What business would you buy if price didn't matter? (a thought challenge)

[jeffmori7]

Thanks PlanMaestro! I just never took the time to look! It just occurs to me that each time I shop over there, I am thinking it must be a good cash cow.

[Liberty]

The S&P Index business.  A royalty on the capital markets.

 

-Very hard to recreate a benchmark index.  S&P, DJI, MSCI have built their indices up over +50 years.

 

-Requires VERY little capital with no incremental capital needed to grow.

 

-Collects a fee based on AUM for ETF/MFs using S&P IP.  These products have been growing like weeds and will likely command a larger percentage of global invested capital in the future.  Even without inflows revenues will grow in line with capital markets ( +12% CAGR S&P 500 =  +12% CAGR S&P ETF royalty revenue).

 

-Collects per transaction fees for S&P derivative products (S&P E-minis, etc).  Equity derivative volume has increased by 17%/ year for the last 30 years and has become a major part of the capital markets.  Unlike equities that are fungible across exchanges, equity derivatives are proprietary and trade on a single exchange (monopoly w/ network effects).  If the S&P DJ merger is approved S&P will get a percentage of gross profit of ALL equity based derivatives traded at the CME.  All the benefits of being a part of the largest futures exchange without the clearing risk or capital investments (Think MA/V but without any capital investment).

 

-Collects monthly data fees for access to S&P index data.

 

Given the above I cannot see how the index business does not outperform the index  ;D

 

Well played, sir.  8)

[PlanMaestro]

It is a good business but not everyone can be extraordinary. Has anyone seen Aldi's numbers?

 

Thanks PlanMaestro! I just never took the time to look! It just occurs to me that each time I shop over there, I am thinking it must be a good cash cow.

[oddballstocks]

Off top of my head, PG, KMB, CL, CLX, Publix (private), In-N-Out Burger (private), CMG, SBUX, Subway, etc. Come to think of it, some of these are not THAT expensive.

 

Not sure why you thought Publix was private, they trade under the symbol PUSH and have a $12b market cap.  They file with the SEC as well.

 

I've been meaning to compare Publix to a few of the other grocery stores, I've always liked shopping at Publix.

[DCG]

Not sure why you thought Publix was private, they trade under the symbol PUSH and have a $12b market cap.  They file with the SEC as well.

 

Huh? PUSH as not a valid stock symbol. Publix is a private employee-owned company.

[A_Hamilton]

Not sure why you thought Publix was private, they trade under the symbol PUSH and have a $12b market cap.  They file with the SEC as well.

 

Huh? PUSH as not a valid stock symbol. Publix is a private company.

PUSH is technically a public company, as the number of employees who own it make it fit the technical definition of a public company. However, only active employees can hold shares, and the company sets the price at which people are allowed to either purchase shares or sell shares.

[oddballstocks]

Not sure why you thought Publix was private, they trade under the symbol PUSH and have a $12b market cap.  They file with the SEC as well.

 

Huh? PUSH as not a valid stock symbol. Publix is a private company.

PUSH is technically a public company, as the number of employees who own it make it fit the technical definition of a public company. However, only active employees can hold shares, and the company sets the price at which people are allowed to either purchase shares or sell shares.

 

From what I can see they have 152k shareholders, which I'd presume are employees?  In theory couldn't you contact an employee and buy their shares?  Unless the company has a right of first refusal (which they could very well) employees are free to sell shares in privately negotiated sales.

 

For some odd reason the symbol PUSH pulls up a quote for me at Fidelity.  Seeing the quote, the SEC filings, and details on otcmarkets.com I figured it was just an illiquid company.  Thanks for the clarifications on it.

 

Another oddity like this is Davey Tree service, they have over 300 shareholders so they report to the SEC, they have a really nice annual report as well.  Shares can only be obtained secondhand through privately negotiated purchases.

[A_Hamilton]

Not sure why you thought Publix was private, they trade under the symbol PUSH and have a $12b market cap.  They file with the SEC as well.

 

Huh? PUSH as not a valid stock symbol. Publix is a private company.

PUSH is technically a public company, as the number of employees who own it make it fit the technical definition of a public company. However, only active employees can hold shares, and the company sets the price at which people are allowed to either purchase shares or sell shares.

 

From what I can see they have 152k shareholders, which I'd presume are employees?  In theory couldn't you contact an employee and buy their shares?  Unless the company has a right of first refusal (which they could very well) employees are free to sell shares in privately negotiated sales.

 

For some odd reason the symbol PUSH pulls up a quote for me at Fidelity.  Seeing the quote, the SEC filings, and details on otcmarkets.com I figured it was just an illiquid company.  Thanks for the clarifications on it.

 

Another oddity like this is Davey Tree service, they have over 300 shareholders so they report to the SEC, they have a really nice annual report as well.  Shares can only be obtained secondhand through privately negotiated purchases.

 

pg 14 footnote 1 of the most recent Q "Common stock is made available for sale only to the Company’s current employees through the Company’s ESPP and to participants of the Company’s 401(k) Plan. In addition, common stock is made available under the ESOP. Common stock is also made available for sale to members of the Company’s Board of Directors through the Directors Plan. The Company currently repurchases common stock subject to certain terms and conditions. The ESPP, 401(k) Plan, ESOP and Directors Plan each contain provisions prohibiting any transfer for value without the owner first offering the common stock to the Company."

 

[oddballstocks]

Not sure why you thought Publix was private, they trade under the symbol PUSH and have a $12b market cap.  They file with the SEC as well.

 

Huh? PUSH as not a valid stock symbol. Publix is a private company.

PUSH is technically a public company, as the number of employees who own it make it fit the technical definition of a public company. However, only active employees can hold shares, and the company sets the price at which people are allowed to either purchase shares or sell shares.

 

From what I can see they have 152k shareholders, which I'd presume are employees?  In theory couldn't you contact an employee and buy their shares?  Unless the company has a right of first refusal (which they could very well) employees are free to sell shares in privately negotiated sales.

 

For some odd reason the symbol PUSH pulls up a quote for me at Fidelity.  Seeing the quote, the SEC filings, and details on otcmarkets.com I figured it was just an illiquid company.  Thanks for the clarifications on it.

 

Another oddity like this is Davey Tree service, they have over 300 shareholders so they report to the SEC, they have a really nice annual report as well.  Shares can only be obtained secondhand through privately negotiated purchases.

 

pg 14 footnote 1 of the most recent Q "Common stock is made available for sale only to the Company’s current employees through the Company’s ESPP and to participants of the Company’s 401(k) Plan. In addition, common stock is made available under the ESOP. Common stock is also made available for sale to members of the Company’s Board of Directors through the Directors Plan. The Company currently repurchases common stock subject to certain terms and conditions. The ESPP, 401(k) Plan, ESOP and Directors Plan each contain provisions prohibiting any transfer for value without the owner first offering the common stock to the Company."

 

A_Hamilton, thanks, forgot about ESOP and ESPP...that would surely restrict it to only employees.  It's a shame, the company seems very well managed, and pretty conservative in their financing.  I'd love to be able to own a piece of it, not possible, at least for now..

[motownsf]

Whomever said IKEA, I agree with that...

[oddballstocks]

Ikea would be great. I went surfing around to see who owned Ikea and how. Mainly out of curiosity but also thinking maybe one day the founder will pass the company on and maybe the kids would sell it.

 

I ended up finding this really fascinating article in the Economist that discusses the Ikea holding structure. Safe to say it sounds like it is nearly impossible that Ikea would go public or even be sold.

 

http://www.economist.com/node/6919139/print?story_id=6919139