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““Dinero Diablos”Dinero Diablos”
Portfolio Analysis: Dashboard Diagnostics Portfolio Analysis: Dashboard Diagnostics
April 21, 2010
Presented by:
Mark RobertsonFounder and Managing Partner –
www.manifestinvesting.com
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
Club History & CharacteristicsClub History & Characteristics
Club Name: “Dinero Diablos”
Location: Northern California
# of Members: 16 (All-Male)
Founded: TBD
The club uses a set of rules for selling: (1) Sell Zone, (2) Sales/EPS stagnant 3-4 quarters, (3) U/D = 1,
(4) Relative Value > 150%, (5) <5-7% Total Return, (6) Down trends in margins, (7) Stock
price decline for no apparent reason.
Simplify. Treat decisions from a total portfolio perspective. Core holdings: Sell if PAR is less than money market rates. Non-Core holdings: Sell if PAR is less than market average.
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
50 55 60 65 70 75 80 85 90
Quality
3% 5% 7% 9% 11% 13% 15%
Sales Growth
0% 5% 10% 15% 20%
PAR
Dashboard View: (1) Returns, (2) Quality, (3) GrowthDashboard View: (1) Returns, (2) Quality, (3) Growth
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
Sector Diversification
Cash3%Energy
7%Staples
6%
Communications6%
Discretionary17%
Technology7%
Industrials11%
Financials
Healthcare40%
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
0%
5%
10%
15%
20%
25%
30%
8 9 10 11 12 13 14 15 16 17 18 19 20
Number of Holdings (Stocks)
% o
f T
ota
l A
sset
s
Position Size Range Recommendations …Position Size Range Recommendations …
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
Challenge: EZCORP (EZPW) ... Auto-Sell?Challenge: EZCORP (EZPW) ... Auto-Sell?
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
Summary (Points of View): EZCORP (EZPW) Summary (Points of View): EZCORP (EZPW) MANIFEST Value Line S&P Morningstar
Return Forecast 1.6% ($22.70) -1% [1] ($17.75)
Quality 59.3 B
Financial Strength
57 (5% of Capital @
6.22%)
B++ A
Growth Forecast 14% 8.5% (per sh)
Profitability 11.9% (Net)
14.6% (ROE)
12.9% (Net)
Valuation 10.0x 10.0x 10.7x ($17.70)
Overall Rating Weak Hold (48)
StockCharts RSI = 65.9 PnF Sentiment: “Bullish” (Price Objective: $24) CASPI = 97.8% April 21, 2010
[1] – Low VL 3-5 Year Forecast
StockCharts RSI = 65.9 PnF Sentiment: “Bullish” (Price Objective: $24) CASPI = 97.8% April 21, 2010
[1] – Low VL 3-5 Year Forecast
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
Sales Growth & 5-Year Forecast (EZPW)Sales Growth & 5-Year Forecast (EZPW)
1. We’ve added 2010E and 2011E (ACE). 2. Note the “bends”, lower expectations for 2011 ... Cycle characteristics? 3. Note the
shift in shares outstanding in 2009.
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
Sales Growth & 5-Year Forecast (EZPW)Sales Growth & 5-Year Forecast (EZPW)
1. Switching to Sales/share. 2. 5-Year historical growth aligns with VL. 3. VL forecasts a decline to 8.5% (influence of 2011?)
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
0%
5%
10%
15%
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
% Net Margin
Profitability ‘Report Card’ and Forecast (EZPW)Profitability ‘Report Card’ and Forecast (EZPW)
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
Profitability ‘Report Card’ and Forecast (EZPW)Profitability ‘Report Card’ and Forecast (EZPW)
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
Valuation Characteristic and Trend (EZPW)Valuation Characteristic and Trend (EZPW)
A projected average P/E in the realm of 10x seems pretty reasonable.
10 Years
5 Years
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
[Modified] Preferred Procedure (EZPW)[Modified] Preferred Procedure (EZPW)
Sales (Trailing 12-Mo) 673
X Net Margin (%) 11.9%
/ Shares (M) 48.7
Earnings Per Share $1.65
X P/E Ratio 13.8x
Stock Price (4/20/2010) $22.70
Income Statement (4/21/2010)
Income Statement (4/21/2015)
Sales 1268
X Net Margin (%) 12%
/ Shares (M) 52.0
Earnings Per Share $2.93
X P/E Ratio (Proj Avg) 10.0x
Stock Price $29.30
@ 13.5%
5.2%
+ 0.0% (Ann. Yield)
5.2% = Projected Annual Return (PAR)
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
Technical Analysis (EZPW)Technical Analysis (EZPW)
Institutions hold 78.9% of shares
A single individual holds 100% of voting shares.
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
Ask the Audience: Would you sell EZPW?Ask the Audience: Would you sell EZPW?
Yes, Sell!Yes, Sell!
No. Hold, I feel lots of No. Hold, I feel lots of momentum with this one.momentum with this one.
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
Any holdings qualified as accumulation targets?Any holdings qualified as accumulation targets?
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
Accumulation Candidate: FTI Consulting (FCN)Accumulation Candidate: FTI Consulting (FCN)
Growth=11% Profitability=10% P/E=18x ... PAR ~20% QR=74.7
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
Accumulation Candidate: ITT Educational (ESI)Accumulation Candidate: ITT Educational (ESI)
Growth=16% Profitability=21% P/E=17x ... PAR ~19% QR=78.5
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
Add 100 shares of FCN and 40 shares of ESI ...Add 100 shares of FCN and 40 shares of ESI ...
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
Sold EZPW, Added ESI & FCN ... And Bought ORCLSold EZPW, Added ESI & FCN ... And Bought ORCL
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Dashboard Diagnostics: Dinero DiablosDashboard Diagnostics: Dinero Diablos
Think Results. Impact. Before and After. Bigger Picture.Think Results. Impact. Before and After. Bigger Picture.
Before. After.
Converting the challenge stock to cash and accumulating a couple of high-return (high-quality) holdings with some non-healthcare
shopping nudges the portfolio in the right direction.
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