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Thesis Summary

The document recommends buying five stocks: AAC Holdings, Energy Focus, The Ensign Group, U.S. Ecology. For each stock, it provides the current price, a one sentence thesis for why it is a buy, and a target price with the estimated upside potential. The theses cite factors like market share opportunities, growing industries, continuous acquisitions and growth, and regulatory stability driving long-term growth.

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115 views2 pages

Thesis Summary

The document recommends buying five stocks: AAC Holdings, Energy Focus, The Ensign Group, U.S. Ecology. For each stock, it provides the current price, a one sentence thesis for why it is a buy, and a target price with the estimated upside potential. The theses cite factors like market share opportunities, growing industries, continuous acquisitions and growth, and regulatory stability driving long-term growth.

Uploaded by

api-278033882
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Stock

AAC Holdings,
Inc. (AAC)

Buy /
Short
BUY

Energy Focus,
Inc. (EFOI)

BUY

The Ensign
Group, Inc.
(ENSG)

BUY

Thesis

Current
Price
$ 22.50

AAC Holdings is a BUY as it is positioned to gain market


share in a $35B industry that is currently highly fragmented.
As the only publicly traded company, they are positioned the
raise capitals that privately traded companies are unable to
do. This access to new capital has allowed them to have
tremendous growth in the past twelve months since they
released their IPO last fall. This growth is then fueled by the
macroeconomics due to political change being needed. The
high amount of incarceration makes the need for alternatives.
The stock has recently seen a loss due a pending lawsuit the
company has. The huge dip in stock price the company saw
means an entry for new investors. Despite the potential
distractions from this lawsuit, the company has still beat
expectations in revenues and EPS and has the source of
capital needed to continue their growth through pipeline
beds in their inpatient facility and through acquisitions and
startups. The target price of $30.80 will give the company an
upside potential of 37%.
Energy Focus, Inc. engages in the designing, development,
$
manufacturing, marketing and installation of energy-efficient
lighting systems and solutions. The lighting industry
continues to grow, and has a strong outlook for years to
come. With the popularity of LED lighting growing at the
rate it is, combined
with the companys relationship building with big name
customers, Energy
Focus will continue to create value and increase the price of
their stock.
The Ensign Group Inc., has been showing continuous
$
growth since it went public in 2007. The company is actively
acquiring operating subsidiaries each quarters. The business
is showing that it is creating shareholders value by raising its
dividends continuously since its IPO, with a dividend growth
rate of 8.45%. Operating subsidiaries are proven to be
leaders in each of the area in which they are present.
Executive management is committed to empower its local
leadersand workforce by providing training but also by
incentivizing them with bonuses. The Ensign Groups
workforce is a catalyst for organic growth. The growing
elderly population characterized by the aging of the baby
boomers will support the Ensign Group revenue growth in
the future. The latest ROIC/WACC ratio was 1.81x which
again shows that Ensign is creating value. A buy of The
Ensign Group, Inc. is therefore recommended with a oneyear target price of $54.26. Currently trading at $46.46, it has
an upside potential of 17.46%.

Target
Price
$ 30.80

14.10

25.80

46.46

54.26

U.S. Ecology,
Inc. (ECOL)

BUY

U.S. Ecology, Inc. (ECOL) looks to create the premier


North American provider of environmental services, and
the recent acquisition illustrates managements
commitment to attaining the long term goal. In order to
create value on their journey to the top, they are looking to
streamline their operations by shedding non-core businesses.
Already they have begun to show that are pushing for more
geographic diversification within the United States with
locations scattered on the map. Operating within a highly
regulated industry provides revenue that generates a level of
certainty of continued operations without much volatility; it
is therefore a recommended buy; focusing on long term
growth over the possibility of short term gains.

46.09

44.73

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