Just to recap some positions we’ve liked and currently holding:
Updates (Great month for Aug 2019 for the following positions which proved to be winners)
FNKO (Position Entries 18–22); Last Price 24
Targets 26–30 in the short term (Trail stop and let it run). Valuation Less than 1X P/S at 22
Funko, Inc.has proven it’s more than just Fortnite. Funko makes pop culture consumer products, including vinyl figures, action toys, plush, apparel, housewares and accessories for consumers who have favorite pop culture brands and characters. This includes movie, television and book characters, and sports figures, including popular coaches.
1.) Funko reported its second quarter results and blew Consensus Estimate by 92%. The company reported earnings of $0.25 versus the Consensus of $0.13.
Sales jumped 38% to $191.2 million while gross profit rose 35% to $71.2 million. Sales were driven by strong demand across all of its geographic markets and product categories.
The top product in the quarter was Avengers Endgame which was 6% of all sales.
Gross margin, however, fell 90 basis points to 37.2% due to higher reserves on inventory, partially offset by improved product cost margins and lower license and royalty costs as a percentage of net sales.
2.) Company raised full year guidance
The company has moved 70% of production out of China but still has exposure to the latest tariffs. It believes it can raise prices to offset most of the pain, especially on its low cost products.
It now expects earnings per share to be in the range of $1.15 to $1.22 per share, which was above consensus.
3.) Valuation : Price/Sales of Less than 1
4.) Diversification through Makeup Lines (Ursula Makeup) , Boardgames (Rick and Morty Table Tops , Funkoverse)
https://www.teenvogue.com/story/funko-disney-villains-makeup-line
5.) Owns Evil corp Animation Studio to increase brand awareness
6.) 26th Annual Goldman Sachs Global Retail Conference
When: Wednesday, September 4, 2019
Where: Grand Hyatt Hotel, New York City
Format: Fireside chat, 1x1 meetings
8th Annual Gateway Conference
When: Thursday, September 5, 2019
Where: Four Seasons Hotel, San Francisco
Presentation Time: 11:00 a.m. Pacific time
Webcast: http://wsw.com/webcast/gateway/fnko/
Website: https://www.gatewayir.com/conference/
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reasons to own in my view:
recession proof, beneficiary of disney IP and many other IPs ranging from Nintendo, Netflix, DC Universe and so forth resulting to a highly rich content library and a lot of options to expand not merely from toys to boardgames to makeup lines to a lot of other things such as bags, clothing , shoes and so forth. Insulated from chinese tariff as 70% in Vietnam. All Across Ages.
Keep.
