Outerwall (NASDAQ:OUTR)

CAPS Rating: 3 out of 5

A multi-national company offering a range of solutions for retailers' storefronts consisting of self-service coin counting; entertainment services such as skill-crane machines, bulk vending machines and kiddie rides and e-payment services.

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Player Avatar TMFValueMagnet (91.15) Submitted: 5/30/2013 12:48:28 AM : Outperform Start Price: $56.50 OUTR Score: +14.32

Given that this has exposure to tech, it isn't the kind of stock I would own in a real money portfolio.However, on CAPS, this is certainly a quality value play. CSTR generates substantial free cash flow (mostly from Redbox, which requires very, very minimal maintenance capex). This FCF can be plowed into share repurchases and dividends.A single-digit EV/EBITDA and EV/FCF valuation makes this a steal. The decline of the DVD is not good for the core Redbox business, however, it is more detrimental to Redbox's competitors. I see this one outperforming, potentially becoming an acquisition candidate for a private equity player once again.

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