Jump to content

Family owned / Owner operator companies


WneverLOSE
 Share

Recommended Posts

Hello, I am looking for companies which the majority ownership is held by the founding family or a business which is still being run by the original founder.

I am kind of wary of backtest studies, but nonetheless numerous studies have found that family owned or owner-operator business outperform other business.

I try not to think about such complex things but I do like the idea that if something goes wrong, you are not the biggest loser, the owner of the company (family or individual) will lose a lot more than you do, so if they/he didn't sold their share yet, they probably believe it's underpriced or have enough growth ahead to still be worth more in the future.

 

couple of companies I currently invest in which fall under the above classification include : IBKR and MSM.

 

I would greatly appreciate posts including publicly traded companies which fall under the above definition.

 

Link to comment
Share on other sites

They are a little high-tech but I like UBNT and IPGP.

 

DKS and WINA are options that are a little lower technology.

 

It's just my opinion but I'd avoid "family owned". I love companies ran by the founder and invest in them when I can. I think very often after the original owner operator leaves it detiorates if he leaves family in charge, If he doesn't leave the family in charge it's not an owner-operator any more.  Sometimes that's not the case but the son of the founder is too often an "August Busch IV". I'm honestly struggling to think of an heir that has took over a fantastic business that did half as well as his father. There are companies like DKS Dicks sporting goods where the heir took a sleepy 2 store chain and turned it into a huge company, but that's a case of the son truly building the company and exceeding his father’s record. Usually they are just average but I think heirs are more likely to underperform than outperform. I think you always have to wait a few years for them to prove themselves.

 

Link to comment
Share on other sites

Advant-E Corporation (ADVC)

Mestek (MCCK)

ELXSI Corp (ELXS)

Conrad Industries (CNRD) [Founding family still runs it; not sure if they have majority ownership]

Heritage-Crystal Clean (HCCI) [This is run by original founder but not majority owned by him]

Radiant Logistics (RLGT) [Also run by founder but not majority owned by him]

Link to comment
Share on other sites

  • 2 months later...

ELDO

 

I sound like a broken record but I haven't mentioned them in a while. It's pretty much what everyone looks for:

* small

* owner-operated

* well-run

* frugal

* efficient

* hidden assets (water rights and "investments")

* an internationally famous water source

* >10% growth

* theoretical operating leverage

* ridiculously high margins

* monopoly biz

* loyal following (probably around 9% of CO water market share by now - the single highest market share of any water bottler not named Aquafina, Dasani, or one of Nestle's brands IN ANY STATE)

 

Doug Larson has all the personal qualities required to be an all-star CEO.

Link to comment
Share on other sites

ELDO

 

I sound like a broken record but I haven't mentioned them in a while. It's pretty much what everyone looks for:

* small

* owner-operated

* well-run

* frugal

* efficient

* hidden assets (water rights and "investments")

* an internationally famous water source

* >10% growth

* theoretical operating leverage

* ridiculously high margins

* monopoly biz

* loyal following (probably around 9% of CO water market share by now - the single highest market share of any water bottler not named Aquafina, Dasani, or one of Nestle's brands IN ANY STATE)

 

Doug Larson has all the personal qualities required to be an all-star CEO.

 

Has the company made any public disclosures since going dark?  It doesn't appear that they're going to provide shareholders with quarterly reports.  Are they going to provide annual audited financials?  The 8-K announcing the decision to go dark is equivocal on that point.

Link to comment
Share on other sites

They have to provide annual reports if you are a shareholder [i'll be in CO on July 1st if they don't :)]. He never made any promise to provide one publicly. I have no idea if he actually will (I would guess no; they purposefully left it ambiguous so they could change their mind, in my view). Larson/ELDO have been extremely shareholder friendly (lots of interesting anecdotes). I don't think it will be hard to get one if you request one though (email/customer service is great). They are literally the only public water bottler that doesn't do re-packaged water delivery. They also happen to be a spring/artesian bottler (pure source). I don't think they wanted to publish their margins any longer.

 

With the going dark thing. Quarterly results were so lumpy that they weren't very helpful anyway. Liquidity probably hasn't changed a lick. If it's too small now then it was before too.

Link to comment
Share on other sites

 

With the going dark thing. Quarterly results were so lumpy that they weren't very helpful anyway. Liquidity probably hasn't changed a lick. If it's too small now then it was before too.

 

I don't mind not having quarterly reports, but I do think the lack of any public annual financials is a problem.  Without them, how are there going to be new buyers for your shares?  It seems like a recipe for chronic undervaluation and, ultimately, a takeunder.  I want to qualify all of this by acknowledging that I haven't seen any empirical analysis of this issue and would be interested if anyone has seen any analysis of, for example, P/E or EV/EBIT multiples for fully dark companies relative to similar public companies. 

Link to comment
Share on other sites

Two smaller Canadian companies:

 

LGT.A/LGT.B - Logistec Corporation (Controlled by the daughters of the founder)

LAS.A - Lassonde Industries (Controlled by the founder)

 

logistec has come down nicely. trades at 14x last years earnings.

 

Link to comment
Share on other sites

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 account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...