Ryan Fusaro's Presentation on Jack in the Box: Value Investing Contest Winner ~ market folly

Tuesday, October 2, 2012

Ryan Fusaro's Presentation on Jack in the Box: Value Investing Contest Winner

Continuing coverage, we're posting up notes from the Value Investing Congress.  Below are notes and the presentation of Ryan Fusaro, who won the VIC contest and a spot to present his idea.  He presented a long of Jack in the Box (JACK).

The Value Investing Challenge Contest gave investors an opportunity compete with their ideas.  There were three finalists:

- Matthew Kirk (Lonestar Capital Management): Long Cincinnati Bell (CBB)
- Steven Wood (GreenWood Investors): Long Fiat (F.MI)
- Ryan Fusaro (Lioneye Capital Management): Long Jack in the Box (JACK)

Long Jack in the Box (JACK)

Fusaro won and pitched Jack in the Box (JACK) in his talk entitled 'Thinking Outside the Box."  He started with some history that JACK has refranchised from 25% in 2005 to 75% today.

- Incomplete financial reporting
- Potential margin improvement
- Great brands
- Cost structure hasn't caught up with franchise model

He touched on how JACK owns Jack in the Box but also owns Qdoba, which has typically been too small to really matter but is now worth $580m by itself and value could be unlocked with a spin-off.  Think McDonald's (MCD) when it spun-off Chipotle (CMG).  JACK also owns real estate.

Fusaro says there's a growth business embedded in a value business and also touched on unlocking real estate value.

Embedded below is Fusaro's slideshow presentation from the Value Investing Congress: 

Check out the rest of the hedge fund presentations from the Value Investing Congress.

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