Travis Cocke presented his in-depth investment thesis on PAR Technology (NYSE: PAR) at Best Ideas 2017.
PAR Technology, established in 1968, has two core businesses: a sleepy, consistent, low-margin government services business (PAR Government), and a technology business serving restaurants (PAR Technology or “Hospitality”). The technology segment has a best of breed, cloud-based (SaaS) point-of-sale system (Brink) and an industry leading POS terminal hardware business. About twelve months from now, Travis believes PAR will more closely resemble a leading restaurant POS pure play, as Travis believes PAR will initiate the process of divesting their unrelated government services business in H2 2017. This divestiture will result in a highly profitable, cash-rich leader in quick service/fast food restaurant POS software for an implied multiple of just 0.3x trailing sales. If PAR simply gets their POS business to 1x sales, 3x gross profit, and 10x EBITDA (multiples still well below both trading and transaction comps), there is 120% upside from recent levels in Travis’s base case, creating a highly asymmetric bet to the upside.
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About the instructor:
Travis Cocke is the Portfolio Manager of the Voss Value Fund, LP. Prior to founding Voss Capital LLC in 2011, he was a Portfolio Manager at Farney Management Corp., a family office in Georgetown, Texas, and Analyst at Ascendant Advisors LLC, in Houston, Texas. Mr. Cocke joined Ascendant as a generalist research analyst. Mr. Cocke received a BBA in Finance from Texas A&M University. Mr. Cocke was awarded third place in the inaugural SumZero investment idea contest in summer of 2013, first place in the 2015 FactSet Best Large Cap Idea contest, and “Judges’ Top Pick” for the best investment idea for the Pitch Perfect contest at the 2014 Texas Hedge Fund Conference.’