Regis Corporation: A Stock Value Investors Should Relook by Mawunyo Adjei
Value investors are notable for their long-term approach towards undervalued stocks. Value investors try to avoid tech stocks but with tech stocks taking over almost every industry, value investors are turning their focus to stocks which have high barriers to entry. Regis Corporation (NYSE: RGS) is a hair salon chain with over 10,000 locations in globally. Regis Corporation (NYSE: RGS) has an advantage of being the largest hair salon chain in the world. The company has millions of loyal customers of its beauty products and hair salons. Most people have their favorite barbering shop or beauty parlors they go to.
When it comes to our haircuts and hairstyles, being victims of experiments are not acceptable by all. Even when robots takeover most human jobs in the future such that we can just sit at homes and style our own hair, we will still like to go to hair salons to hear the latest gossips or just to kill the boredom. The hair salon has experienced very little disruption by technology. Regis Corporation (NYSE: RGS) is a mid-cap stock which is very undervalued by the market. Over the centuries, chain stores have proven to be very profitable.
Retail chain, Wal-Mart, is still the top-earning company in America by revenue. Coffee chain, Starbucks and other restaurant chains like McDonald’s have proven to be very profitable in their industry especially in the long-run. Headquartered in Minneapolis, Minnesota in the United States, Regis Corporation (NYSE: RGS) recorded total revenue of $1.3billion in 2015. The company has over 50,000 stylists. The hair salon chain previously also deals in beauty products and previously owned beauty schools. Founded in 1922 by Paul and Florence Kunin, the company was initially called Kunin Beauty Salon but was rebranded as Regis when famous art collector and son of Paul and Florence Kunin; Myron Kunin acquired the chain in 1958. Regis Corporation has a market valuation of over $630m.
Daniel J Hanrahan has being President and CEO of the company since 2012. He was previously CEO of Celebrity Cruises, a brand owned by Royal Caribbean Cruises Ltd. The global hair care industry generated annual revenues of about $160 billion as at 2012, according to a research by Regis (NYSE:RCL). FirstResearch.com reported that “the US hair care services industry includes about 80,000 establishments with annual revenues of about $20billion.” Regis operates a franchise business called Regis Franchise, a division of Regis Corporation (NYSE: RGS).
Regis is a Fortune 1,000 company with great potentials, especially in the long-term. The company may never attain either a $500 billion market cap status or achieve a huge share price value like the Berkshire Hathaway but the company will definitely give Wall Street, a run for their money. It should not come as a surprise, if you ever see Regis Corporation (NYSE: RGS) in the Fortune 500 list in the coming years.
About the author
Mawunyo Adjei is the founder of GoodOldNews Inc. a business news media about stocks and startups.