Glenn Surowiec presented his in-depth investment thesis on Fairway Group (FWM) at Best Ideas 2015.
Fairway Group is one of the more compelling investments I’ve come across over the last 5 years. The 15 store grocer has tremendous brand equity, industry leading sales productivity metrics, and a hybrid product offering that includes the best of natural/organic and traditional supermarkets. Industry veteran Jack Murphy was hired as CEO last September, and his initial focus will be on improving same store sales and shrink management, as well as strengthening price optimization and supply chain management. What excites me about Fairway is their ability to create value today, and well into the future through a combination of margin improvement, same-store and new store growth. At a recent quote of $3.50/share, the market’s expectations for Fairway are quite low. Using conservative assumptions re growth, margins and valuation, Fairway could easily be worth 5-7x today’s price, in 3-5 years. There’s tremendous value in thinking about this model, and how it potentially evolves, through a long-term lens. Fairway is a classic investment example of where preparation intersects with patience.
About the instructor:
Glenn started GDS Investments in 2012. From 2001 to 2012, he worked for Alsin Capital Management, Inc. as an equity research analyst (2001-2003), co-portfolio manager (2003-2008), and portfolio manager (2008-2012). Glenn has a BA in Management (Accounting concentration) from Gettysburg College and an MBA (Finance concentration) from Southern Methodist University. His interests include running, cycling, golfing and youth coaching.
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