SQ – BLOCK, INC. (HQ: USA/Industry: IT Services)
Block, formerly Square, provides more than 30 distinct products and services to sellers that help them manage and grow their business. Along with building an ecosystem of financial services to help individuals manage their money. The company’s purpose of economic empowerment drives the development of all products and services.

Over the past year Block’s stock price has had a steep decline in value, but even with this recent decline the stock has outperformed the S&P500 if owned for the previous 2-years or longer. The stock still trades at a high premium with a P/E over 420, and a share count that grew 81% over the last 10-years. To value the business at their current market price the company would need more than a 46% per year growth for the next 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=1512673&owner=exclude

RUTH – RUTH’S HOSPITALITY GROUP, INC. (HQ: USA/Industry: Hotels, Restaurants & Leisure)
Ruth’s Hospitality Group develops and operates fine dining restaurants under the trade name Ruth’s Chris Steak House, and is one of the largest upscale steakhouse companies in the world. The menu features a broad selection of high-quality USDA Prime and Choice grade steaks and other premium offerings With 150 Ruth’s Chris Steak House restaurants, which includes 23 international franchisee-owned restaurants.

Since March 2020 Ruth’s stock price has rebounded, but underperformed the market and still below its all-time highs from 2018. Although 2020 was the only year for negative EPS, the company’s FCF has been positive, along with average 22% ROE and 16% ROIC over the past 10-years. To value the business at their current market price the company would need more than an 8% per year growth for the next 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=1324272&owner=exclude

SPTN – SPARTANNASH COMPANY (HQ: USA/Industry: Food & Staples Retailing)
SpartanNash is a food solutions company that delivers the ingredients for a better life through customer-focused innovation. Its core businesses include distributing grocery products to a diverse group of independent and chain retailers, its corporate-owned retail stores, and U.S. military commissaries and exchanges, as well as operating a premier fresh produce distribution network.

SpartanNash’s financial performance during the last 10-years has been inconsistent, with multiple years of declining revenue, EPS, FCF, and to include negative EPS and FCF. Along with a low ROE of 6%. But over the past 2-years the stock has outperformed the S&P500, however, looking at a longer term period the index provided greater returns. To value the business at their current market price the company would need more than a 4% per year growth for the next 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=877422&owner=exclude

AME – AMETEK, INC. (HQ: USA/Industry: Electrical Equipment)
AMETEK is a leading global manufacturer of electronic instruments and electromechanical devices with operations in North America, Europe, Asia and South America.

Over the long-term, AMETEK has been a good investment outperforming the market. With modest revenue growth over 65% over the last 10-years. Along with EPS, BV and FCF that has mostly been trending upward, to include an average 17% ROE and 12% ROIC. To value the business at their current market price the company would need more than a 15% per year growth for the next 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=1037868&owner=exclude

FNKO – FUNKO, INC. (HQ: USA/Industry: Distributors)
Funko is a leading pop culture lifestyle brand. Its business is built on the belief that everyone is a fan of something, and Funko aims to have something for every fan. By creating whimsical, fun and unique products that enable fans to express their affinity for their favorite movie, TV show, video game, musician or sports team. Infusing a distinct designs and aesthetic sensibility into its extensive portfolio of licensed content over a wide variety of product categories, including figures, bags, wallets, apparel, accessories, board games, plush, homewares and digital non-fungible tokens, which are made available at highly accessible price points.

Funko’s time as a publicly traded company has only been for the past several years, but they have been profitable with positive EPS and only one year of negative FCF in 2017, since then FCF has been steadily growing. However, the share count has grown as well. The stock is fairly valued by the market, however, it does not take into account a sufficient margin of safety.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=1704711&owner=exclude