[This thesis is a reconstruction of what I was thinking at the time.]
Date: Aug. 26, 2024
The company is run and controlled by H.P.J.L. who is also the chairman of Johnson Financial Group and a director
of S.C. Johnson.
She has shrewdly run JOUT without any debt and with an extremely high cash balance ($148M as of the most recent
10-Q).
This is against a $384M market cap, implying EV of $236M.
In my view, any time you see a company with a high cash balance and no debt, you get a worry-free ride on the
business cycle:
This is not at all the case with heavily-levered companies where you need to worry about higher upcoming
interest expense when IRs have moved higher.
No need to panic if there's a downturn in the recreation sector. Profits and cashflow may sag, but
you cannot go bankrupt with no debt.
As a result, you can own the stock forever, at least in theory. As "forever" comes to pass, you may get
opportunities to sell out at a profit if you find better ideas elsewhere.
The key point is that because of the high cash balance and no debt, you don't need to think very hard.