Four Corners, Inc. (FCNE) sells supplies for the charity bingo market in Texas. FCNE is a small company with a market cap of just over $20m. Bingo is not a particularly exciting industry, but it’s also not volatile or overly competitive. Proof of these facts can be found at the top of FCNE’s income statements. In the last five years, revenues have only grown at a compounded rate of 5%. However, management has done a superb job of reducing costs and managing cash flows. Over the same 5 year period earnings and free cash flow have grown at annualized rates of 28% & 14% respectively. As one can imagine, Charity Bingo is a low capital intensity industry. As a result, FCNE generates copious amounts of free cash flow year after year. Given the nature of the industry, FCNE is a very high-margin business. Gross margins are consistently above 45%, and operating margins have stayed above 40%.
Four Corners, Inc. (FCNE): Tremendous Value!
Four Corners, Inc. (FCNE): Tremendous Value!
Four Corners, Inc. (FCNE): Tremendous Value!
Four Corners, Inc. (FCNE) sells supplies for the charity bingo market in Texas. FCNE is a small company with a market cap of just over $20m. Bingo is not a particularly exciting industry, but it’s also not volatile or overly competitive. Proof of these facts can be found at the top of FCNE’s income statements. In the last five years, revenues have only grown at a compounded rate of 5%. However, management has done a superb job of reducing costs and managing cash flows. Over the same 5 year period earnings and free cash flow have grown at annualized rates of 28% & 14% respectively. As one can imagine, Charity Bingo is a low capital intensity industry. As a result, FCNE generates copious amounts of free cash flow year after year. Given the nature of the industry, FCNE is a very high-margin business. Gross margins are consistently above 45%, and operating margins have stayed above 40%.