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Progressive Leasing: A Juggernaut Hiding in Plain Sight

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  Progressive Leasing: A juggernaut hiding in plain sight Aaron’s holding company is masking the extremely cash-generative, third-party leasing business Progressive has strong margins with operational leverage and generates significantly more cash from operations than earnings Clear catalyst in sight - spinoff will unlock significant upside and multibagger potential depending on valuation of legacy brick-and-mortar business Operational leverage cuts both ways and growth limited by capital in business (financial business)  Aaron’s is planning a spin-off of its third-party leasing business, Progressive Leasing, which has surpassed the traditional brick-and-mortar business in growth and quality. Aaron’s retail footprint classically relies  on locations to lure customers and transact by providing “rent-to-own” options to households with poor or no credit. Progressive Leasing scales the economics of rent-to-own across third-party...
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Root Insurance (ROOT): A Worse Mousetrap

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Root: A Worse Mousetrap ·          Root is new Insurance technology company with quick growth and worrying fundamentals ·          Pricing model based solely on telematics will lose in low-end, highly competitive Property and Casualty market ·          Probable long-term premium price increases based on poor risk pool pricing and customer churn lead to poor operating results ·          Insider lock up expiration for ¾ outstanding shares will be race to “cash-in” at wild valuation – avoid, or better, front run insiders to exit by selling short Root insurance was founded by Alex Timm and Dan Manges, and received significant VC investment interests due to its rapid premium growth and insatiable thirst for capital. As with many companies in hyper-growth mode, Root needed capital to gain scale and ultimately become profitabl...
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(ELAN) Possible Profits from Animal Health Spinoff

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Eli Lilly's (LLY) IPO and eventual spin-off of its animal health care division, Elanco (ELAN), could be an interesting deal for special situation investors. Industry & Company: Zoetis (ZTS)  management believes the animal health industry will continue its robust growth from the last five years as it grew from $26 Billion to $32 Billion at the end of last year, and will add another $9 Billion over the next 5 years. This equates to a GDP beating 5% annual growth rate. Even as threats of economic struggles approach the general economy – this industry, which splits revenues between meat production and pet health, should see its sales fairly resilient since families will likely continue eating meat, and buying medicine for their pets. Elanco is a wholly-owned subsidiary of LLY. LLY is projecting ELAN to produce approximately $3B in revenue for 2018. This projection is in-line with previous years’ sales. ELAN has shown decent revenue growth, mostly through acquisition, as...
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