Booth-Laird Bullish Case For Outerwall Inc (OUTR)

Booth-Laird Bullish Case For Outerwall Inc (OUTR)

Booth-Laird presentation on Outerwall on OUTR, posted with permission (PDF format here – Booth-Laird-Investment-Partnership-Outerwall-long-thesis)

At our 2014 Annual Meeting held on July 21, 2014, we presented our long thesis on Outerwall (OUTR), a beaten down, highly shorted stock that is misunderstood by the market and, in our opinion, presents substantial upside potential with limited downside.


Valuewalk’s January 2021 Hedge Fund Update: First Issue Now Published!

valuewalk Q4 2020 hedge fund letters to investorsWelcome to our inaugural issue of ValueWalk's hedge fund update. Below subscribers can find an excerpt in text and the full issue in PDF format. Please send us your feedback! Featuring Bill Ackman's comeback, a look at Alta Fox Capital, Prentice Capital having a strong year, Canyon Partners profiting on Covid crisis refinancings, and Odey's Read More




  • Outerwall (ticker symbol: OUTR) is U.S. leader in automated retail


  • Self-service, stand-alone kiosks in heavily trafficked locations


  • Founded in 1989 as Coinstar


  • Changed name to Outerwall in 2013


  • $1.1B market cap


  • Over 100 patents
  • Brands


Flagship Brands – cash cows


Developmental Concepts – growth stage


Coinstar Exchange

Redbox Instant by Verizon

Available at very low multiples

• Stock selling <7 times 2013 free cash flow & for <6 times expected 2014 free cash flow

• Despite the fact that free cash flow is still growing

• Capital expenditures to decline substantially over next few years

• Highly variable cost structure

• Available at less than 50% of revenue despite high

• Revenue still growing

• Margins expected to grow even faster


• Maximum negativity from market due to Redbox
Face of the company

Seen as another Blockbuster-in-waiting

• Very high short interest

44% of float shorted – 10 days to cover

• Shifting investor base from growth to value-oriented

• Market cap down 37% YTD

Down 25.5% in last 2 months solely on negative analyst reports

• Work-out investment

Expect company to beat lowered market expectations, overcome market’s fear, & likely cause short squeeze
Automated Retail

• Self-service, stand-alone kiosks in heavily trafficked areas

• Strong role in future of retail

• Allows convenience for fulfilling immediate need at lower costs than traditional brick-and-mortar retail, even lower cost than e-commerce

• Limited overhead
No large rent expense (take up 12 square feet of space)

1 part-time employee can service multiple kiosks

Outerwall Rules Automated Retail

• No competitor can come close to matching Outerwall

• Outerwall has prime real estate no competitor can get
Ex. just about every Wal-Mart has a Redbox and Coinstar

It does not make sense to have a second kiosk from competitor in same location offering same service ?Lends itself to natural monopoly within a store

• Long-term relationships with major retailers throughout the country creates high barrier to entry for competitors

Wal-Mart, Walgreens, Kroger, Target, malls, gas stations

Retailer receives percentage of revenue

Drives foot traffic to store

Automated retailer of choice for any new concept

Full presentation here – Booth-Laird-Investment-Partnership-Outerwall-long-thesis

No posts to display