Fat Pitch Financials is announcing a contest today. The contest involves finding the best wide moat company amongst companies with market values of less than $1 billion. These little fortresses can provide great investment opportunities to small investors. The winners of this contest get a month of access to Fat Pitch Financials’ Contributor’s Corner.
Put your investing skills to work! Tell us why the company you selected has a wide moat and is currently selling at a cheap price. Provide a few sentences (or more) describing the competitive advantages of the small company you selected. You probably want to discuss:
- What kind of moat(s) does this small company have? Strong brand like Coca Cola, network effect like Ebay, high switching costs like ADP, toll bridge like a pipeline company, etc.
- Does this company have pricing power? Discuss profit margins and revenue growth rates over the past few year.
- Who are the major competitors to this company? How will the selected company keep these competitors at bay and be able to sustain its competitive advantage?
- What is your estimate of the intrinsic value of this company and how much of a discount is its stock currently selling for? (optional) Discuss free cash flows, owner’s earnings, estimated growth rates, debt, etc…
Submit your entries using the contact form by December 31, 2005. Be sure you use a valid email address so I can contact you if you win. Feel free to submit early and often (kind of like voting). The first submission for a particular company gets credit for that idea.
I will post submissions daily. I encourage you to be part of the judging process by commenting on the merits of each entry. I will award prizes for both the small company with the widest moat and the stock of a small company with a wide moat that is selling at the best value. Winners will receive a month of access to Fat Pitch Financials’ Contributor’s Corner with its exclusive current going private transactions list.