Midas, Inc. (MDS)
The Company provides retail automotive services principally through franchised or licensed shops in the U.S., Canada, Europe and other countries.
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Dead Business Plan
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Fix up them clunkers...consumers will learn to live closer to their means I think.
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I have always gone to Midas for auto repairs. In the past, I always remember seeing people bringing in their car, find out what the problem is, and then try and decide between having the repairs done or buying a new car. In the last couple years I have not seen this. I think people are realizing that it is just not financially responsible to buy a brand new car every few years if there is a problem. Midas should benefit with more business. This is a Buy.
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What happens when people can't buy new cars? They bring the old one in for repairs.
Ask any mechanic you meet and they will tell you business has never been better.
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Nice margins, but sales growth is a paltry 1.8%. Walmart and PepBoys are providing some tough competition, so Midas is going to have to spend some money to grow sales, which, in turn, will reduce those nice margins...
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Even through recession one thing people will always scrape to find money to pay for is car repair.
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I think their back on the rise atleast for a couple more weeks.
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high debt inconsistent profit margin
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i work for midas and they have a problem explaining in detail what is there goal.
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Midas is not a widely understood company by the average investor. I'm a franchisee, and I have more insight than most. Midas Auto Service Experts is what we knew as Midas Muffler from 1956 to 1997. When it went public on the NY, it flew , then faultered. The CEO was a disaster: But when Alan Feldman ( Ex McDonald's President) took over in 02 lots of things changed. The company unloaded all of it's high capitilized baggage such as manufacturing, and is now postured to focus on the consumer again. the ratio of service bays to vehicles is down up to 242 vehicles for every service bay in America from 190 vehicles per bay in 1997 . Midas has two stronf alliance partners in AutoZone , and Firestone Brigestone . Midas has NO alliance with Cooper tires as I have read here in the past. 13% of stock is held by insiders, and the PE ratio is now 37 . In 03 it had no earnings. Keeley Sm. Cap Value fund owns 5.7 % as of Dec 06. Since 2005 Midas has gone from a <600M > Cash Flow to a + 100M . Net income went from $600.000.00 to $2.4M in 24 months- That's not impressive until you learn that it was flirting with Chapter 11 in early 02 , when the board made significant changes. 52 week range is 16-24. I predict a 16%-20% growth for the next five years.
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Poor Business Model, Slow to No Growth, High SG

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