suspect you will see some of value investors trimming their stakes this quarter but it is still an attractively priced quality and growth stock. Here is a write-up I did on Vistaprint in August: https://docs.google.com/document/d/1T4l7uJrLm7YchY-jZP6DReFKjM9c0_v9xagdTXNE7QM/edit?usp=sharing This was written when the stock was around $47 so any numbers in the report are obsolete. You should also check out the following: Eric Khrom: http://www.scribd.com/doc/148405390/Eric-Khrom-of-Khrom-Capital-2012-Q3-Letter Mecham: http://www.beyondproxy.com/vistaprint-vprt/ VIC writeups Analyst Day (August 2014): http://ir.vistaprint.com/phoenix.zhtml?c=188894&p=irol-presentations Amazing, thank you. I've seen Mecham's and Khrom's letters on the name, but I'll go thru the VIC writeups tomorrow. Seems like they bought it in 2012/13 at the same FCF yield as it's trading at today (despite the 2x in price). Will need to delve into this more to see if the growth and margin expansion expectations are realistic. Link to comment Share on other sites More sharing options...
KCLarkin Posted January 29, 2015 Share Posted January 29, 2015 Another solid quarter: Second quarter 2015 results: ◦ Revenue grew 19 percent year over year to $439.9 million ◦ Revenue grew 7 percent year over year excluding the impact of currency exchange rate fluctuations and revenue from businesses acquired during the past twelve months ◦ GAAP net income per diluted share increased to $1.89, compared with $1.18 in the same quarter last year ◦ Non-GAAP adjusted net income per diluted share increased 41 percent year over year to $2.12 Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now